GCC Car Rental Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

GCC Car Rental Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The GCC Car Rental Market was valued at USD 600 Million in 2021 and is expected to reach USD 1600 Million by 2027, registering a CAGR of over 15% during the forecast period.

The COVID-19 pandemic had a severe negative impact on the car rental market. The sudden and complete transport halt due to the COVID-19 pandemic has forced the slowdown of the car rental market in the region. The reduced preference for shared mobility in the region further deteriorated the demand for rental cars in GCC countries. However, post-pandemic, as the tourist footfall has increased significantly, the demand for car rental has witnessed a significant increase across GCC and is expected to continue during the forecast period.

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 TrendsOnline 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.

Competitive Landscape

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.

In November 2021, Saudi Arabia-based car rental and mobility startup, Teglani, raised USD 2.5 million in a pre-Series A round led by Impact46 with participation from Nomw Capital. Telgani has agreements and partnerships with more than 50 local and international car rental companies and +500 branches across the country, covering more than 44 cities and 13 airports.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

Please note: This publisher does offer titles that are created upon receipt of order. If you are purchasing a PDF Email Delivery option above, the report will take approximately 2 business days to prepare and deliver.