Table of Contents
Executive Summary
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- Impact of COVID-19 on holiday car hire
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- 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
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- 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
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- Figure 3: Holiday car hire, November 2020
- Convenience and cost-effectiveness drive demand for car hire
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- Figure 4: Main reasons for hiring a car during a holiday abroad, November 2020
- Selection of car hire supplier primarily driven by price
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- 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
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- Figure 6: Self-drive holidays abroad, November 2020
- The decision to self-drive to an overseas holiday destination is primarily linked to convenience
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- 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
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- 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
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- 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
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- Figure 10: Self-drive touring holidays taken vs interest in taking one in the future, November 2020
Issues and Insights
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- 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
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- 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
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- COVID-19 travel restrictions hindering holiday car hire market recovery
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- 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
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- 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
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- Figure 13: Forecast of total overseas car hire volume, 2015-25 (prepared on 26 March 2021)
- Market drivers and assumptions
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- Figure 14: Key drivers affecting Mintel’s market forecast, 2015-25 (prepared on 26 March 2021)
- Learnings from the last recession
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- Figure 15: Total overseas car hire volume, 2008-15*
- Forecast methodology
Market Drivers
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- 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
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- 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
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- Figure 17: Financial confidence in the year ahead, December 2019-February 2021
- After several years of weakness, Pound is strengthening
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- 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
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- 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
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- 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
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- 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
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- 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
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- 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
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- Uncertainty restricting pent-up demand for main holiday bookings
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- Figure 20: Booking intentions for main holiday, 21 January-12 March 2021
- More opting for a staycation as their main 2021 holiday
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- 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
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- Figure 22: Consumer concern about COVID-19, February 2020-March 2021
Holiday Car Hire
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- Just under a third of UK holidaymakers have hired a car abroad
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- 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
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- Figure 24: Holiday car hire, by age, November 2020
Main Reasons for Car Hire
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- Car hire simplifies the transport needs for overseas holidaymakers
- Many travellers turn to car hire if it is cheaper than other options
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- Figure 25: Main reasons for hiring a car during a holiday abroad, November 2020
Key Factors Driving Choice of Car Hire Provider
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- 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
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- Figure 26: Most important factors influencing the choice of car hire provider, November 2020
Self-drive Holidays Abroad from the UK
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- One in four have driven from the UK to an overseas holiday destination
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- 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
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- 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
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- Pent-up demand for car hire waiting to be released
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- 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
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- 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
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- 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
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- 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
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- 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
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- Figure 32: Self-drive touring holidays taken vs interest in taking one in the future, November 2020
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
Appendix – Market Size and Forecast
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- Market forecast
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- Figure 33: Forecast of total overseas car hire volume, 20-2025
- Forecast methodology
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