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Holiday Car Hire - UK - June 2016

OVERVIEW
What you need to know
Covered in this report
EXECUTIVE SUMMARY
Holiday car hire motors ahead
Figure 1: Forecast volume of holiday car hires abroad by UK residents, 2011-21
Falling fuel prices boost fly-drive holidays
Figure 2: Petrol cost per litre in Europe 2016, change (pence per litre) 2014-16
Online booking migration continues
Figure 3: Booking methods used for hiring last holiday car abroad, March 2016
Hertz takes market leadership
Figure 4: Holiday car hire brands used in the past three years (with company ownership in brackets), March 2016 versus December 2014
Holiday hire penetration up four points
Figure 5: Holiday car hire abroad in the past three years, March 2016 versus December 2014
Navigational assistance most popular add-on
Figure 6: Interest in booking extras for holiday car hire abroad, March 2016
Gateway to freedom
Interest in P2P car hire in destinations
Stress free, driver free holiday hire
Figure 7: Attitudes towards hiring a car on holiday abroad, March 2016
What we think
ISSUES AND INSIGHTS
Holiday car hire can position itself at the heart of the authenticity trend
The facts
The implications
Car hire brands can create an independent alternative to the growing escorted tour market
The facts
The implications
Boutique, P2P and green branding all likely to appeal to the Millennial traveller
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Overseas travel recovery boosts car hire in 2015
Further growth expected for 2016 but possible trouble on road ahead
Western Med influx increasing price pressures
But low fuel costs remain an advantage
Ageing of the driving population
The Millennial driver
New mobility services could impact holiday car hire
MARKET SIZE AND FORECAST
Holiday hire finally recovers to 2008 levels
Figure 8: Volume of holiday car hires abroad by UK residents, 2011-21
Forecast
Figure 9: Forecast volume of holiday car hires abroad by UK residents, 2011-21
MARKET BACKGROUND
UK economic growth slowing
Figure 10: UK average weekly earnings (excluding bonuses)* vs CPI inflation, percentage change year on year, June 2013-March 2016
Consumer confidence: still positive but jittery
Figure 11: Mintel consumer financial confidence index, January 2009-April 2016*
EU uncertainty affecting currency markets
Figure 12: Annual average exchange rates, GBP versus EUR and USD, 2010-15 and spot rate for May 2016
Holiday cost of living higher in 2016 but long-term trend still down
Overseas holiday revival continues
Figure 13: Overseas holiday market volume and value, 2010-15
But terrorist threat could affect confidence
Rapid independent holiday recovery is good news for car hire
Figure 14: Independent versus package overseas holiday volume, 2010-15
Holidays to Spain up five years in a row
Figure 15: Top 20 overseas holiday destinations by number of trips, 2010-15
Western Med expected to benefit from tourism troubles elsewhere
Figure 16: Top 10 independently booked overseas holiday destinations, by number of trips, 2010-15
Further problems in France but football may provide boost
Low oil prices beginning to benefit fliers…
…and holiday drivers
Figure 17: Petrol cost per litre in Europe 2016, and change 2014-15 and 2015-16
Image problems
Long-term shifts in the UK driving population
Figure 18: Average distance travelled by car/van driver in England, by age, 2002-14
Marketing to Millennials
On-demand culture could reshape future mobility in destinations
CHANNELS TO MARKET
Online booking percentage has risen 11 points in past two years
Figure 19: Booking methods used for hiring last holiday car abroad, March 2016
Potential for ad hoc hire in destination
Bookings split between direct and third party
Figure 20: Online booking methods used for hiring last holiday car abroad, March 2016
KEY PLAYERS – WHAT YOU NEED TO KNOW
Hertz becomes most popular brand
Avis, Hertz and Enterprise see European expansion
Shift to value-oriented brands
New schemes offer challenge to traditional car hire model
Prestige hires
Europcar offer bike hire
Insurance for older drivers
MARKET SHARE
Four groups control market
Figure 21: Holiday car hire brands used in the past three years (with company ownership in brackets), March 2016 versus December 2014
Figure 22: Number of holiday car hire brands used in the past three years, March 2016
Expansion being driven by budget brands
LAUNCH ACTIVITY AND INNOVATION
Disruptive models
Europcar/Ubeeqo
P2P/car-sharing
Drivy
Qwekee
Residential car share schemes
WaiveCar offers ad-funded free rental
Avis moves into wearable tech
Enterprise expands premium hires
Car/bike combos
Saga launches new insurance product for older hirers
THE CONSUMER – WHAT YOU NEED TO KNOW
City break hires
On the road
Little to choose between?
De-stressing car hire for older drivers
In-car edutainment
Freedom versus fly and flop
Driverless car potential
HOLIDAY CAR HIRE USAGE
Car hire usage up four points
Figure 23: Holiday car hire abroad in the past three years, March 2016 versus December 2014
Millennial/family biases
Figure 24: Age profile of holiday car hirers in the past three years, March 2016
Over six in ten customers are ABC1
Figure 25: Socio-economic profile of holiday car hirers in the past three years, March 2016
Car hire customers comfortably off but many are on mid-range household incomes
Figure 26: Household income profile of holiday car hirers in the past three years, March 2016
Those who visit North America, Italy and Portugal are most likely to hire a car
Figure 27: Holiday car hire usage abroad in the past three years, by destination visited, March 2016
Car adds extra dimension to beach holiday
Figure 28: Types of holiday on which a car has been hired abroad in the past three years, March 2016
Creating bespoke car tours for older affluent travellers
REASONS WHY PEOPLE CHOOSE A CAR HIRE BRAND
Price is fundamental in commoditised market
Figure 29: Factors influencing choice of holiday car hire company, March 2016
Gamifying deals for younger customers
Parents more likely to be swayed by reputation/recommendation
Hertz versus Europcar versus Avis
Figure 30: Percentage of those motivated by particular factors, by brand chosen in the past three years, March 2016
HOLIDAY CAR HIRE EXTRAS
Sat Nav and flexibility of pick-up/drop-off are popular extras
Attracting older drivers
Figure 31: Interest in booking extras for holiday car hire abroad, March 2016
Are we there yet Dad?
Car as digital detox space
Greening of holiday hire
Lap of luxury
ATTITUDES TOWARDS HOLIDAY CAR HIRE
Freedom and discovery are key messages
Selling the destination through the car
Virtual road trips
Figure 32: Attitudes towards hiring a car on holiday abroad, March 2016
P2P potential
Figure 33: Attitudes towards hiring a car on holiday abroad, MARCH 2016
Driverless car could offer stress-free alternative
APPENDIX
Definition
Abbreviations

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