Middle East Car Rental Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

Middle East Car Rental Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

The Middle East Car Rental Market is valued at USD 600.41 Million in 2021 and is expected to reach USD 1642.21 Million by 2027, registering a CAGR of over 15% during the forecast period.

The market for car rentals was severely impacted by the COVID-19 pandemic. The COVID-19 pandemic has caused the region's car rental market to slow down completely due to the sudden and complete suspension of transportation. The Middle Eastern countries' rental car demand continued to decline as a result of the region's declining preference for shared mobility.However, in the aftermath of the pandemic, as the number of tourists has significantly increased, the Middle Eastern's demand for car rentals has significantly increased and is anticipated to continue throughout the forecast period.

Over the long term, 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. Moreover, public transport doesn't give an end-to-end ride, which is especially unfavorable among tourists.

In every Middle Eastern nation, expanding economies like Oman and the United Arab Emirates have fueled the rental car market.Among the Middle Eastern countries, Saudi Arabia generates the most revenue from car rentals.Outstation, event, self-driving, employee transportation, airport transportation, and local use are just a few examples of the many uses for car rentals.In addition, they are providing insurance, entertainment systems, and additional services.The developed Middle Eastern nations are also starting to take notice of the rise of electric cars, which offer the same functionality with the added benefit of having fewer negative environmental effects.

In every Middle Eastern nation, expanding economies like Oman and the United Arab Emirates have fueled the rental car market.Among the Middle Eastern countries, Saudi Arabia generates the most revenue from car rentals. Outstation, event, self-driving, employee transportation, airport transportation, and local use are just a few examples of the many uses for car rentals.In addition, they are providing insurance, entertainment systems, and additional services.The developed Middle Eastern nations are also starting to take notice of the rise of electric cars, which offer the same functionality with the added benefit of having fewer negative environmental effects.

In the region, most of the customers prefer renting cars online. As the car rental market experiences growth in the demand during peak holiday seasons, people tend to book cars in advance. Only a handful of cars are booked through rental stores, and that too, mostly during the offseason.

Currently, booking online also serves a variety of purposes, such as verification of the renter's documents, offering information to the renter regarding the car, determining the details of the drop, and pickup up the rented car at a certain place e-signing of contracts, and cashless transactions. These have helped the car rental companies to gain a competitive edge over their peers during the past few years.

Car rental services offer multiple options that are affordable and can be chosen to suit the customer's needs. The car rental industry in the Middle East nations also sees digital transformation with improved online services, ease of usability, and user satisfaction. Also with the added benefit, minimal responsibility for maintenance, repair, and 24/7 availability is driving the growth Online Rental Booking

Furthermore, the trend of online renting a car through apps has improved over the period as 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, OneClickDrive.com is the United Arab Emirates' largest online platform for car rentals and car leasing. It offers users the choice of more than 700 cars from 50 rent-a-car companies.

Saudi Arabia is one of the most famous pilgrimage places with holy sites like Mecca and Medina that witness large pilgrims during Eid Al-Fitr and Eid Al-Adha festivals. As a result, the country has an annual visitor count of over 16 million, most of which occur in Ramadan. Thus, the majority of tourism in the country is considered religious.

This Saudi Arabia car rental market has seen a constant rise in demand for car rentals, especially amongst the local players in the Middle East Region. Few major players are Hertz Corporation, Sixt, Avis Corporation, and Europcar. As per the WTTC, tourism contributed 9% to the Saudi Arabian GDP of USD 65 billion. Most visitors in the country are from Asia and nearby Middle Eastern countries.

The car rental market's growth is favorable due to stringent government legislation on purchase and car driving in the country. Notably, the month of Ramadan sees tourists from Middle Eastern countries. Bangladesh, Pakistan, Indonesia, Yemen, and Egypt who prefer to rent a car. Additionally, the country has recently lifted a ban on women from driving vehicles. This move allowed numerous women to drive and helped the demand in the car rental market grow by leaps and bounds, as many women with valid driving licenses were finally able to access rented cars on their own.

The Middle East Car Rental Market is moderately consolidated with international and regional players such as Avis Budget Group Inc, SIXT, Hertz Corp, Theeb Rent A Car, Enterprise Holdings Inc and others. To have an edge over their competitors, the major rental companies are making joint ventures, and partnerships to launch newer products.

• In January 2022, ekar, a car-sharing platform from the United Arab Emirates, is partnering with some of Saudi Arabia's largest rental car companies to provide a car subscription leasing service throughout the country.Insurance, upkeep, and roadside assistance are included in the delivery of subscription cars to customers' doors.At any time, the cars can be exchanged, upgraded, or returned.

• The market estimate (ME) sheet in Excel format
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