The United States car rental market includes renting or hiring cars or vehicles for a limited period at an agreed upon price. Car rental services provide vehicles across various categories including economy, compact, intermediate, standard, full-size, premium, luxury, and specialty vehicles. These rental services meet the diverse mobility needs of customers such as daily commutation, leisure travel, business trips, and others. Car rental agencies offer various ancillary services including upgrades, additional or young drivers, one-way rentals, specialty vehicles, and insurance. The growing trend of shared and connected mobility has prompted car rental operators to offer innovative services including rental by the hour and self-drive car sharing.
The United States Car Rental Market is estimated to be valued at USD 35.26 Bn in 2024 and is expected to reach USD 51.12 Bn by 2031, growing at a CAGR of 5.5% from 2024 to 2031.
Key players operating in the United States car rental market are Hertz Global Holdings, Enterprise Holdings, Avis Budget Group, Europcar, and SIXT.
Key Opportunities - Growth in business and leisure travel, rising trend of shared and connected mobility services, and increasing disposable income are expected to present lucrative opportunities for market players over the forecast period.
Global Expansion - Leading car rental companies are focusing on expanding their global United States Car Rental Market footprint through mergers and acquisitions to enhance their service offerings and penetrate new regions. For instance, Hertz acquired Dollar Thrifty in 2012 to strengthen its international presence.
Market DriversIncreased business and leisure travel is a major driver for the United States car rental market. According to U.S. Travel Association, domestic business trips are expected to increase by 25% from 2021 levels to reach over 1 billion trips annually by 2024. Further, the recovery of the leisure travel industry post-COVID and rise in discretionary spending on leisure activities are fueling the demand for rental cars. Additionally, favorable demographics such as growing millennial workforce and rising disposable incomes are contributing to the growth of the market.
PEST Analysis
Political: The car rental industry in the United States is regulated by federal and state laws. Regulations like vehicle safety and emissions standards directly impact automakers and thus car rentals businesses.
Economic: Economic factors such as GDP growth, disposable income levels, and unemployment rates influence consumer demands for rental cars. During economic slowdowns, leisure and business travel declines, reducing demand for rented vehicles in the country.
Social: Changing demographics and lifestyle trends shape car rental needs. Younger consumers increasingly prefer rental cars over ownership. On-demand mobility services also affect long-term ownership trends, benefitting rental businesses.
Technological: Technologies supporting smart mobility solutions are gaining traction. Connected and autonomous vehicles will modernize fleet offerings and user experiences over the long-run. Increased digitization is also essential for efficient fleet management and online bookings.The United States car rental market is concentrated in value terms across major cities and their surrounding areas which see significant business and leisure travel volumes. States like California, Florida, New York and Texas account for the largest shares. California leads as the highest generating state with major airports in Los Angeles and San Francisco attracting large rental volumes. Florida is another top market owing to its popularity as a tourist destination especially in Miami and Orlando.
The western region of the United States housing dynamic markets of California, Nevada and Arizona has emerged as the fastest growing for car rentals. Sustained economic and population expansion in these states has fueled travel and accordingly rental car demand. Cities like Las Vegas, Phoenix, Los Angeles benefit from being hubs for both business and leisure tourism witnessing steady rental vehicle growth in recent times. Rising international visitor inflows into the western U.S. also support the region's rental sector uptrend.
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Ravina Pandya, Content Writer, has a strong foothold in the market research industry. She specializes in writing well-researched articles from different industries, including food and beverages, information and technology, healthcare, chemical and materials, etc. (https://www.linkedin.com/in/ravina-pandya-1a3984191)
