2021
9
UK Holiday Car Hire Market Report 2021
2021-04-09T04:14:25+01:00
OX1042547
2195
136449
[{"name":"Holidays and Travel","url":"https:\/\/store.mintel.com\/industries\/holidays-travel"}]
Report
en_GB
“Car rental companies abroad can benefit from higher demand for holidays in quieter areas to stay, where having a car would be useful. However, enhancing the flexibility of the car…

UK Holiday Car Hire Market Report 2021

£ 2,195 (Excl.Tax)

Report Summary

Providing the most comprehensive and up-to-date information and analysis of the UK Holiday Car Hire market, including the behaviours, preferences and habits of the consumer.

The international lockdowns in response to the COVID-19 pandemic caused a major decline in all sections of the travel industry. The cancellation of postponing of domestic and foreign holidays saw the volume of overseas holiday car hire fall by 77%.

The demand for staycations is expected to spike once national lockdowns lift, with international trips following once it is established when and where UK citizens can travel. Many people have saved money throughout the pandemic, thanks to limited spending opportunities.

38% of UK overseas travellers report being interested in hiring a car during a holiday abroad within the 3 years of November 2020. The interest peaked among families and affluent travellers, which indicates a greater demand for larger cars and premium vehicles.

Travel uncertainty will continue even after the lockdowns lift, meaning a greater demand for staycations. However, the vaccination programme has created more confidence and interest in holidays for the second half of 2021. 40% of holidaymakers still plan on going abroad, meaning a potential surge in car-hire bookings and self-drive holidays once lockdowns end.

Read on to discover more details or take a look at all of our UK Holiday and Travel and UK Automotive market research.

Quickly understand

  • The impact of COVID-19 on holiday car hire and self-drive holidays.
  • Experience and interest in holiday car hire and self-drive holidays.
  • Motivations for holiday car hire and self-drive holidays.
  • Competitive threats to traditional car rental companies.
  • Company activity during the pandemic.
  • Plus many other areas within the car hire industry in the UK.

Covered in this report

Brands: Kyte, Move Mee, Hertz, Turo, Getaround, Uber, Ola.

Expert analysis from a specialist in the field

Written by George Zaborowski, a leading analyst in the Holidays & Travel sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Car rental companies abroad can benefit from higher demand for holidays in quieter areas to stay, where having a car would be useful. However, enhancing the flexibility of the car hire experience will be essential to capitalise on future growth potential. Meanwhile, the expected staycation boom in 2021 creates opportunities for brands to develop and promote self-drive touring holidays in the UK.
George Zaborowski
Senior Analyst

Table of Contents

  1. Overview

      • Key issues covered in this Report
        • COVID-19: market context
          • Economic and other assumptions
            • Products covered in this Report
            • Executive Summary

                • Impact of COVID-19 on holiday car hire
                  • Figure 1: Short, medium and long-term impact of COVID-19 on the UK overseas holiday car hire market, 26 March 2021
                • The market
                  • Holiday car hire volumes estimated to have fallen by 77% in 2020
                    • Market recovery set to slowly take shape from the second half of 2021
                      • Figure 2: Forecast of total overseas car hire volume, 2015-25 (prepared on 26 March 2021)
                    • Consumers broadly positive about finances despite the pandemic
                      • Increase in staycations will boost interest in UK self-drive touring holidays
                        • Companies and brands
                          • COVID-19 forced car hire firms to alter business practices
                            • Contactless car hire set to become an industry standard
                              • P2P car sharing gaining momentum
                                • The consumer
                                  • Uncertainty about the return of international travel restricting car hire booking levels
                                    • Just under a third of UK travellers have used car hire during a trip abroad
                                      • Figure 3: Holiday car hire, November 2020
                                    • Convenience and cost-effectiveness drive demand for car hire
                                      • Figure 4: Main reasons for hiring a car during a holiday abroad, November 2020
                                    • Selection of car hire supplier primarily driven by price
                                      • Figure 5: Most important factors influencing the choice of car hire provider, November 2020
                                    • A quarter of holidaymakers have driven from the UK to an overseas destination
                                      • Figure 6: Self-drive holidays abroad, November 2020
                                    • The decision to self-drive to an overseas holiday destination is primarily linked to convenience
                                      • Figure 7: Main reasons for using own car to take a self-drive holiday abroad, November 2020
                                    • Strong interest in car hire among overseas travellers
                                      • Figure 8: Interest in car hire and self-drive holidays abroad, November 2020
                                    • COVID-19 has enhanced the appeal of self-drive holidays and car hire
                                      • The need for a more flexible car hire experience
                                        • Figure 9: Attitudes towards holiday car hire and self-drive holidays from the UK, November 2020
                                      • Healthy interest in self-drive touring holidays from families and the affluent
                                        • Figure 10: Self-drive touring holidays taken vs interest in taking one in the future, November 2020
                                    • Issues and Insights

                                      • Premium holiday car hire segment to benefit from pent-up demand
                                        • Innovations essential to protect the future of the car rental industry
                                        • The Market – Key Takeaways

                                          • Holiday car hire volumes estimated to have declined by 77% in 2020
                                            • Market recovery set to slowly take shape from the second half of 2021
                                              • Consumers broadly positive about finances despite the pandemic
                                                • Increase in staycations will boost interest in UK self-drive touring holidays
                                                • Market Size and Forecast

                                                  • COVID-19 travel restrictions hindering holiday car hire market recovery
                                                    • Figure 11: Short, medium and long-term impact of COVID-19 on the UK overseas holiday car hire market, 26 March 2021
                                                  • Holiday car hire volumes estimated to have declined by 77% in 2020
                                                    • Figure 12: Forecast of total overseas car hire volume, 2015-25 (prepared on 26 March 2021)
                                                  • Market recovery set to slowly take shape from the second half of 2021
                                                    • Market not expected to reach pre-COVID-19 levels until 2023
                                                      • Figure 13: Forecast of total overseas car hire volume, 2015-25 (prepared on 26 March 2021)
                                                    • Market drivers and assumptions
                                                      • Figure 14: Key drivers affecting Mintel’s market forecast, 2015-25 (prepared on 26 March 2021)
                                                    • Learnings from the last recession
                                                      • Figure 15: Total overseas car hire volume, 2008-15*
                                                    • Forecast methodology
                                                    • Market Drivers

                                                      • Overseas travel ban could be lifted as early as 17 May 2021…
                                                        • …but many will still be hesitant to commit to a holiday abroad
                                                          • Increased popularity of staycations boosting interest in UK self-drive touring holidays
                                                            • Most Britons positive about their finances at the start of 2021
                                                              • Figure 16: Trends in current financial situation, December 2019-February 2021
                                                            • Consumer confidence on an upward trend entering 2021…
                                                              • …but many likely to remain cautious about spending
                                                                • Figure 17: Financial confidence in the year ahead, December 2019-February 2021
                                                              • After several years of weakness, Pound is strengthening
                                                                • Figure 18: Pound versus euro and US Dollar, 1 February 2016-18 February 2021
                                                              • Fuel economy will be in focus with oil price rising to pre-COVID-19 levels
                                                                • Demand for hybrids and electric car hire is there but supply is still lacking
                                                                  • Figure 19: Price of Europe Brent Spot Price FOB (Dollars per Barrel), January 2016-January 2021
                                                                • Rideshare changing how consumers view car hire
                                                                  • New rules now apply to Britons driving in the EU post-Brexit
                                                                    • CMA has taken action against big five car hire firms on hidden charging
                                                                    • Companies and Brands – Key Takeaways

                                                                      • COVID-19 forced car hire firms to alter business practices
                                                                        • Contactless car hire set to become an industry standard
                                                                          • P2P car sharing gaining momentum
                                                                          • Competitive Strategies

                                                                            • COVID-19 has forced car hire firms to adapt
                                                                              • Hertz pushed into bankruptcy protection after sharp drop in bookings early in the pandemic
                                                                                • Contactless car hire set to become the norm
                                                                                  • P2P car sharing services offer a compelling alternative
                                                                                    • Turo has experienced growth during COVID-19 and plans to go public in 2021
                                                                                      • Getaround secures further funding in October 2020 after a successful 2020
                                                                                      • Launch Activity and Innovation

                                                                                        • Contactless car hire set to become the norm
                                                                                          • Europcar plans to use AI to automate car hire
                                                                                            • Avis and Hertz already had contactless services in place prior to COVID-19
                                                                                              • Kyte – a car hire platform that delivers cars straight to renters
                                                                                                • Move Mee – a contactless car hire platform where a renter’s phone acts as car key
                                                                                                  • Boosting self-drive touring holidays
                                                                                                    • Digital marketing campaign to promote the Scottish self-drive route North East 250
                                                                                                      • Up Norway launches new self-drive itinerary with focus on local culture and low-carbon activities
                                                                                                      • The Consumer – Key Takeaways

                                                                                                        • Families and affluent travellers show strong interest in car hire abroad
                                                                                                          • Convenience and cost-effectiveness drive demand for car hire
                                                                                                            • The need for a more flexible car hire experience
                                                                                                              • The decision to self-drive to an overseas holiday destination is primarily linked to convenience
                                                                                                                • Healthy interest in self-drive touring holidays from families and the affluent
                                                                                                                • Impact of COVID-19 on Consumer Behaviour

                                                                                                                  • Uncertainty restricting pent-up demand for main holiday bookings
                                                                                                                      • Figure 20: Booking intentions for main holiday, 21 January-12 March 2021
                                                                                                                    • More opting for a staycation as their main 2021 holiday
                                                                                                                        • Figure 21: Expected destination of main holiday in 2021, 21 January-12 March 2021
                                                                                                                      • COVID-19 anxiety is falling but caution about travel abroad will remain
                                                                                                                          • Figure 22: Consumer concern about COVID-19, February 2020-March 2021
                                                                                                                      • Holiday Car Hire

                                                                                                                        • Just under a third of UK holidaymakers have hired a car abroad
                                                                                                                          • Figure 23: Holiday car hire, November 2020
                                                                                                                        • Under-45s the most likely to hire a car during an overseas holiday
                                                                                                                          • Families with young children a key target market
                                                                                                                            • Figure 24: Holiday car hire, by age, November 2020
                                                                                                                        • Main Reasons for Car Hire

                                                                                                                          • Car hire simplifies the transport needs for overseas holidaymakers
                                                                                                                            • Many travellers turn to car hire if it is cheaper than other options
                                                                                                                              • Figure 25: Main reasons for hiring a car during a holiday abroad, November 2020
                                                                                                                          • Key Factors Driving Choice of Car Hire Provider

                                                                                                                            • Choice of car hire supplier predominantly driven by price
                                                                                                                              • Provider pick-up/drop-off process and brand reputation relevant points of differentiation
                                                                                                                                • Availability of eco-friendly vehicles an emerging area of focus
                                                                                                                                  • Figure 26: Most important factors influencing the choice of car hire provider, November 2020
                                                                                                                              • Self-drive Holidays Abroad from the UK

                                                                                                                                • One in four have driven from the UK to an overseas holiday destination
                                                                                                                                  • Figure 27: Self-drive holidays abroad, November 2020
                                                                                                                                • Convenience the main factor for choosing to drive abroad
                                                                                                                                  • Travelling abroad by car holds many advantages for families with young children
                                                                                                                                    • Figure 28: Main reasons for using own car to take a self-drive holiday abroad, November 2020
                                                                                                                                • Interest in Holiday Car Hire and Self-drive Holidays from the UK

                                                                                                                                  • Pent-up demand for car hire waiting to be released
                                                                                                                                    • Figure 29: Past experience with vs interest in car hire abroad and self-drive holidays from the UK, November 2020
                                                                                                                                  • Interest in self-drive holidays from the UK in line with past activity
                                                                                                                                  • Attitudes towards Holiday Car Hire and Self-drive Holidays from the UK

                                                                                                                                    • COVID-19 a key factor sparking interest in self-drive holidays from the UK…
                                                                                                                                      • …and has also contributed to greater interest in holiday car hire
                                                                                                                                        • Figure 30: Attitudes towards holiday car hire and self-drive holidays from the UK, November 2020
                                                                                                                                      • Enhancing the car hire pick-up and drop-off experience can improve demand
                                                                                                                                        • Rideshare has reduced the appeal of car hire for younger adults
                                                                                                                                          • Figure 31: Level of agreement with “The availability of ride-sharing apps (eg Uber, Ola) has made hiring a car on holiday less appealing”, by age, November 2020
                                                                                                                                      • Experience and Interest in Self-drive Touring Holidays

                                                                                                                                        • Nearly half of UK adults interested in a self-drive touring holiday
                                                                                                                                          • Families a key target group for UK-based self-drive touring holidays
                                                                                                                                            • Affluent show the most interest in self-drive tours abroad
                                                                                                                                              • Figure 32: Self-drive touring holidays taken vs interest in taking one in the future, November 2020
                                                                                                                                          • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                              • Abbreviations
                                                                                                                                                • Consumer research methodology
                                                                                                                                                • Appendix – Market Size and Forecast

                                                                                                                                                  • Market forecast
                                                                                                                                                    • Figure 33: Forecast of total overseas car hire volume, 20-2025
                                                                                                                                                  • Forecast methodology

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