While car rental in the United Arab Emirates is poised to record an improved performance in current value sales terms in 2021, overall growth will be constrained by the comparatively sluggish recovery of business car rental, the dominant category. Business travel – both inbound and domestic – and MICE activity remain subdued due to ongoing concerns about the spread of COVID-19, entry restrictions and the negative economic impact of the pandemic.
At the global level, a number of leading car rental operators have recently experienced serious financial difficulties due to losses arising from COVID-19. These include Hertz, which filed for bankruptcy protection in May 2020 but managed to exit this process in June 2021 after extensive restructuring.
In June 2021, e-commerce giant Amazon began offering an online car rental service in the United Arab Emirates via its Amazon Home Services platform. Available in multiple locations – including Dubai, Abu Dhabi, Sharjah, Ajman and Ras Al Khaimah – this service allows customers to rent vehicles for anywhere between one day and one month, with no security deposit required.
Inbound and domestic business travel flows in the United Arab Emirates are not expected to return to pre-pandemic levels until 2024-2025. As a result, during the first half of the forecast period car rental players are likely to shift their focus to leisure tourism.
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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 DefinitionsThis report originates from Passport, our Car Rental (Destination) research and analysis database.
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