The World Travel and Tourism Council reported that in 2018, a growth of 3.9% was witnessed by the global travel and tourism industry. It created more than 319 million jobs worldwide and amassed $8.8 trillion in 2018. This massive growth in the industry also boosted the growth of other related industries, such as car rental.
Nowadays, tourists prefer renting cars to explore a new place as it gives them the flexibility of planning their own itinerary without the fear of relying on public transport system. Car rental services allow customers to travel to their choice of places as per their convenience.
Further, the rising disposable income has also established the trend of more people taking short trips. Rather than taking their own vehicle, customers prefer renting cars; airport rentals are the most common as tourists rent a car immediately after landing in a new country and keep the car with them for the whole duration of their stay or drop them off at convenient drop-off points.
Witnessing a 7.9% CAGR, the car rental market is expected to generate a revenue of $122.6 billion in the coming years.
Car rental services are offered via three different vehicle types: luxury, executive, and economy. During 2014-2018, the economy vehicle type was used the most for car rental services. These cars are inexpensive and are smaller in size and have a seating capacity of four to five persons. Being smaller in size, these cars have a high fuel efficiency, which makes them a suitable option for rental services.
Further, amidst growing environmental concerns, these cars are witnessing a high demand as their impact on the environment is not as severe as other cars. In the coming years, the luxury cars are predicted to register a faster growth in demand, as the global disposable income is improving. These cars offer superior performance, comfort, and have better configuration.
One of the key trends in the car rental market is the deployment of electric vehicles for rental purposes. In wake of rising concerns about vehicular emission, governments of many countries are bringing in stringent regulatory policies to cut down on such emissions. From offering subsidies and incentives to creating awareness about the harmful effects of conventional energy sources on the environment, governments and various organizations are working toward popularizing the use of electric vehicles.
The popularity of the internet has resulted in the development of the online or digital car rental system, which is helping the car rental sector become more organized. Online car rental allows the consumers to shortlist the car of choice, and make bookings well in advance without the hassle of visiting the office.
Further, majority of the companies have their own applications, which can be used by consumers to avail any assistance that they may need throughout the rental period. Therefore, the digitization of the car rental process has made it much safer, transparent, and cost-effective, which has been instrumental in making these services popular.
Following the global trend, a significant increase in the car rental market is also expected in Portugal and the Algarve.
Hoteliers in the Algarve and Madeira expect the British market to grow this year, an expectation that the executive chairman of the Portuguese Hotel Association (AHP) attributes to political stabilization in the United Kingdom after the elections.
The growth forecast is the conclusion of a survey of AHP associated hotels and / or members of the AHP Tourism Monitor, carried out between 12 December and 10 January.
One of the conclusions highlighted in the presentation is that “the Algarve has a high estimate of the UK market”, started by revealing Cristina Siza Vieira, executive president of AHP.
Another conclusion highlighted by Cristina Siza Vieira is “an interesting growth perspective for the North American market” and also for the Brazilian market in the Central, North and Lisbon regions.
You Drive Car Hire, attentive to the new trends in the Algarve's rent-a-car market, has been investing in greater digital facilities to allow faster and more functional online rental car reservations in Algarve for its customers and adapted to new peripherals such as smartphones and tablets.