Car Rentals Are Way Down Despite Travel Industry Rebound – Skift Travel Health Index

The car rental sector is witnessing a slowdown after the pandemic boom, declining 12% over May 2023. While the travel industry as a whole rebounds, car rentals appear to be the weakest sector, standing at an index of 88, according the latest Skift Travel Health Index: May 2024 Highlights.

Breaking down the car rental index into searches, bookings, and key performance indicators reveals that while travelers have been searching for car rentals, the actual booking volumes and performance levels are declining. 

Price Sensitivity is Driving the Index Down

The decline in car rentals can be linked to rising prices. The May 2024 Highlights show a strong correlation between transaction values and rental volumes. In countries where rental car prices have increased significantly over the past year, booking volumes have dropped. This suggests a price-sensitive market, where travelers are more likely to rent cars when deals are available.

The latest Travel Health Index report shares further insights on the domestic and inbound car rental market.

The Travel Industry is Shifting Gears

The slowdown in car rentals could signal a post-pandemic shift in travel behavior. Travelers might be returning to public transportation options in many destinations due to cost concerns.

While car rentals face some headwinds, the overall travel industry is on the upswing, gaining 3% over May 2023. The industry is transitioning from a recovery phase to showcase stable, moderate growth, moving beyond unsustainable double-digit growth levels.

Read our latest report, Skift Travel Health Index: May 2024 Highlights and the Travel Health Index dashboard for further travel insights.