Approach of eid fails to rev up Jordan’s car rental market

AMMAN — The demand for car rentals is currently below usual levels, according to President of the Jordanian Car Rental Association, Mohammad Hajjawi.  

“Eid Al Fitr [the fast-breaking holiday after Ramadan] is a usually a very busy period for us,” he told The Jordan Times. 

 However, the occupancy rate in Jordan’s car rental industry currently stands between 30 to 35 per cent, according to Hajjawi. 

 The high tourist traffic the Kingdom is witnessing has not been reflected on demand in the sector, he added.

 “Tourists don’t commonly rent cars”; they come in groups through travel agencies that handle the logistical aspects of their stay in Jordan, Hajjawi said, noting that the car rental sector relies on people who stay in Jordan for extended periods. 

 The occupancy rate for car rentals usually increases to 70 per cent during summer, which marks the return of Jordanian expatriates who book vehicles to go out and visit their friends and family during the Eid Al Fitr holiday, Hajjawi added. 

“Current demand is definitely very low. But it could increase. We can’t tell for sure until Ramadan ends,” he added.  

Hajjawi also noted that most consumers rent regular, low priced cars, while luxury cars, which account for over 95 per cent of vehicles in the sector, have relatively low demand. 

In 2019, the value of investments in the car rental sector stood at roughly JD700 million with around 11,000 cars. Following the outbreak of the COVID-19 pandemic, the sector suffered loses of roughly JD200 million, according to Hajjawi. 

However, the value of investments in the sector are expected to reach JD1 billion this summer with roughly JD13,000 cars, he added.

Speaking with The Jordan Times, Moayad Al Fuqaha, the manager of a car rental agency, agreed that demand is currently lower than usual.  

The occupancy rate of cars at his company currently stands at roughly 60 per cent, although it usually reaches 90 per cent this time of the year, he said.  

“We make most of our profit during weddings season, Eid Al Fitr and Eid Al Adha [the holiday marking the end of Muslims’ annual pilgrimage to Mecca],” he added.

 People start booking cars for the Eid Al Fitr holiday starting the second week of Ramadan, Fuqaha continued, noting that Jordanian expatriates and Arabs from Gulf countries account for the majority of the sector’s customers. 

 “So far business doesn’t look very promising… Summer is usually our best season, while the rest of the year is somewhat stagnant, especially winter,” he said. 

According to the Car Rental Association president, there are currently 240 car rental companies in the Kingdom, employing around 4,000 workers.