Driving force: Rising domestic air travel will support industry growth for car rentals

Bolstered by a favorable economic climate, the Car Rental industry has performed well over the past five years. Rising per capita disposable income has encouraged consumers to increase their level of spending on both car leases and discretionary travel expenses, including car rentals for leisure trips. Elevated traffic at domestic airports has further boosted industry revenue, as the majority of rental sales occur at airport-based establishments. IBISWorld expects the industry to continue expanding over the five years to 2023. Industry demand is anticipated to rise alongside an increase in domestic air travel, supported by favorable expansions in the US economy...purchase to read more.

Industry Statistics & Market Size
Revenue
$42bn
Annual Growth 13-18
2.1%
Forecast Growth 18-23
Profit
Employment
149,013
Businesses
22,851

Industry Threats & Opportunities

  • Industry demand is anticipated to rise as domestic air travel increases, bolstered by the growth of the US economy
  • As a result of M&A activity, industry establishments have been on the rise
  • The Car Rental industry is expected to contend with rising external competition
  • Industry Report - Industry Key Buyers Chapter

    The Car Rental industry is exposed to a moderate level of market share concentration. In 2018, the top 5 industry companies are expected to collectively just under 50.0% of annual industry revenue. Industry concentration has largely increased over the past decade, primarily as a result of a string of merger and acquisition activity among the industry's leading companies. For example, Hertz Global Holdings Inc. acquired Advantage Rent-A-Car in April 2009 (though they later divested the brand), Donlen Corporation in 2011 and Dollar Thrifty in 2012. Likewise, Avis Budget Group purchased Apex Car Rentals in 2012 as well as Payless Car Rental Inc. in July 2013, which was then the sixth biggest car rental company in North America with 120 retail locations and generating $80.0 mi...purchase to read more.

    Additional Insights for the Car Rental Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Car Rental Industry are

  • Being part of a franchising chain
  • Access to niche markets
  • Establishment of brand names
  • IBISWorld analysts also discuss how external factors such as Domestic trips by US residents and Demand from taxi and limousine services in the Car Rental industry impact industry performance..

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    What's in this report

    What is the Car Rental Industry?

    Operators in the Car Rental industry rent or lease passenger cars to customers. Car rentals typically last a short time (30 days or fewer) while leasing agreements last longer (12 months or more). The industry excludes the rental or leasing of cars with drivers or trucks.

    Industry Products
  • Leisure car rental
  • Business car rental
  • Car leasing
  • Car sharing
  • Other sales and services
  • Industry Activities
  • Passenger car rental
  • Passenger car leasing
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Domestic trips by US residents
  • Demand from taxi and limousine services
  • Per capita disposable income
  • Inbound trips by non-US residents

  • Current Performance
  • Industry landscape
  • Car sharing drives industry innovation
  • Chart: Revenue Growth

  • Industry Outlook
  • Rising competition hinders profit growth
  • Consolidation to continue
  • Table: Car Rental Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Car Rental Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Life Insurance & Annuities
  • Car Body Shops
  • Consumers

  • Key Selling Industries
  • Auto Mechanics
  • Automobile Wholesaling
  • Car & Automobile Manufacturing
  • Car Body Shops
  • SUV & Light Truck Manufacturing

  • Products & Services
  • Leisure car rental
  • Business car rental
  • Car leasing
  • Other sales and services
  • Car sharing
  • Chart: Car Rental Industry Products and Services Segmentation

  • Demand Determinants
  • The number of air travelers
  • Disposable income
  • Corporate profitability
  • Exchange rates

  • Major Markets
  • Airport customers
  • Off-airport customers
  • Car leasing
  • Car sharing
  • Chart: Major Market Segmentation for the Car Rental Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Profit
  • Purchases
  • Depreciation
  • Wages
  • Other
  • Chart: Cost Structure Benchmarking – Sector vs Car Rental

  • Basis of Competition
  • Internal competition
  • External competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Car Rental Industry

  • Industry Globalization
    Enterprise Rent-A-Car Company, Hertz Global Holdings Inc., Avis Budget Group Inc.,
  • Table: Enterprise Rent-A-Car Company - financial performance
  • Table: Hertz Global Holdings Inc. - financial performance
  • Table: Avis Budget Group Inc. - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Car Rental Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Car Rental Industry
    Includes:
  • Industry Revenue (2009-2023)
  • Industry Gross Product (2009-2023)
  • Establishments (2009-2023)
  • Businesses (2009-2023)
  • Employment (2009-2023)
  • Wages (2009-2023)
  • Domestic Trips by US Residents (2009-2023)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Table: Industry Financial Ratios
    Airport Market
  • The market for car rental services at or near airports, which is made up almost entirely of air travelers and historically is the industry's primary market.
  • Car Sharing
  • A very short-term car rental where customers pay an annual fee plus hourly rental rate to rent cars from specified locations in participating cities.
  • Concession
  • An agreement between car rental companies and airports specifying how many counters a rental company can operate at an airport.
  • Off-Airport Market
  • The market for car rental services away from airports, usually in cities, suburbs or rural areas, which includes car sharing and insurance replacements.
  • Residual Value
  • A value car rental companies receive when they sell a rental car back to a car manufacturer or a car wholesaler.
  • What Our Customers Say

    Why buy this report?

    The Car Rental Industry Research Report measures market size, analyses current and future trends, and provides an indication of market share for the industry’s largest companies. IBISWorld’s collection of industry market research reports gives you insightful, up-to-date information on the supply chains, economic drivers, and key buyers and markets for hundreds of industries.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Car Rental:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Car Rental market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Car Rental, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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