Demand for car rental plummeted in 2020 with the outbreak of COVID-19 leading to a sharp decline in inbound arrivals. A further surge in cases saw travel restricted again from December 2020 until March 2021.
Car rental was already in decline in 2019 as demand dropped due to locals increasingly purchasing their own cars. Private vehicle ownership remains a significant barrier to growth in car rental in Israel, with players thus heavily reliant on inbound arrivals for business.
Ride-sharing companies and P2P car sharing platforms are expected to continue growing over the forecast period. This should be spurred on by a reluctance to use public transport for social distancing reasons and the increased interest in low-cost, environmentally friendly solutions which provide efficient and convenient transport on demand.
Despite the growing competition from alternative services, car rental is nonetheless expected to return to growth over the forecast period with it making a slow recovery from the COVID-19 crisis. On the one hand, improving vaccination rates in key source markets are making it safer for Israel to accept inbound arrivals, which should support car rental sales to tourists.
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Car rental covers the short-term rental of passenger vehicles for self-drive including small vans by both business and leisure users, whether from the airport or downtown locations. Small vans up to one tonne are included. For longer than average rental periods, eg rental of one month, provided the rental is sourced from the short-term rental fleet, this transaction is included. Car rental value covers the price of car hire to the consumer. Ancillary revenues are included, such as the hire of baby car seats, GPS navigation systems, optional roadside assistance services and collision and damage waivers. Volume is provided by the number of car hire transactions, fleet size and number of car rental operators. In underdeveloped markets, car rental companies offer chauffeur-driven cars. Most people prefer these options, due to unfamiliarity with the roads. Euromonitor International includes chauffeur-driven cars in car rental, when they concern car rental companies such as Hertz or Avis, which offer a chauffeur-driven service as an additional option. Car rental covers sales to inbound tourists and domestic tourists. i.e. from a destination point of view (also known as point of supply). For example, if a US citizen books a car rental service in France via the US offices of Hertz, the sales are attributed to Hertz France. The same applies for online sales. Car rental excludes long-term leasing, commercial vehicles, trucks and motorbikes and local car sharing schemes.See All of Our Definitions
This report originates from Passport, our Car Rental research and analysis database.
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