Global Tourism Vehicle Rental Market - Growth, Trends and Forecast (2018 - 2023)
The tourism vehicle rental market is expected to grow at a CAGR close 12.08% during the forecasted period of 2018-2023. Vehicle rental services are relatively developed in the industrialized economies and have been around for a long time. More importantly, the general public is comfortable with the concept and as a result of proper procedures and insurance, there is little risk for the vehicle rental vendor. Previously, in the emerging economies, there existed several regulations and high-security deposits needed to be given by the customer to take a vehicle on rent. The market was also highly unorganized and unregulated. Tourists who have little idea about the local conditions need clarity and uniform rules that were not present earlier and were impeding the growth of the market. In the new decade, however, this sector, as a result of the entry of global brands into the emerging economies, has boomed. The entry of established players in the market has resulted in strong growth, as tourists are familiar with these global brands and are, therefore, more willing to choose this option.
With a total vehicle fleet size more than 2 million, United States is the leader in the tourism vehicle rental market, but the market is saturated and will post modest gains. The major growth is expected to come from Asia-Pacific countries like Vietnam, Philippines, India, and China where tourism is expected to grow sharply. Organized vehicle rental services are still in their nascent stage in the emerging economies and offer significant opportunities for growth. As per Statista's data, Zambia, in Africa, was the third fastest emerging tourism destination with an annual growth rate of 7.3 percent in travel and tourism's direct contribution to GDP projected for 2014 to 2024. The tourism sector in Iran is expected to boom, following the lifting of sanctions. Iran has a rich cultural heritage and important monuments, and tourist destinations and the number of foreign tourists are expected to rise exponentially. The local vehicle rental market is underdeveloped and offers players tremendous opportunities.
The rental market for luxury vehicles will grow at the fastest pace during the forecast period due to increased travel budgets of tourists around the world. Also, tourists from developed nations and emerging markets who are increasingly exploring new destinations prefer to rent luxury and high-end cars and this will boost the market for these cars. In the US alone more than 2.10 million vehicles are engaged in the car rental market.
As a whole, the tourism vehicle rental market is forecasted to show higher demand from foreign tourists as they have a larger budget and are willing to spend more per person. The market has been segmented by vehicle type (Budget, Mid-Size, Luxury), end-users (self-driven, rental agencies), booking mode (Offline, Online) and geography (North America, South America, Europe, Africa, Middle East and Asia-Pacific). With increasing, environmental pollution vehicle rental players are considering electric vehicles are an ideal solution for the tourist industry. They are anticipated to play an important role in minimizing the greenhouse emissions by a significant percentage provided all the rental vehicles are converted to electrical vehicles. The already existing electrical vehicles for tourists can be fully utilized by them by increasing the awareness about their presence.
Key Developments in Market: