Market Trends of Tourism Vehicle Rental Industry
This section covers the major market trends shaping the Tourism Vehicle Rental Market according to our research experts:
Online Booking Expected to Witness Significant Growth during the Forecast Period
Increased concern and awareness about the containment of the virus have primarily led to an increase in vehicle rental options. Additionally, the tourism vehicle rental market also provides the option of increased mobility without the concern of paying the costs associated with vehicle ownership. These services are offered via websites and through other online platforms attributing to the growth of the market.
Increasing penetration of the internet and smartphone among consumers is estimated to shift consumers' inclination toward online booking mode. The growth is attributed to consumers' preference to have detailed access to the offerings of accommodation, amenities, and other benefits. For instance, in 2021 more than 60% of the total vehicle rental booking were made through online means. Additionally, owing to the increased internet usage, this number is expected to cross 70% by 2027.
With the growing trend in technology, renting a vehicle through online booking has become the most preferred choice of customers over the past few years. Moreover, it provides additional facilities to monitor a rental vehicle's operation, performance, and maintenance in real-time. Such features are tremendous assets for drivers and fleet managers, enabling them to better identify risks and implement timely improvements to their rental services.
Value for money, convenience, and search for authentic travel experiences are major factors fueling the growth of online booking. The increasing number of startups and third-party travel booking companies are offering services via application and website only. Hence, consumers are shifting their preferences from offline booking mode to online. These aforementioned factors are boosting the growth of online booking mode.
Rising Demand for Tourism Rental Vehicles in North America
The United States is the leader in the tourism vehicle rental market as major car-renting companies have their fleets in almost all the major cities. The size of the fleet for any player depends on the number of tourists preferring to rent a vehicle locally and the volume of foreign passengers visiting a city. Canada has a large domestic and foreign tourism industry.
- Being the second-largest country in the world, Canada's incredible geographical variety and the presence of around 20 world heritage sites are significant tourist attractions across the country. Much of the country's tourism is centered in regions like Toronto, Montreal, Vancouver/Whistler, Niagara Falls, Vancouver Island, Calgary/Canadian Rockies, British Columbia's Okanagan Valley, and the national capital region Ottawa. Therefore, these regions are some major hotspots for tourism vehicle renting.
Europe is also expected to see positive growth during the forecast period. The main driving factors behind corporations expanding their fleets are a good macroeconomic outlook and the government's expansionary policies. Fleet managers are increasingly choosing low-emission vehicles such as electric vehicles and hybrids as the government adopts regulations against polluting diesel automobiles. As leasing is a reasonable car finance option because of the significant residual risks involved with such vehicles, it is expected to discourage van rental companies to expand in the region. Considering the update of electric vehicles, OEMs are launching electric vans in the region. For instance,
- In May 2021, Opel has unveiled its two new vans Movano and Movano-e. The vans are available in two powertrain option such as diesel and electric. The vans are also equipped with High-tech assistance systems for protection of all road users. The vans are available across rest of Europe such as in Poland, Netherlands, Sweden, Greece etc.
Apart from these factors, the increasing demand for rental vehicles is mainly driven by people's interest in road trips and the rising importance of comfort and safety in the wake of the pandemic. The tourism rental market is expected to grow gradually as transport operations returned to their normal functioning with a new normal, i.e., following social security guidelines for safety.
