Market Trends of GCC Car Rental Industry
Online Booking Segment is Expected to Grow Significantly
The car rental market's growth is favorable due to stringent government legislation on purchase and car driving in the country. Using public transportation can become time-consuming and unpredictable. Also, cities like Cairo and Riyadh require long distances to see places for sightseeing. Moreover, public transport doesn't give an end-to-end ride, which is especially unfavorable among tourists.
The online booking segment of the market is expected to grow at a significant pace during the forecast period. Approximately 57% of the bookings were made through the online booking channel which is further expected to increase significantly to 64% by 2026, in the region. The increase in the reservation can be attributed to the high tourist influx into the countries like United Arab Emirates, Saudi Arabia, etc.,
Furthermore, the trend of online renting a car through apps has improved over the period. App developers have been designing mobile rental applications with more advanced booking features that offer more vehicle availability and comparable rental costs on a single platform. For instance, in August 2020, Ejaro introduced a licensed car sharing application in Saudi Arabia. The application connects car owners with people looking to rent vehicles. Startup only takes 20% of each transaction, and the rest goes to the vehicle owner. In January 2021, the startup raised around USD 850,000 in seed funding from angel investors and BIM Ventures.
UAE is the Largest Market
The UAE car rental industry is primarily highly influenced by both the tourists and office corporates. With the growing popularity of a Technology-based platform and adopting new customer-oriented services, the government is providing initiatives to push the market. In the UAE, the Airports are well outside the city, proving car rental services a profitable business in Dubai and Abu Dhabi.
Especially Dubai is the major attraction in the GCC region. In Dubai, Burj Khalifa, Burj Al Arab, The Dubai Mall, Palm Jumeirah, and Dubai Creek are prevalent tourist gathering places throughout the year. In 2020, Dubai witnessed a total of 5.51 million visitors with total international visitors from Jan 2021 to May 2021 accounted for 2.06 Million visitors.
With the growing economy in the UAE and readily available car rentals on demand, car rentals have become even more accessible and sustainable. The rise in population, especially in larger cities, is leading to the unavailability of space, and the rising prices of fuel and taxes have all resulted in people drawn towards sustainability. Environmentally friendly vehicles like electric vehicles (EVs) are being adopted as the UAE car rental industry is moving towards eco-friendly solutions.
