Car rental companies were among the hardest hit by the pandemic in 2020. However, by 2021 the Saudi car rental (destination) category has begun to show signs of recovery.
The car rental sector in Saudi Arabia is witnessing intense competition at all levels, and in recent years the entry of many investors in this sector has had a positive impact, particularly among small and medium sized enterprises. Moreover, from 25 July 2021, the Transport General Authority announced that all car rental facilities must adopt the unified electronic contract issued through the Tajeer portal system.
It is expected that there will be an ongoing rise in demand due to the anticipated arrival of Hajj pilgrims, arriving domestically. While the ministry has yet again barred international pilgrims to the Hajj for 2021, it is estimated that the influx of a greater number of pilgrims to the Kingdom over the forecast period will offer great potential to the car rental sector, once international pilgrims are allowed to visit once more.
Car rental players are heavily investing in digital offerings and solutions through rentals, used car sales, mobile workshops, and pick-up and drop-off services.
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Car rental covers the short-term rental of passenger vehicles for self-drive by both business and leisure users, whether from the airport or downtown locations. Trucks and commercial vans are excluded. 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 (Destination) research and analysis database.
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