Declining tourism, rising costs weigh on Kingdom’s car rental sector

AMMAN — Jordan's car rental industry is grappling with a prolonged downturn, with occupancy rates remaining significantly lower than last year, according to stakeholders.

Experts estimate that local car rental offices are currently operating at just 20 per cent capacity, a decline compared with 2023 and 2024 levels.

President of the Car Rental Offices Association Marwan Akoobah said, "Many rental businesses have been forced to sell part of their fleets simply to cover operational costs."

He said the sector is now operating with only 12,000 vehicles, highlighting the ongoing struggle, adding that regulatory constraints have exacerbated the challenges faced by businesses.

Akoobah also noted that one of the most pressing issues is the rising cost of insurance.

"Annual insurance premiums for the sector now exceed JD14 million, adding significant pressure on already struggling businesses."

Rami Hamarne, a car rental business owner, told The Jordan Times that the sector heavily depends on inbound tourism, which has seen a sharp decline in recent months.

He also pointed to the broader economic impact of the Gaza War, which has negatively affected many sectors across the Kingdom. "We are hopeful that with the war’s end, conditions will improve, and we’ll see more tourists visiting Jordan," he said.

As the industry faces mounting difficulties, business owners continue to advocate for lower taxes, extended vehicle lifespans, and stronger regulations to support the sector.