Car Rental in Canada Industry Market Research Report from IBISWorld Has Been Updated
New York, NY (PRWEB) April 05, 2014 -- The global recession put the brakes on the Car Rental industry, but rental agencies have slowly shifted gears as travel demand increased. According to IBISWorld Industry Analyst Andy Brennan, “Air travelers, the industry's primary revenue source, were not using industry services due to the economic uncertainty, slow income growth, rising unemployment and tighter corporate travel budgets during the recession.” In response, operators cut expenses and searched for revenue streams aside from airports. However, air travel began to recover from 2010 onward, and improvements in domestic trips by Canadian residents have driven the industry. The economy's recovery has also led to increased consumer confidence, which has translated into greater spending. Also, business expenditure has been spurred by a strong rise in corporate profit, which has increased at an impressive annualized rate of 9.3% per year on average over the past five years. As a result, industry revenue is expected to increase at an annualized 3.0% on average to reach $4.1 billion in the five years to 2014, and includes a jump of 1.3% in 2014.
Over the past five years the industry has continued to consolidate, leaving three dominant global brands: Enterprise, Hertz and Avis. Consolidation is evidenced by a decline in the number of industry enterprises, which dropped an annualized 1.0% to 714 operators over the five years to 2014. The industry also experienced acquisitions, with the most notable occurring in 2012 when Hertz obtained Dollar Thrifty in an attempt to gain market share in the price-oriented leisure travel market. However, the Federal Trade Commission made Hertz sell its Advantage brand, which was purchased in 2009, as part of the agreement. Nevertheless, the independent Advantage filed for bankruptcy in 2013 and was sold off to private equity group Catalyst Capital Group in early 2014.
The industry's recovery is expected to continue over the next five years, as demand is expected to increase due to growing domestic travel rates, bolstered by a recovering Canadian economy. “In addition to escalating air travel, growth will be underpinned by rising personal income and generous corporate travel budgets, with corporate profit increasing an annualized 5.0% through 2019,” says Brennan. Consequently, the industry revenue is forecast to grow over the five years to 2019.
The Car Rental industry's concentration has increased during the five years to 2014, which is attributable to merger and acquisition activity by the industry's major companies. For example, Enterprise Rent-A-Car acquired Vanguard Car Rental (which operated National and Alamo) in mid-2007, and Hertz acquired Advantage Rent a Car in April 2009 (although it later divested the brand) and Dollar Thrifty in 2012.
For more information, visit IBISWorld’s Car Rental in Canada industry report page.
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IBISWorld industry Report Key Topics
Operators in the Car Rental industry rent and lease passenger cars without drivers, which are often used for short periods of time. Car rental agencies provide hearses, limousines and passenger cars, including automobiles, minivans and sport-utility vehicles (SUVs). Car rentals typically last a short time, that is to say 30 days or fewer, while leasing agreements are typically longer, or 12 months or more. The industry excludes the rental or leasing of cars with drivers.
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Globalization & Trade
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About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US and Canadian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.
Gavin Smith, IBISWorld, +1 (310) 866-5042, [email protected]
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