In addition to escalating air travel, growth will be underpinned by rising personal income and generous corporate travel budgets.
New York, NY (PRWEB) April 02, 2015
The global recession put the brakes on the Car Rental industry, but rental agencies have since shifted gears as travel demand increased. Air travellers, the industry's primary revenue source, used industry services less due to economic uncertainty, slow income growth, rising unemployment and tighter corporate travel budgets. According to IBISWorld Industry Analyst David Witter, “In response, operators cut expenses and searched for revenue streams aside from airports. However, air travel began to recover in 2010, and an increase in domestic trips by Canadian residents has driven the industry.” The economy's recovery has also led to increased consumer confidence, which has translated into greater spending. Additionally, business expenditure has been spurred by greater corporate profit. As a result, industry revenue is expected to increase 3.1% per year on average to reach $4.1 billion in the five years to 2015, including a jump of 0.9% in 2015.
Over the past five years the industry has continued to consolidate, leaving three dominant global brands: Enterprise, Hertz and Avis. The industry experienced several acquisitions over the period, the most notable of which occurred in 2012 when Hertz obtained Dollar Thrifty in an attempt to gain market share in the price-oriented leisure travel market. However, as part of the agreement, the US Federal Trade Commission required Hertz to sell its Advantage brand, which it had purchased in 2009. 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 growth is projected to continue over the next five years, as demand is expected to increase due to growing domestic travel rates, bolstered by an expanding Canadian economy,” says Witter. “In addition to escalating air travel, growth will be underpinned by rising personal income and generous corporate travel budgets, with corporate profit projected to increase steadily through 2020.”
For more information, visit IBISWorld’s Car Rental in Canada industry report page.
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IBISWorld industry Report Key Topics
Operators in this 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 30 days or fewer, while leasing agreements typically last 12 months or longer. The industry excludes the rental or leasing of cars with drivers.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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