Market Trends of UAE Car Rental Industry
This section covers the major market trends shaping the UAE Car Rental Market according to our research experts:
Growing Demand for Travel to Propel The Demand
The emergence of staycations is a new trend in the travel and tourist sector. This relatively new concept defines a blend of leisure and business travel and is gaining traction.
Bringing the family on professional travels is becoming more accepted as businesses embrace this trend to promote staff retention and relieve some of the stress of crucial road warriors. As younger employees become more business travelers, this incentive is becoming more tempting to recruiters. This idea is especially useful for abroad visits where employees may become familiarized with areas, especially significant business specifics.
The expansion of the car rental business is favored by the country's stringent government laws on car buying and driving. Using public transit may be inconvenient and unexpected. Moreover, cities such as Dubai require long distances to visit tourist attractions. Furthermore, public transportation does not provide an end-to-end journey, which is particularly inconvenient for visitors.
Players in the market are coming with convenient plans for their users to attract new customers and gain market share. For instance,
- In February 2021, self-driving vehicle platform, ekar, launched a new subscription-based program for its users in the Middle East. The portal's customers in the United Arab Emirates and Saudi Arabia can book cars ranging from economy to luxury for a period of one month to nine months.
Taxis, passenger cars and charter vehicles with flexibility and other features such as real-time feedback, vehicle monitoring, and rating to end clients are on the rise. Numerous smartphone applications make it easier to find available automobiles and compare rates with the respective car rental businesses. Such development has also positively impacted the market growth during the forecast period.
Online Booking Services to Gain Momentum
Car rental services in the UAE provide booking options on a mobile app or website of a cab company. Further, the option of an online mode of payment has eased the process. The prominent factors driving this ecosystem are affordability and ease of access to the services. The demand for car rental is escalating due to on-demand payment from customers for convenience and affordability.
Online booking mode has several advantages and numerous transparency-related issues that are continuously monitored and rectified by companies. The day-to-day operations of car rental companies are managed through a centralized system. Compliance policies, rules, regulations, and terms and conditions are followed, which often differ from one company to the other. Furthermore, the payment process for booking is managed by mediators or any third-party organization. With more entities engaged, this becomes a problem and creates a lack of transparency. For instance:
- In November 2021, EzzeCar launched as a virtual marketplace for car rental companies to sell their vehicles and manage their fleets, with the goal of being a one-stop-shop for car renters to obtain vehicles that match their needs. The platform provides vehicles ranging from inexpensive to luxury and sports automobiles.
Considering the aforementioned factors, demand for online booking mode is expected to witness more prominence during the forecast period.
