Tourism Vehicle Rental Market Size - By Vehicle, By Rental Duration, By Booking Channel, By Pricing Model, By Service, By End Use, Analysis, Share, Growth Forecast, 2024 - 2032

Tourism Vehicle Rental Market Size

The global tourism vehicle rental market size was valued at USD 81.5 billion in 2023 and is projected to grow at a CAGR of 8.3% between 2024 and 2032. According to the UN Tourism, an estimated 790 million tourists travelling internationally in the first seven months of 2024, indicating a growth of around 11% than in 2023. This rising travel trend is significantly driving demand for the market by reshaping how people approach their travel experiences. 
 

Travelers are increasingly seeking personalized and flexible experiences, moving away from traditional structured tour packages. This shift has led to a higher demand for vehicle rentals, as tourists value the freedom to create their own itineraries.
 

For instance, in September 2024, Uber launched a new car rental service, aimed at providing travelers with a more flexible and convenient way to access vehicles during their trips. This initiative allows users to rent cars directly through the Uber app, catering to both tourists and business travelers. Users can rent vehicles for periods ranging from 1 to 15 days, allowing for tailored rental experiences based on individual needs. The service includes a variety of vehicle types, from SUVs to vans accommodating larger groups.
 

The tourism vehicle rental market is experiencing increased demand also due to the importance of flexibility and convenience in modern travel. Today's tourists prefer personalized and adaptable travel experiences. Renting a vehicle offers travelers the freedom to customize their journeys, unlike traditional travel options with fixed itineraries. This allows tourists to select their own routes, determine the duration of stays at various destinations, and explore less accessible locations that may not be included in standard tour packages.
 

Tourism Vehicle Rental Market Trends

The tourism vehicle rental industry is undergoing significant changes that are influencing travel and transportation. A major trend is the rising demand for environmentally friendly travel options. As travelers become more aware of environmental issues, they are increasingly seeking to rent electric and hybrid vehicles. In response, rental companies are adding more eco-friendly vehicles to their fleets. This change meets customer preferences and improves the rental companies' reputation as socially responsible businesses. The shift towards sustainable options reflects the values of a generation that considers environmental impact in their travel decisions.
 

For instance, in July 2023, in Goa, India, the Goa government announced that all new rental cars and bikes must be electric starting from January 2024. This decision, made by the Chief Minister of the state, during the G20 summit's Energy Transitions Working Group Meeting, aims to promote environmentally friendly transportation in the state, which heavily relies on tourism.
 

The recreational vehicle (RV) and camper van rental market is experiencing a shift towards longer-term rentals. This trend is largely driven by the increase in remote work opportunities and the growing popularity of the "digital nomad" lifestyle. As more individuals choose to travel for extended periods while maintaining their work responsibilities, the demand for long-term RV and camper van rentals has risen. This change reflects a broader societal movement that places greater emphasis on work-life balance and incorporates travel into everyday life.
 

The maintenance and management of vehicles play a crucial role in the tourism vehicle rental market. These factors can significantly affect the demand for rental services as they directly influence the safety and reliability of the vehicles offered. Travelers often express concerns about the condition of rental vehicles, as inadequately maintained vehicles can pose safety risks and potentially cause inconvenient breakdowns during their trips.
 

Rental companies with a reputation for offering poorly serviced or inspected vehicles may experience a decrease in customer interest. Potential renters may be hesitant to use services where they perceive a risk of mechanical failures, tire issues, or other maintenance-related problems. This hesitation is particularly pronounced when travelers consider driving in unfamiliar or remote areas.
 

Tourism Vehicle Rental Market Analysis

Based on rental duration, the market is segmented into short term and long-term periods. In 2023, the short-term rental segment accounted for over 73% of the market share and is expected to exceed USD 110 billion by 2032. The tourism vehicle rental market is experiencing significant demand for short-term rentals due to several factors that match modern travelers' needs. Short-term rentals offer flexibility, allowing tourists to rent vehicles for brief periods, such as a day or a few days, to suit their specific travel plans. This option also supports the growing popularity of weekend getaways and impromptu trips.
 

As more individuals seek brief escapes from their routines, the ease of renting a vehicle for a short duration aligns well with this trend. Short-term rentals accommodate various travel purposes, including family road trips, city explorations, or nature adventures, enabling travelers to maximize their limited time away.
 

Based on the booking channel, the tourism vehicle rental market is divided into online and offline. The online segment held around 76% of the market share in 2023. This dominance is attributed to its convenience, accessibility, and alignment with consumer preferences for digital interactions. Online booking allows travelers to make reservations at any time and from any location, eliminating the need to visit rental offices or make phone calls during specific business hours. This round-the-clock availability caters to the modern consumer's fast-paced lifestyle, offering a quick and efficient solution for travel-related needs.
 

Also, online travel platforms frequently offer special deals and discounts not found through conventional booking methods. These financial advantages motivate travelers to use online channels, strengthening their market presence. Furthermore, the ease of managing reservations, including making changes or cancellations through user-friendly interfaces, enhances the appeal of online booking systems.
 

U.S. tourism vehicle rental market accounted for 74% of the revenue share in 2023 and is expected to exceed USD 40 billion by 2032. The country's diverse landscape, which includes famous cities, national parks, scenic routes, and cultural sites, attracts millions of tourists annually. Many visitors prefer renting vehicles for the flexibility to explore these varied attractions.
 

The American culture of car ownership and road travel also contributes to the market's strength. This cultural preference, along with the popularity of road trips and a lifestyle that values mobility, creates a strong demand for rental vehicles among both domestic and international travelers.
 

For instance, in April 2024, SIXT has announced the opening of a new car rental branch at Kona International Airport (KOA) in Hawaii. This expansion aims to enhance travel options for visitors to the Big Island, providing them with easy access to a diverse fleet of vehicles. The SIXT branch will offer a wide range of vehicles, including compact cars, SUVs, and luxury options, catering to various customer needs and preferences.
 

Europe's tourism vehicle rental market is experiencing increased demand due to several factors. Rising travel activity, changing consumer preferences for flexible transportation options, and the region's diverse attractions contribute to this growth. Europe's well-developed highway system, scenic routes, and varied landscapes make vehicle rentals appealing to travelers who wish to customize their trips. This option allows tourists to explore beyond major urban centers, visiting rural areas, historical sites, and lesser-known locations at their convenience, meeting the increasing desire for personalized travel experiences.
 

The tourism vehicle rental market in Asia is experiencing significant growth due to several factors that align with changing travel preferences of both local and foreign tourists. The expanding middle class in countries such as China, India, and various Southeast Asian nations is a key driver of this trend.
 

As disposable income increases, more people are seeking to explore diverse destinations, with vehicle rentals providing the flexibility to travel at their own pace. This shift in demographics has led to a growing interest in road trips and customized travel experiences. Tourists are increasingly renting vehicles to visit less-frequented attractions, rural areas, and scenic routes that may be difficult to access via public transportation.
 

Tourism Vehicle Rental Market Share

Hertz, Enterprise Rent-a-Car, and Getaround collectively held a substantial market share of over 28% in the tourism vehicle rental industry in 2023. Hertz, Enterprise Rent-A-Car, and Getaround have implemented several strategies to increase their market share in the tourism vehicle rental industry. These companies have expanded their vehicle fleets to include electric and hybrid options, improved their online booking platforms for better user experiences, and offered flexible rental terms to meet various traveller needs.
 

They have also focused on enhancing customer engagement through loyalty programs, personalized services, and targeted local marketing efforts. Furthermore, these companies have formed partnerships with travel agencies and integrated with ride-sharing platforms to reach a broader customer base in the competitive rental market.
 

Tourism Vehicle Rental Market Companies

Major players operating in the tourism vehicle rental industry are:

• Alamo
• Avis
• Booking.com
• Budget Rent A Car
• CarTrawler
• Cruise America
• Dollar Rent A Car
• Enterprise Rent-A-Car
• Europcar
• Expedia
   

Tourism Vehicle Rental Industry News

• In April 2024, the Rajasthan Tourism Bureau expanded its services to offer one-way car rentals, allowing tourists greater flexibility in their travel plans across the state. This initiative aims to enhance the overall visitor experience by providing more convenient transportation options
   
• In January 2024, Cycle & Carriage opened a new myCarriage car rental branch at Changi Airport Terminal 3, Singapore, marking its entry into the tourist segment and enhancing services for travelers. This expansion comes in response to the rising demand for car rentals as travel resumes
   

The tourism vehicle rental market research report includes in-depth coverage of the industry with estimates & forecasts in terms of revenue ($ Mn/Bn) from 2021 to 2032, for the following segments:

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Market, By Vehicle

• Cars
• Recreational vehicles
• Motorcycle
• Bicycle
• Specialty vehicles

Market, By Rental Duration

• Short term
• Long term

Market, By Booking Channel

• Online
• Offline

Market, By Pricing Model

• Daily
• Weekly
• Monthly
• Mileage based pricing

Market, By Service

• Self-driven
• Chauffeur-driven

Market, By End Use

• Leisure travelers
• Business travelers
• Tour operators

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
  • Nordics
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • ANZ
  • Southeast Asia
• Latin America
  • Brazil
  • Mexico
  • Argentina
• MEA
  • UAE
  • Saudi Arabia
  • South Africa