Revenue Share of Car Rental Market During 2020–2024
The travel and tourism industry across the globe has been registering significant growth over the past few years. As per the World Travel and Tourism Council, the global travel & tourism industry registered a growth of 3.9% in 2018, as compared to the previous years. Since the disposable income of people has been increasing in both developed and developing countries, they are becoming more inclined towards spending on leisure activities such as travelling. Transportation is an important part of the travel & tourism industry, which is why several hotels provide scooter and car rental services so that the guests can indulge in sightseeing activities with ease.
Attributed to this, the demand for car rental services is rising swiftly. According to a P&S Intelligence report, the global car rental market is predicted to generate a revenue of $122.6 billion by 2024, rising from $78.7 billion in 2018, advancing at a 7.9% CAGR during the forecast period (2019–2024). Car rental services are offered via luxury, economy, and executive vehicles, among which, the demand for economy vehicles was the highest in the past. This is because of the high fuel efficiency of these cars, which increases their adoption by fleet operators for providing car rental services.
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Other than this, the demand for luxury cars is also projected to grow substantially in the years to come, which is owing to the rising utilization of these vehicles for business trips by corporates and significant economic development. Car rental services can be availed online or offline, between which, the adoption of online booking channels has been higher up till now. This can be ascribed to the growing penetration of internet of things and increasing utilization of smart phones. Online platforms provide the user with easy access to services, since they can book the car as per their preference, whenever needed, via the company’s mobile app or website.
Car rental services are being utilized for both personal and business purposes, between which, the demand for these services was higher for personal activities. As the spending power of people is increasing, they are travelling to shorter trips frequently for leisure purposes. For travelling, people prefer to make use of car rental services rather than worry about driving their own cars. Car rental services are utilized for outstation, local, and airport travelling purposes. The requirement for these services was the highest for travelling to airports in the past.
This is because of the growing adoption of airport car rental services by business professionals, rising growth of international and domestic tourism, increasing air travel, and surging disposable income of people. When geography is taken into consideration, North America was the largest car rental market in the past, which is on account of the various initiatives that are being taken by service operators, presence of major companies, and growing utilization of these services in a number of cities in the region.
In conclusion, the demand for car rental services is growing due to the swiftly growing travel and tourism industry around the world.