Car rental companies are experiencing a unique moment. The industry is in a period of global growth, and it is expected to continue in the coming years. The combination of factors such as the post-pandemic recovery, increased business and leisure travel, and the impact of technological advancements have created a unique opportunity for car rental companies looking to expand.
According to a study by Grand View Research, the global car rental market experienced significant growth in 2020, reaching a value of USD 98.14 billion, and it is expected to grow at a compound annual growth rate (CAGR) of 4.6% from 2021 to 2028. If this reading seems optimistic, Mordor Intelligence projects an even higher CAGR. According to their latest report, the car rental market is expected to reach USD 223.07 billion by 2027, projecting a CAGR of over 11% during the forecast period (2022-2027).
Multiple factors are driving this change. Firstly, after the pandemic, there has been an increase in the number of people traveling for both business and leisure purposes worldwide. This has led to a rise in demand for car rental services, resulting in industry growth.
In addition, there has been an evolution of the trend known as "bleisure," which combines leisure travel with business travel. This concept is gaining popularity worldwide, as it is increasingly acceptable to bring families on corporate trips.
As a result of this trend, the executive car segment is expected to register a CAGR of over 5.5% between 2021 and 2028, as these vehicles offer customers a combination of premium features at reasonable prices.
The increasing penetration of the Internet in both developing and developed countries has helped market companies reach a broader customer base through dedicated mobile applications for customer convenience.
The impact of technological advancements has revolutionized the industry in recent years. Improved customer and corporate information management and hassle-free online booking applications are two prominent ways in which car rental service providers offer enhanced services to their customers.
Furthermore, the growing dependence of users on smartphones to perform various tasks that were traditionally done on computers has transformed the car rental experience for customers.
This, in turn, is complemented by the launch of more mobile applications by car rental companies. By providing clear, efficient, and secure apps, customers have experienced simplification in the vehicle selection process among a wide range of options and the ability to make reservations.
Find more information in our article: Online car rental reservations: a growing trend in the Rent a Car Industry
Moreover, the refinement of the Rental Management Systems has contributed to this growing industry trend. This type of technology has made it possible for small car rental companies to compete at a higher level. By centralizing operations, these programs have generated greater fleet predictability, a clear financial overview, and improved communication with customers, which is crucial for this type of business.
Furthermore, this software has enhanced the customer experience and streamlined operational tasks for rental companies. By integrating payment platforms, billing systems, and major international brokers/portals, they have started to offer a complete, simple, and secure experience.
Additionally, they have enabled the digitization of task management and process optimization. For example, software like Rently has allowed for better tracking of long-term rentals, facilitating invoicing for both customers and employees. They have also simplified the reservation process by enabling intelligent contract handling.
You can learn more in the article "The Future is Car Rental Management Software."
The car rental industry is currently undergoing a remarkable period of growth, making it an opportune time to be part of this trend. If you own a car rental company and are seeking a technological partner to navigate this pivotal moment, we encourage you to explore our services.
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