What you need to know
Mintel’s consumer research shows that the proportion of holidaymakers hiring cars while abroad has been in decline over the past year. Despite this, the market is still experiencing volume growth, due to the increase in the number of overseas holidays being taken overall. However, growth is slowing; Mintel expects the volume of cars hired by British holidaymakers abroad to grow by 2% in 2018 (compared to annual increases of 5.5% in 2016 and 3% in 2017), bringing the total to approximately 3.53 million hires. At the time of writing, the cost of holidaying in Europe is still more expensive due to the weak Pound. This will have curbed spending somewhat, hitting ancillary holiday products such as car hire.
On a more positive note, the Pound has recovered against the US Dollar which is good news for providers considering the US is a key market for holiday car hires. Consumer confidence is also rising; wages have finally started to outpace inflation and unemployment is at its lowest level since 1975.
Consumer budgets play a major role in this market, with cost of rentals being the most important factor for the majority (64%) when selecting a vehicle. This means that electric cars are an attractive option for price conscious consumers; 60% of car renters say they would choose an electric car over a petrol/diesel fuelled one if it saved them money.
In terms of attitudes towards holiday car hire, Mintel’s research finds that UK consumers are highly brand conscious. The vast majority of holiday car renters say they would only rent cars abroad from well-known brands, while most say they trust UK-based car rental companies more than ones abroad.
