Why car travel is more relevant than ever
While COVID declines and the world strives to get back to some semblance of “normal”, we’re very excited about what the near future holds for Turo hosts. Demand is already starting to surge in many markets, and our forecast indicates that it will continue to rise as pent-up demand for travel, and particularly car travel, realizes itself as people shake off the winter blues and confidence in travel continues to strengthen.
Here are a few reasons why we’re looking forward to a blossoming spring and beyond, and why hosts may want to consider building their Turo businesses to capitalize on the spring-summer season.
Insight 1: According to Google, interest in “car rental” is moving up and to the right
Search trends on Google indicate that searches for “car rental” in the US are gaining speed, especially in the last two months as case numbers and associated restrictions recede. As more people get vaccinated, the weather continues to warm, and the floodgates open on the tremendous pent-up demand to travel, we anticipate this trend to continue to rise steeply as people hit the road hard this spring and summer, compounding the usual summer peak season.
Given the extraordinary pent-up demand for travel, the extraordinary pent-up buying power stimulated by a rebounding job market and government-funded stimulus money (as the New York Times recently put it, “consumers are sitting on a trillion-dollar mountain of cash, a result of months of lockdown-induced saving and successive rounds of stimulus payments”*), and, tempered with a continued cautiousness around being in densely populated environments, car travel promises to scratch a lot of the itches of post-pandemic society.
The Times cites Ellen Zentner, chief US economist for Morgan Stanley: “There will be this big boom as pent-up demand comes through and the economy is opening. There is an awful lot of buying power that we’ve transferred to households to fuel that pent-up demand.”* While Turo hosts are decidedly way different (and way better!) than rental car companies, the opportunity to capitalize on the demand for cars and differentiate on exceptional experience can be very enticing for business-building-minded Turo hosts
Insight 2: Private cars are still the safest and most in-demand form of travel
Late last year, McKinsey analyzed how the mobility landscape has shifted due to the pandemic. “Consumers are intensely focused on health and have altered many long-standing habits and preferences to avoid infection… many passengers favor transport modes perceived as safer and more hygienic. Suddenly, private cars are in and shared rides seem to be out.”** While consumers have traditionally focused on time to destination, cost, and convenience when considering their travel plans, they now cite reducing the risk of infection as their major consideration.
Additionally, Forbes recently reported that “the US is experiencing a major rental car shortage that has been driven by the pandemic”, which is driving up prices to astronomical levels (as much as $700 per day for an SUV!) from corporate car rental agencies. “But with people getting vaccinated in record numbers and travel starting to pick back up,” the article goes on, “the industry hasn’t been able to keep up with the demand in 2021 — and it has all added up to a pretty grim situation for travelers, with sky-high prices and no inventory… Americans are taking road trips in record numbers, driving instead of flying, renting cars instead of taking taxis and Ubers.”***
With the surge in demand for cars, Turo hosts have one of the hottest commodities on the market and a unique opportunity to stand out from the competition by pricing competitively.
Insight 3: Travel will be closer to home, and more meaningful
Airbnb CEO Brian Chesky recently released a statement speculating on 2021 travel trends, where he echoes industry leaders in forecasting a surge in travel as we emerge from lockdown. He backs his hypotheses up with data from a recent travel survey of Airbnb guests, where they discovered that “56% [of respondents] prefer a domestic or local destination versus just 21% who want to visit someplace international and farther away. One in five want their destination to be within driving distance of home. Travel by car is the only means of travel that draws majority interest, beating air travel by 17 points.”**** We project local vacationers looking to skip town as a major source of demand for Turo hosts this spring and summer, in addition to more proactive domestic travelers flying in from around the US.
While the 2021 approach to travel is largely a dip-your-toe-in-the-water-type approach for most consumers, the perspective shift and subsequent profound appreciation of travel, of movement, of connection-at-a-distance has changed the travel industry. It’s more collaborative, humble, and intentional than it’s ever been, giving Turo hosts an outstanding opportunity to differentiate their businesses from alternative options with all-star local hospitality and customer service. Hosts, after all, are pillars of their local communities, shining brighter in this time of human warmth and connection than any cold corporation.
Key takeaway: Savvy Turo hosts will start planning now to meet surging spring and summer demand
Although we’re still in the early days of the pandemic recovery and should remain agile and reactive as the landscape shifts, people across the US and beyond are actively planning their spring and summer travels. Hosts in markets with more relaxed restrictions will likely continue to see strong demand throughout the spring and summer, while hosts in other markets will see a more gradual but steady recovery as their markets open back up. But Turo hosts around the world — in the States, Canada, the UK, and around the world — can likely expect to see their bookings start to climb as the mercury starts to rise, so get ready!
* Ben Casselman, “On the Post-Pandemic Horizon, Could That Be… a Boom?” The New York Times, February 21, 2021. https://www.nytimes.com/2021/02/21/business/economy/pandemic-economic-boom.html
** “From no mobility to future mobility: Where COVID-19 has accelerated change”, report, MicKinsey, December 15, 2020. ”https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/from-no-mobility-to-future-mobility-where-covid-19-has-accelerated-change
*** Laura Begley Bloom, “A Car Rental Apocalypse Is Coming, Here’s What You Need To Know”, Forbes, March 11, 2021. https://www.forbes.com/sites/laurabegleybloom/2021/03/11/a-car-rental-apocalypse-is-coming-heres-what-you-need-to-know/?sh=7c3c53ca223e
**** “Report: 2021 Will Be the Year of Meaningful Travel”, Airbnb, January 28, 2021. https://news.airbnb.com/2021-travel/