The GCC Car Rental Market is anticipated to register a CAGR of about 15.7% during the forecast period (2020 - 2025).
- Car rental companies rent out cars for a suitable fee for a specific duration. Generally, hiring periods could range from a few hours to also a few days or weeks. With hassle-free, low maintenance, and cheap pricing, renting cars is also becoming popular in the GCC markets.
- The market for car rental in all the GCC nations has been driven by growing economies like the United Arab Emirates and Oman. Saudi Arabia constitutes most car rental revenues amongst the GCC nations.
- Car rentals can have various purposes, including airport transport, local usage, outstation, event transportation, self-drive, and employee transportation. They are also offering additional services such as entertainment systems, GPS navigation systems, and insurance. Rise of electric cars providing the same utility with an added benefit of reduced ill-effects on the environment is also becoming popular amongst the developed GCC countries.
Key Market Trends
Demand for Travel to Pilgrimage Sites, Growing Tourism and Regulations
The car rental market's growth is favourable 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 unfavourable among tourists.
During the month of Ramadan, the Middle-Eastern countries see the largest renting of cars. These also include people from Bangladesh, Pakistan, Indonesia, Yemen, and Egypt who prefer to rent a car. Upcoming FIFA world 2022 in Qatar and petroleum projects are is likely to the primary drivers in the car rental market in the GCC market.
The Car rental services are offering online systems, including mobile applications, to gain consumers. 53.3% of adults in the GCC region have access to the internet through their mobile phones, which is also one of the highest amongst all other areas of the Middle-East and Africa region. As mobile phone use has risen, the usage of smartphones for convenient Car rental booking has also increased. Also, Saudi Arabia recently lifted a ban on women from driving vehicles, expanding the demand for car rental users.
United Arab Emirates is the Largest Market
United Arab Emirates 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.
As of 2019, United Arab Emirates is seeing a growing number in the tourists visiting annually.
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. The city offers a variety of restaurants, bars, and nightclubs. Also, Abu Dhabi is popular amongst travellers visiting the UAE due to its culture, heritage, and attractions, such as Sheikh Zayed Mosque, Khalifa Park, among others. Moreover, many corporate offices also rent cars for their corporate uses and clients, hence causing growth in demand for rental services .
With the growing economy in the United Arab Emirates 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 United Arab Emirates car rental industry is moving towards eco-friendly solutions.
The GCC Car Rental Market is hugely fragmented with various startups, and regional players such as Budget rent a car, Thrifty, Sixt rent a car, Hertz, and Fast rent a car. Although to have the edge over its competitors, the major rental companies are making joint-ventures, partnerships to launch newer products.
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