The
World Travel and Tourism Council reported that in 2018, a growth of 3.9% was
witnessed by the global travel and tourism industry. It created more than 319
million jobs worldwide and amassed $8.8 trillion in 2018. This massive growth
in the industry also boosted the growth of other related industries, such as
car rental. Nowadays, tourists prefer renting cars to explore a new place as it
gives them the flexibility of planning their own itinerary without the fear of
relying on public transport system. Car rental services allow customers to
travel to their choice of places as per their convenience. Further, the rising
disposable income has also established the trend of more people taking short
trips. Rather than taking their own vehicle, customers prefer renting cars;
airport rentals are the most common as tourists rent a car immediately after
landing in a new country and keep the car with them for the whole duration of
their stay or drop them off at convenient drop-off points.
Witnessing
a 7.9% CAGR, the car rental market is expected to generate a revenue of
$122.6 billion in the coming years. Car rental services are offered via three
different vehicle types: luxury,
executive, and economy. During 2014–2018, the economy vehicle type was used the
most for car rental services. These cars are inexpensive and are smaller in
size and have a seating capacity of four to five persons. Being smaller in
size, these cars have a high fuel efficiency, which makes them a suitable
option for rental services. Further, amidst growing environmental concerns,
these cars are witnessing a high demand as their impact on the environment is
not as severe as other cars. In the coming years, the luxury cars are predicted
to register a faster growth in demand, as the global disposable income is
improving. These cars offer superior performance, comfort, and have better
configuration.
One
of the key trends in the car rental market is the deployment of electric
vehicles for rental purposes. In wake of rising concerns about vehicular emission,
governments of many countries are bringing in stringent regulatory policies to
cut down on such emissions. From offering subsidies and incentives to creating
awareness about the harmful effects of conventional energy sources on the
environment, governments and various organizations are working toward
popularizing the use of electric vehicles. In Europe and the U.S., one of the
rental companies, Sixt SE offers fully electric cars in the luxury segment,
such as BMW i8, BMW i3, tesla Model X, and Tesla Model S. In India, in 2018,
Zoomcar India Pvt Ltd. entered into a partnership with Mahindra & Mahindra
Ltd for the deployment of electric cars for rental purposes.
The
popularity of the internet has resulted in the development of the online or
digital car rental system, which is helping the car rental sector become more
organized. Online car rental allows the consumers to shortlist the car of
choice, and make bookings well in advance without the hassle of visiting the
office. Further, majority of the companies have their own applications, which
can be used by consumers to avail any assistance that they may need throughout
the rental period. Therefore, the digitization of the car rental process has made
it much safer, transparent, and cost-effective, which has been instrumental in
making these services popular.
