Jasmine Birtles
Your money-making expert. Financial journalist, TV and radio personality.
CAR RENTAL MARKET OUTLOOK FOR 2023
Reading Time: 4 minutesMany scientists, writers, philosophers, and thinkers imagine what our world will look like in the future. Like science fiction writers, futurologists predict how modern technologies and trends will influence inventions and cultural heritage, which will lead to the formation of a new normal. We do this in order to give businesses an understanding of trends and how to anticipate and use it to stay in the market. Let’s take a look at what renting a car might look like in the coming year.
- Market Situation
- An example of a successful car rental business
- First rental car
- Prerequisites for the spread of car rentals
- Car rental trends in the near future
Market situation
There are two market groups for different car types: economy and luxury. The market is separated into offline and online options depending on the mode of reservation. Airport rentals and off-airport rentals are two examples of market segments by mode of transportation. Large car rental companies maintain their own fleets practically anywhere there are huge cities. The number of international travellers and the number of tourists who prefer to rent cars locally decide the size of the parking lot for each player.
An example of a successful car rental business
When speaking of the “geography” of the vehicle rental industry, we’d like to focus on one of the best instances of the application and utility of the automobile rental service in Dubai, a renowned Middle Eastern city. Here, the attractiveness of rental cars is seen among residents of Dubai as well as permanent international residents as well as tourists.
One of the car rental service in the UAE, Renty, specializes in renting out luxury vehicles along with regular cars, vans, and business cars. Both casual visitors and business travellers seeking to rent fully inspected luxury vehicles to be used in Dubai and the United Arab Emirates can turn to Renty. In order to experience the opulent lifestyle in Dubai, many tourists rent vehicles. However, Renty offers a large selection of SUVs and affordable cars that are ideal for exploring Dubai, in addition to supercars like Ferraris and Lamborghinis.
Customers can choose from a wide variety of items at Renty and receive good value in the market. Each vehicle on Renty has undergone extensive testing and is of the highest calibre. The platform offers customers a quick and easy car rental process, and there are strong quality control regulations in place.
First rental car
There are many versions of how this service originated. One of the most popular versions says that it all began at the beginning of the 20th century in America. Then one fine day, the owner of the workshop, Joe Sanders, answered the request of a passer-by to borrow his Ford Model T. A man was late for a date with a girl and he urgently needed a car. After that, the future entrepreneur screwed the odometer to his car and put up a price tag of 10 cents per 1 mile. In the summer of 1916, an advertisement appeared in the local newspaper, in which the new Sanders System company offered cars for rent. People became interested in business, and it instantly became popular. Ten years later, Sanders’ rental points were operating in more than 50 cities across the country.
Prerequisites for the spread of car rentals
The market for tourist car rentals is anticipated to develop during the projected period since tourism is a sizable sector and the post-pandemic rehabilitation process has started to restore economic activity. Renting a car is often preferred over using any other mode of transportation by people who want to adhere to social distance and cleanliness standards. Comfort and life quality spontaneity, accessibility, and low travel expenses are further driving forces in the market for rental vehicles for travel. Renting a car is a great way out, firstly, to avoid unnecessary hassle. Secondly, a great opportunity to try out any car that you have always wanted to have and choose the one that suits you.
An increasing number of city dwellers are moving away from owning a personal car in favour of short-term rentals that pay monthly, weekly, hourly, or minute-by-minute. The car rental service became popular thanks to generation Y (18-34 years old), many of whose representatives, according to polls, do not consider owning a car a sign of success. People do not want to invest in the purchase of a single car, they choose a variety and regularly rent different cars. Instead, they rent a car or use taxi service mobile apps.
The popularity of short-term rentals in large cities will grow, but this will not lead to a decrease in car sales: they will wear out faster and be updated more often. Thus, the rental car market will continue to grow, especially in countries where active tourism and the economic environment contribute to this.
Car rental trends in the near future
The key elements influencing the expansion of internet booking are affordability, convenience, and the quest for an authentic travel experience. More and more startups and independent travel agencies limit their service offerings to apps and websites. As a result, customers prefer online booking over traditional booking. The expansion of the online booking option is being driven by the aforementioned considerations.
The largest region is anticipated to remain in North America, mostly as a result of rising rental car usage and an increase in business travel. Due to its rapid urbanization and rising domestic travel expenditures, the Asia-Pacific region is anticipated to rise at the highest rate during the projected period.
Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.
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