Market Trends of Brazil Vehicle Rental Industry
Leisure/Tourism is Expected to Grow at the Highest Rate
Brazil is considered one of the top destinations for tourism, and its tourism industry is increasing steadily and is expected to grow exponentially.
Investments made by the government in developing tourism across the country contribute to increasing car rental rates in Brazil. For instance, according to the Brazilian Ministry of Tourism, spending by international tourists in Brazil reached USD 170 million in 2023, the highest in the last 25 years.
International arrivals are also rising every year, combined with the rise in domestic flights. Over 4 million foreign tourists visited Brazil in the first eight months of 2023, double the number in 2022, with the number of domestic flights growing by 33.7%, resulting in increased visitors and tourism activity.
Many business travelers also return for leisure in one of the country’s leading tourist destinations, like Rio or São Paulo. With the rise of new travel startups, online travel agencies are looking to innovate the industry.
With the rise in tourism and exponential growth in airport travelers, car rental services play a vital role in contributing to a smooth travel experience. Car rental services offer tourists the freedom to explore their chosen destinations at their own pace and are used for airport pickups and drops.
In June 2023, Brazilian car rental company Localiza opened a new tab by launching a follow-on share offering aimed at expanding its car fleet and service network. Thus, such developments are contributing to segment growth.
Online Booking is Dominating the Market
Brazil has a significantly high number of internet users due to the availability of high-speed internet at affordable prices. According to the International Trade Administration, by 2025, Brazil will be among the five largest markets in the world for smartphones, with approximately 200 million connections.
With the growth in smartphone penetration, travelers are shifting to online car booking services, making car rental companies shift their business models from brick-and-mortar structures to online business models to provide their customers with an easy and hassle-free experience.
The advancement of car rental services technology offers extra features for real-time monitoring of a rental vehicle's operation and performance. Such features significantly benefit fleet managers and make rental services more efficient and effective.
The popularity of online¬ car rental booking has caused many rental age¬ncies to offer exclusive¬ deals and discounts for those who book via the internet. As a result, more travelers are opting to rese¬rve their rentals online¬ instead of choosing physical agencies, causing a surge¬ in demand for this convenient me¬thod.
In March 2023, Sao Paulo launched the MobiazapSP app ride service to compete directly with Uber, Didi, Chuxing 99, and other platforms.
Advancements in technology, such as virtual reality and artificial intelligence, may also play a role in the future of car rental booking, thus having a positive impact on the market segment.
