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How did the coronavirus affect the car rental and rental market in Russia

In the past 2020, there was a difficult situation in the Russian economy due to the spread of the coronavirus pandemic: it also touched on the car rental market. But at the moment, there is a recovery and some growth in this service sector. This is also facilitated by the development of domestic tourism in the country.
It can be concluded that the rental industry in Russia has a good potential, as it is only becoming popular among the residents of our country. It is mainly used by the population of large cities and resort regions like the Crimea and Kaliningrad. In this article, we will analyze the state of the market and analyze its main trends, as well as give recommendations on which companies are best to contact for car rental.

Development of the Russian car rental market
Experts believe that the market in Russia is at the nascent stage, so the industry is poorly regulated. For example, there is no clear segmentation of the cars that are used for rent, since the client can pay for a premium car, and get an economy as a result.
Rental services are mainly concentrated in Moscow and St. Petersburg-the share of companies in these megacities is up to 80% of the total market. And the main customers are tourists, including foreigners. This is especially evident in such resort cities as Kaliningrad, Sochi, etc. The structure of consumers indicated below throughout Russia (data for 2018) shows that the category of vacationers is in second place after people who do not have their own car.
Structure of car rental clients
Structure of car rental clients

If we compare Russia with Western countries, it should be noted that this niche is quite developed in the United States and Europe, for example, there are subscription services for long-term car rental, which make it possible to own them for at least one year. In our country, rent is generally common from a few days to one month.

Carsharing in Russia
We could not help but mention such a direction as carsharing, car rental for up to 1 day. It has just started its way in Russia, but some citizens are already using it to the full. Experts of the agency "AUTOSTAT" and Auto Mail.ru we conducted a survey, where we found out what reasons make Russians take cars for a short period from landlords. The result of the study is shown in the diagram below. I think, thanks to this, you can create a portrait of a typical carsharing user. As you can see, this type of rental has its advantages. But at the moment, because of the pandemic, he is going through difficult times.
Reasons for using carsharing in Russia
Reasons for using carsharing in Russia
The collapse of the car rental giant during the virus pandemic
Meanwhile, back in May last year, the American company Hertz, the world market leader, could not get support from the country's authorities, so it decided to start bankruptcy proceedings without waiting for such actions from its creditors.
But experts believe that Hertz had problems even before the start of the pandemic, and the coronavirus finished it off completely. The famous brand tried to find money, but it was not possible to do this until May 22, 2020. Already before that, the company cut 10 thousand employees around the world.

Car rental in Kaliningrad in 2021
Despite the coronavirus pandemic, the Kaliningrad region continues to attract many tourists from Russia, so there was no big decline in demand for car rental here. But the guests of the region are interested in the question, which is better to choose-carsharing or classic car rental?
First, you need to understand whether you really need carsharing. If you are planning short trips around Kaliningrad, then of course you should take a car for a short period of time. But you need to know that car sharing has its drawbacks, for example, restrictions on the zones of operation, and some companies require the user to leave the car in a certain place, and this is quite inconvenient.
However, practice shows that tourists in Kaliningrad and the region will need a car for a long time so that they can study the main attractions of the region in detail. Therefore, it is worth renting a car for at least a few days. In addition, rental companies can provide a large selection of cars for every taste, unlike car-sharing services.
When coming to Kaliningrad, choose the leader of car rental, the company Amigo - https://amigorent.ru , which has been operating on the market for more than 12 years. And it's not just words - this is evidenced by more than a thousand positive feedback ratings in Google and other services. Amigo car rental values its reputation and provides services both for long-term rental and car sharing. Therefore, it is not surprising that the company's motto is " The client is our friend!". This is what helps Amigo to remain a leading player in the car rental market in the Kaliningrad region for a long time.

Tourist flow in Russia
First of all, we are interested in domestic tourism, given the closed borders as a result of the pandemic.
Experts say that this type of travel gave an increase of up to 15 % in 2019, and the leaders in visiting were the Krasnodar Territory and the Crimea.
But what data can be given for the past 2020? Experts report the following: tourism within Russia fell by 40%, despite the fact that those who went abroad decided to rest in our country. If in 2019 there were 68 million visits, then next year the figure was only 40 million.
The excursion direction was particularly affected, as many museums, theaters and other facilities were closed during the pandemic – here the drop reaches up to 60% compared to 2019.

Tourist flow in the Kaliningrad region
In 2019, about 1.74 million tourists visited the region, which exceeded the previous figure by 14%. It is also significant that 2018 was the year of the World Cup, so a good potential was created for the tourist flow.
According to experts, the region is trying to develop destinations with major Russian cities with which air flights are established. At the same time, the region focuses on the autumn and winter season.
The Kaliningrad region was also visited by foreign guests – that year their number reached about 200 thousand people. It can be concluded that before the pandemic, Kaliningrad was successfully developing from the point of view of tourism.
As for 2020, officials reported that the number of visits amounted to 1.2 million tourists – this is 30% less than the year before last. The reason for the decline is due to the fact that from April to June there was a ban on tourist trips to the region. After the late opening of the season, the infrastructure failed to completely adapt to the needs of tourists. At the same time, the portrait of vacationers is a family aged 35-40 years and their children, that is, the target audience of the car rental market.

Forecasts for tourism in 2021
ATOR analysts gave three main scenarios according to which the tourist market will develop this year. We are most interested in information about domestic tourism.
With a pessimistic option, the borders will remain closed, so vacationers will continue to focus on holidays within the country.
If we talk about the medium-optimistic scenario, then in 2021 the borders will gradually open, but domestic tourism will remain the predominant direction for vacationers, although its volume will not reach the pre-pandemic indicators.
As for the optimistic option, according to it, the countries will remove most of the restrictions and restore air traffic. At the same time, the volume of tourist flow will reach the indicators of 2017 and for domestic tourism it will amount to about 50 million visits.

Conclusion
Recently, market leaders reported that recently the demand for long-term car rental has increased by 40%. The reasons for this fact are related to the development of domestic tourism and the introduction of remote work in 2020. Of course, this factor will benefit companies, as it reduces the likelihood of downtime of their own fleet. At the same time, analysts of the Rosselkhoznadzor indicated that the number of carsharing transactions, on the contrary, fell by 32%.
As you can see, the market for long-term car rental has a good potential for growth, and thanks to this, companies will strive for more efficient activities.
Author: Andrey Sorokin, owner of Amigo car rental