This report analyses market trends and consumer attitudes towards holiday car hire, investigating the core market factors, strengths and weaknesses, innovations, consumer dynamics and key players in the industry.
- Following strong growth in holiday car hire abroad since 2005, the number of hires dropped by an estimated 9% to 2.9 million in 2009 before starting to recover slowly in 2010. The relative affluence of customers helped to soften the blow of recession, as overseas holiday numbers as a whole fell by 16% in 2009 and have dropped further in 2010.
- Despite prospects for renewed growth, holiday car hire remains a niche product – approximately one in 17 people who went on holiday abroad over the past 12 months hired a vehicle. However for longer (non short-break) holidays, car hire penetration is roughly comparable with use of ferries and more popular than both Eurotunnel and Eurostar crossings.
- Better fleet management and utilisation rates enabled many suppliers to emerge strongly from the recession. For consumers however, prices have risen thanks to reductions in supply and the growing costs of motoring overseas. In 2010, unleaded petrol prices rose by varying amounts across Europe (with Sweden’s 24% increase the highest) and, as a result of operators cutting capacity, average prices have risen significantly across the most popular destinations.
- Travel industry and demographic trends are working in favour of holiday car hire – the shift towards independently booked travel and away from packages is continuing, for example. In addition, the core customer demographic – consumers from socio-economic group AB – is forecast to grow at double the rate of the population as a whole over the next five years. The relative affluence of this group opens up significant opportunities to offer (for example) premium grade vehicles and VIP services such as chauffeur-driven trips.
- Six in ten customers spend between £101 and £250 per hire. £101-£150 is the most popular price bracket with around a quarter of customers paying this amount, while three in ten hirers pay more than £250. Seven days is the most common rental period, accounting for a fifth of hires, while three in ten last between one and three days. Half of all customers tend to go for the cheapest available option and are unwilling to exceed paying £200 per week.
- Amongst consumers who have hired a car abroad in the last three years, over two thirds made bookings online a month or more before travelling and nine in ten made advance bookings via the internet. Just over half of customers book a month or more before travelling; around three in ten book within a month of travelling; and two in ten books on arrival at their holiday destination.