GCC Car Rental Market- By Booking, By Vehicle, By Rental Duration, By End User, By Country - Opportunity Analysis & Industry Forecast, 2024-2030.

GCC Car Rental Market Overview:

GCC Car Rental Market size is estimated to reach $11.9 billion by 2030, growing at a CAGR of 6.7% during the forecast period 2024-2030 mainly driven by increasing tourism, infrastructure developments and the growing expatriate population. Government investments in tourism and transport infrastructure are reshaping the mobility landscape making rental services essential for both tourists and residents. The convenience of online booking has become central with platforms simplifying rental processes and attracting a tech-savvy customer base. As business travel surges, the demand for premium rental services is also expected to rise.

A major trend in the market is the growing concerns over sustainability and climate change. Growing awareness of the environmental impact has led some rental companies to introduce hybrid and electric vehicles catering to eco-conscious consumers. According to an article in the Khaleej Times dated December 2023, UAE-based multi-brand electric vehicle start-up, EVLAB, rolled out an all-in-one mobility app offering a comprehensive collection of EV brands in the region. Through this app, EVLAB aims to make adopting a sustainable lifestyle easier for drivers by enabling seamless rental, leasing and hosting of their EVs. Another trend is the integration of telematics. Car rental companies are adopting telematics for vehicle tracking, safety monitoring and streamlined fleet management to enhance operational efficiency.

Market Snapshot: 

GCC Car Rental Market- Report Coverage:

The “GCC Car Rental Market Report - Forecast (2024-2030)” by IndustryARC, covers an in-depth analysis of the following segments in the GCC Car Rental Market.

Impact of Covid and Russia Ukraine War:

• The COVID-19 pandemic significantly impacted the GCC car rental market, with lockdowns, travel restrictions and reduced tourism resulting in decreased demand. The sharp drop in international and domestic travel led to a temporary reduction in rental bookings and long-term rentals while corporate and business rental services also experienced declines.
•  The ongoing Ukraine-Russia conflict's impact on GCC Car Rental is indirect. The war contributed to global economic uncertainty and energy price volatility by leading to rising oil prices which increase fuel costs for rental companies and consequently affect rental rates.

Key Takeaways:

• Saudi Arabia Leads Market

Saudi Arabia is the largest market within the GCC car rental industry mainly attributed to the high demand from domestic tourism. Additionally, a large expatriate population and expanding business travel drives the market. The government’s focus on tourism, economic diversification and infrastructure investment, along with major events such as the Hajj pilgrimage contribute to the high demand for car rentals. With an influx of tourists and businesses, rental companies have been expanding their presence and fleet offerings across Saudi Arabia. In June 2024, Changan Almajdouie, a leading automotive brand in Saudi Arabia, announced a continued significant partnership with Yelo, a premier car rental service in the Kingdom. This strategic collaboration will see Yelo integrate additional 2,000 units of Alsvin into their rental fleet additional to the 15,500 units sold across the years from various models which ensures further solidifying Changan’s presence in the Saudi market. This growing demand solidifies Saudi Arabia’s position as the leading country within the GCC car rental market.

1.    Online Booking is the Largest Segment

Online booking holds the largest share in the GCC car rental market driven by the convenience and flexibility it offers to customers. According to Ericsson Mobility Report, smartphone penetration in the GCC region was 82% at the end of 2020. In aggregate, the GCC is forecast to have 62 million 5G mobile subscriptions by the end of 2026. With a high rate of internet penetration and a digitally savvy population in the region, online booking platforms enable customers to quickly compare prices, view vehicle options and secure reservations. The ease of access through mobile apps and websites as well as exclusive online deals attract both residents and tourists boosting online booking usage. Additionally, the integration of real-time data, secure payment options and easy cancellation policies further streamline the process making online booking the preferred choice for car rentals in the GCC.

2.    Self Driven is the Largest Segment

The self-driven segment is the largest in the GCC car rental market favored by tourists and residents who prefer independence and flexibility when traveling. Self-driven rentals enable customers to explore the region at their own pace and have become popular due to easy access through online booking platforms. This segment particularly appeals to tourists from Europe and America who seek the freedom to plan their schedules without dependency on chauffeur services. For instance, according to Visit Dubai, the Official Tourism Board of Dubai, citizens of the UK, USA, Canada, Germany, South Korea, France and Japan can drive in the city with the driving licence issued from their own country. Additionally, rental companies in the GCC provide a wide range of vehicle options and price points, making self-driven rentals accessible and attractive to diverse customer segments.

3.    Growing Tourism Industry Drives the Market

The flourishing tourism industry is a major driver of the GCC car rental market, with cities like Dubai, Riyadh and Doha attracting millions of international visitors each year. Dubai welcomed 9.31 million international overnight visitors from January to June 2024, a 9% increase over the 8.55 million tourist arrivals in the first half of 2023, according to data published by Dubai Department of Economy and Tourism (DET). The influx of tourists has increased the demand for car rentals. Government initiatives to promote tourism and major events further fueled this demand. In 2022, Qatar saw a remarkable surge in international tourist arrivals, reaching 2.6 million visitors, a significant increase from the 0.6 million recorded in 2021. Major events like the FIFA World Cup, Lusail Super Cup, Darb Lusail Festival and the Qatar Motor Cycle Grand Prix contributed to this sharp rise in visitor numbers. The continued rise in leisure and business tourism is expected to drive sustained growth for the car rental market in the region, benefiting both short-term rentals and premium services. 

4.    Rising Prices to Hamper the Growth

Rising prices poses a challenge to the GCC car rental market by increasing operational costs which impacts pricing for customers. The cost of vehicle acquisition, maintenance and fuel has risen due to inflation compelling rental companies to adjust prices to offset these expenses. With higher rental rates, some consumers may reduce discretionary spending on rentals or opt for short-term use instead of extended rentals. Additionally, inflation affects traveler budgets, potentially reducing the frequency and duration of rentals among tourists and expatriates.

GCC Car Rental Market: Market Share (%) by Geography, 2023

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Key Market Players: 

The top 10 companies in the GCC Car Rental Market are:

1.  SIXT
2.  Hertz
3. Hanco (Al Tala’a International Transportation Co. Limited)
4. Avis Budget Group, Inc.
5. Europcar Mobility Group
6. Speedy Drive Car Rental
7. Budget Rent A Car LLC
8.  Autostrad Rent a Car
9. Selfdrive Mobility
10.  Gulfcar Rental

Scope of Report:

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