Slowdown in tourism puts brakes on UAE car rental business

Dubai: The expected slowdown in the local tourism industry is likely to put the brakes on the car rental business, which had enjoyed rapid growth in recent months.

Sam Eltibi, Middle East and North Africa executive director of Thrifty Car Rental, said a slowdown in the leisure sector, a result of the world financial meltdown, may cause a slowdown for his sector in the coming months.

"We believe there will be an impact. It is all interlinked. Our business model is 60 per cent corporate and 40 per cent leisure, so if the leisure market is down, yes we will feel the impact," Eltibi said.

According to Nigel Johnson, general manager of Hertz, car rentals rose sharply in Dubai in recent months due to the difficulty faced by expats and holidaymakers of getting taxis and public transport.

"When tourists and expatriates arrive in Dubai, the first thing they want to do is explore the city's wonders. This can be challenging as there is limited public transport at present and taxis can be hard to come by during peak periods," he said.

"We have witnessed a considerable rise in car rentals in recent months and that's partly down to the traffic problems people are enduring. More people are turning to car rental as it's an easy, hassle-free and affordable option," Johnson said.

Hotels in Dubai suffered a four per cent decline in occupancy from January to October this year compared to last year, according to research firm STR.

But Eltibi believes that it is not the time to sit back and wait for the slowdown to take hold.

"As long as projects are continuing and as long as there are tourists, we are continuing with business as usual. We can't sit back... We have to continue to make sure that we get through the tough times," he said.

The company is expanding its operation to Oman, a market Eltibi believes is emerging as a major regional tourism destination.

"The number of rental cars on the road has risen exponentially as Oman's tourism sector continues to grow," he said.