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Holiday Car Hire - UK - June 2016

“This mature market is dominated by a relatively small number of well established companies with little apparent brand differentiation, and could benefit from an injection of competition and excitement generated by a new disruptive business model – an ‘Airbnb of car hire’ perhaps.”

– John Worthington, Senior Analyst

This report looks at the following areas:

  • Holiday car hire can position itself at the heart of the authenticity trend
  • Car hire brands can create an independent alternative to the growing escorted tour market
  • Boutique, P2P and green branding all likely to appeal to the Millennial traveller

A strong revival of independent overseas travel and lower fuel costs over the past 18 months have benefited holiday car hire and this is expected to continue, although there are risks including a slowing UK economy and a volatile pound. The market remains very price-sensitive and relatively static in terms of new products, but opportunities for development include in-car technology, green branding, short-term rentals, luxury driving experiences, peer-to-peer car hire alternatives and the anticipated emergence of driverless vehicles in the next few years.

This report covers holiday car hire abroad. It excludes any business use, any non-holiday leisure use and any use of car hire in the domestic market. Bookings may be made in the UK, but the primary use for a vehicle must be for a holiday abroad.

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Table of contents

  1. Overview

    • What you need to know
      • Covered in this report
      • Executive Summary

          • Holiday car hire motors ahead
            • Figure 1: Forecast volume of holiday car hires abroad by UK residents, 2011-21
          • Falling fuel prices boost fly-drive holidays
            • Figure 2: Petrol cost per litre in Europe 2016, change (pence per litre) 2014-16
          • Online booking migration continues
            • Figure 3: Booking methods used for hiring last holiday car abroad, March 2016
          • Hertz takes market leadership
            • Figure 4: Holiday car hire brands used in the past three years (with company ownership in brackets), March 2016 versus December 2014
          • Holiday hire penetration up four points
            • Figure 5: Holiday car hire abroad in the past three years, March 2016 versus December 2014
          • Navigational assistance most popular add-on
            • Figure 6: Interest in booking extras for holiday car hire abroad, March 2016
          • Gateway to freedom
            • Interest in P2P car hire in destinations
              • Stress free, driver free holiday hire
                • Figure 7: Attitudes towards hiring a car on holiday abroad, March 2016
              • What we think
              • Issues and Insights

                • Holiday car hire can position itself at the heart of the authenticity trend
                  • The facts
                    • The implications
                      • Car hire brands can create an independent alternative to the growing escorted tour market
                        • The facts
                          • The implications
                            • Boutique, P2P and green branding all likely to appeal to the Millennial traveller
                              • The facts
                                • The implications
                                • The Market – What You Need To Know

                                  • Overseas travel recovery boosts car hire in 2015
                                    • Further growth expected for 2016 but possible trouble on road ahead
                                      • Western Med influx increasing price pressures
                                        • But low fuel costs remain an advantage
                                          • Ageing of the driving population
                                            • The Millennial driver
                                              • New mobility services could impact holiday car hire
                                              • Market Size and Forecast

                                                • Holiday hire finally recovers to 2008 levels
                                                  • Figure 8: Volume of holiday car hires abroad by UK residents, 2011-21
                                                • Forecast
                                                  • Figure 9: Forecast volume of holiday car hires abroad by UK residents, 2011-21
                                              • Market Background

                                                • UK economic growth slowing
                                                  • Figure 10: UK average weekly earnings (excluding bonuses)* vs CPI inflation, percentage change year on year, June 2013-March 2016
                                                • Consumer confidence: still positive but jittery
                                                  • Figure 11: Mintel consumer financial confidence index, January 2009-April 2016*
                                                • EU uncertainty affecting currency markets
                                                  • Figure 12: Annual average exchange rates, GBP versus EUR and USD, 2010-15 and spot rate for May 2016
                                                • Holiday cost of living higher in 2016 but long-term trend still down
                                                  • Overseas holiday revival continues
                                                    • Figure 13: Overseas holiday market volume and value, 2010-15
                                                  • But terrorist threat could affect confidence
                                                    • Rapid independent holiday recovery is good news for car hire
                                                      • Figure 14: Independent versus package overseas holiday volume, 2010-15
                                                    • Holidays to Spain up five years in a row
                                                      • Figure 15: Top 20 overseas holiday destinations by number of trips, 2010-15
                                                    • Western Med expected to benefit from tourism troubles elsewhere
                                                      • Figure 16: Top 10 independently booked overseas holiday destinations, by number of trips, 2010-15
                                                    • Further problems in France but football may provide boost
                                                      • Low oil prices beginning to benefit fliers…
                                                        • …and holiday drivers
                                                          • Figure 17: Petrol cost per litre in Europe 2016, and change 2014-15 and 2015-16
                                                        • Image problems
                                                          • Long-term shifts in the UK driving population
                                                              • Figure 18: Average distance travelled by car/van driver in England, by age, 2002-14
                                                            • Marketing to Millennials
                                                              • On-demand culture could reshape future mobility in destinations
                                                              • Channels to Market

                                                                • Online booking percentage has risen 11 points in past two years
                                                                  • Figure 19: Booking methods used for hiring last holiday car abroad, March 2016
                                                                • Potential for ad hoc hire in destination
                                                                  • Bookings split between direct and third party
                                                                    • Figure 20: Online booking methods used for hiring last holiday car abroad, March 2016
                                                                • Key Players – What You Need To Know

                                                                  • Hertz becomes most popular brand
                                                                    • Avis, Hertz and Enterprise see European expansion
                                                                      • Shift to value-oriented brands
                                                                        • New schemes offer challenge to traditional car hire model
                                                                          • Prestige hires
                                                                            • Europcar offer bike hire
                                                                              • Insurance for older drivers
                                                                              • Market Share

                                                                                • Four groups control market
                                                                                  • Figure 21: Holiday car hire brands used in the past three years (with company ownership in brackets), March 2016 versus December 2014
                                                                                  • Figure 22: Number of holiday car hire brands used in the past three years, March 2016
                                                                                • Expansion being driven by budget brands
                                                                                • Launch Activity and Innovation

                                                                                    • Disruptive models
                                                                                      • Europcar/Ubeeqo
                                                                                        • P2P/car-sharing
                                                                                          • Drivy
                                                                                            • Qwekee
                                                                                              • Residential car share schemes
                                                                                                • WaiveCar offers ad-funded free rental
                                                                                                  • Avis moves into wearable tech
                                                                                                    • Enterprise expands premium hires
                                                                                                      • Car/bike combos
                                                                                                        • Saga launches new insurance product for older hirers
                                                                                                        • The Consumer – What You Need To Know

                                                                                                          • City break hires
                                                                                                            • On the road
                                                                                                              • Little to choose between?
                                                                                                                • De-stressing car hire for older drivers
                                                                                                                  • In-car edutainment
                                                                                                                    • Freedom versus fly and flop
                                                                                                                      • Driverless car potential
                                                                                                                      • Holiday Car Hire Usage

                                                                                                                        • Car hire usage up four points
                                                                                                                          • Figure 23: Holiday car hire abroad in the past three years, March 2016 versus December 2014
                                                                                                                        • Millennial/family biases
                                                                                                                          • Figure 24: Age profile of holiday car hirers in the past three years, March 2016
                                                                                                                        • Over six in ten customers are ABC1
                                                                                                                          • Figure 25: Socio-economic profile of holiday car hirers in the past three years, March 2016
                                                                                                                        • Car hire customers comfortably off but many are on mid-range household incomes
                                                                                                                          • Figure 26: Household income profile of holiday car hirers in the past three years, March 2016
                                                                                                                        • Those who visit North America, Italy and Portugal are most likely to hire a car
                                                                                                                          • Figure 27: Holiday car hire usage abroad in the past three years, by destination visited, March 2016
                                                                                                                        • Car adds extra dimension to beach holiday
                                                                                                                          • Figure 28: Types of holiday on which a car has been hired abroad in the past three years, March 2016
                                                                                                                        • Creating bespoke car tours for older affluent travellers
                                                                                                                        • Reasons Why People Choose A Car Hire Brand

                                                                                                                          • Price is fundamental in commoditised market
                                                                                                                            • Figure 29: Factors influencing choice of holiday car hire company, March 2016
                                                                                                                          • Gamifying deals for younger customers
                                                                                                                            • Parents more likely to be swayed by reputation/recommendation
                                                                                                                              • Hertz versus Europcar versus Avis
                                                                                                                                • Figure 30: Percentage of those motivated by particular factors, by brand chosen in the past three years, March 2016
                                                                                                                            • Holiday Car Hire Extras

                                                                                                                              • Sat Nav and flexibility of pick-up/drop-off are popular extras
                                                                                                                                • Attracting older drivers
                                                                                                                                  • Figure 31: Interest in booking extras for holiday car hire abroad, March 2016
                                                                                                                                • Are we there yet Dad?
                                                                                                                                  • Car as digital detox space
                                                                                                                                    • Greening of holiday hire
                                                                                                                                      • Lap of luxury
                                                                                                                                      • Attitudes Towards Holiday Car Hire

                                                                                                                                        • Freedom and discovery are key messages
                                                                                                                                          • Selling the destination through the car
                                                                                                                                            • Virtual road trips
                                                                                                                                              • Figure 32: Attitudes towards hiring a car on holiday abroad, March 2016
                                                                                                                                            • P2P potential
                                                                                                                                              • Figure 33: Attitudes towards hiring a car on holiday abroad, MARCH 2016
                                                                                                                                            • Driverless car could offer stress-free alternative
                                                                                                                                            • Appendix

                                                                                                                                              • Definition
                                                                                                                                                • Abbreviations

                                                                                                                                                Companies Covered

                                                                                                                                                To learn more about the companies covered in this report please contact us.

                                                                                                                                                Holiday Car Hire - UK - June 2016

                                                                                                                                                £1,995.00 (Excl.Tax)