Car-hire companies are enjoying increases in bookings from the inbound market, which industry representatives believe is fuelled by the weak rand.
In the first four months of the year, Avis witnessed in excess of 20% growth in the inbound leisure segment, along with a 14% rise in car-rental day volume and over 6% in rate. According to Lance Smith, Executive Sales, all the major generating markets from Europe and North America showed positive growth.
First Car Rental sings a similar tune. Melissa Storey, Executive Head: Strategy, Development and Marketing, comments: “The inbound market has grown tremendously in the past few months, year on year, but it isn’t surprising considering the state of our rand. Travel to South Africa as a long-haul destination is not inexpensive as such, but once a visitor arrives, the cost of transportation, accommodation and dining in South Africa is incredibly cheap without compromising on a very high standard.”
“The industry has seen double-digit growth on rentals and, we, as First Car Rental, have been fortunate enough to far surpass the industry growth without compromising on price,” she continues. All the countries that the car-hire company focuses on have shown similar improvement.
“Unfortunately, the average rental days have not kept pace with the rental growth, indicating shorter stays, as well as international brokers playing in the domestic space online,” she says.
Thrifty Car Rentals reports that its highest growth is coming from the corporate segment, followed by inbound bookings. Fiona Angelico, Global and National Sales and Marketing Manager, also says the increase in inbound is attributed to the performance of the local currency.
“Our online partners are providing strong, steady growth,” says Angelico. “Travellers have found comfort in booking their travel requirements online.” Online players also spend money promoting their sites, ensuring optimised placements in web searches, she points out.
All three companies have seen increases in bookings from China, albeit off a small base. Smith says the main reason for this growth is the government’s easing of visa restrictions, while Angelico credits the work done by SA Tourism.
The development is interesting as it could point to a growth in FIT in a predominantly group leisure market. Smith holds the view that China is an emerging key source market for car rental and “the future of Chinese FIT travel will grow as our businesses in North America, Europe and Australia have seen”.
Bradley Brouwer, SA Tourism President: Asia-Pacific, says Chinese arrivals, including Hong Kong, totalled 31 610 between January and March 2016, an increase of 65.1% over 2015. The statistics exclude transit tourists.
China’s FIT industry, he says, has developed rapidly in the last eight years. He refers to the 2015 Chinese Free Itinerary Travel Market Report, jointly released by Baidu Big Data Analysis and Baidu Travel, which indicates that in 2015, 47.7% of Chinese online travellers were inclined to FIT, 51% of them to overseas destinations. This represented 6% growth compared with 2014.
According to a professional tourism research survey conducted by SA Tourism, authentic travel experiences are very important to Chinese tourists. Chinese consumers like to receive first-hand experiences by visiting iconic attractions and interacting with locals for a better understanding of indigenous cultures and their way of life. FIT offers the flexibility for such experiences.
Brouwer says acceptance of the Chinese UnionPay credit card, and provision of GPS navigation systems in Chinese, would give car-rental companies a competitive edge.
