Car Rental (Destination) in Bulgaria Euromonitor International September 2021 C A R R E N T A L ( D E S T I N A T I O N ) I N B U L G A R I A P a s s p o r t i © E u r o m o n i t o r I n t e r n a t i o n a l LIST OF CONTENTS AND TABLES KEY DATA FINDINGS ................................ ................................ ................................ .................. 1 2021 IMPACT ................................ ................................ ................................ ............................... 1 Limited travel oppo rtunities in the first half of 2021 hamper the growth of car rental ................ 1 Lengths of car rental bookings continue to expand amidst widespread uncertainty ................. 1 RECOVERY AND OPPORTUNITIES ................................ ................................ .......................... 2 A meaningful recovery in sight for car rental over the forecast period ................................ ...... 2 The threat of new waves of the pandemic puts the recovery car rental in jeopardy ................. 2 CATEGORY DATA ................................ ................................ ................................ ....................... 2 Tab le 1 Car Rental Sales: Value 2016 - 2021 ................................ ............................. 2 Table 2 Car Rental Online Sales: Value 2016 - 2021 ................................ .................. 3 Table 3 Structure of Car Rental Market 2016 - 2021 ................................ ................... 3 Table 4 Car Rental NBO Company Shares: % Value 2016 - 2020 ............................. 3 Table 5 Car Rental Brands by Key Performance Indicators 2021 ............................. 3 Table 6 Forecast Car Rental Sales: Value 2021 - 2026 ................................ .............. 5 Tab le 7 Forecast Car Rental Online Sales: Value 2021 - 2026 ................................ ... 5 C A R R E N T A L ( D E S T I N A T I O N ) I N B U L G A R I A P a s s p o r t 1 © E u r o m o n i t o r I n t e r n a t i o n a l CAR RENTAL (DESTINATION) IN BULGARIA KEY DATA FINDINGS ▪ A partial recovery is seen in car rental (destination) during 2021 as inbound and domestic tourism flows register better perfor mances, although bookings and revenues remain far lower than pre - COVID - 19 levels ▪ 8% current value growth is recorded in car rental (destination) in 2021 as sales hit BGN22 million ▪ The restrictions on travel from overseas have a particularly negative impact on car rental during 2021 as the majority of current bookings in Bulgaria are accounted for by foreign visitors ▪ The forecast period is set to see car rental (destination) increase in current value at a CAGR of 29% (26% at constant 2021 prices) 2021 IMPACT Limited travel opportunities in the first half of 2021 hamper the growth of car rental Car rental managed to record dynamic positive growth in 2021, although this represented only a partial recovery from the catastrophic performance registered during 2020, when significant sales declines flowed from the COVID - 19 pandemic. Among the factors presenting challenges t o car rental players in Bulgaria during 2021 were ongoing lockdowns and limitations on the ability and willingness of people to travel due to the resurgence seen in the spread of the COVID - 19 virus early in the year. With the spread of the highly contagiou s Delta variant of the COVID - 19 virus accelerating dramatically in Bulgaria and throughout Europe during the second half of 2021, related developments are likely to continue having a very negative impact on the country’s travel and tourism industry, with c ar rental likely to be among the categories reporting losses in opportunities and revenues. According to senior industry figures, it is expected that the COVID - 19 pandemic will continue having a severe impact on car rental businesses in the country for the foreseeable future. It is likely to take until the end of the review period for a meaningful recovery to be seen from the declines that have been seen in the numbers of car rental bookings since the start of the pandemic. Among the measures that have had the strongest impact on car rental bookings is the 14 - day quarantine that is imposed upon all of those arriving in Bulgaria, as visitors arriving from abroad account for the vast majority of car rental bookings in the country. Lengths of car rental bookin gs continue to expand amidst widespread uncertainty In a continuation of trends that emerged in car rental in Bulgaria during 2020, the average length of car rental bookings in terms of the number of car rental days continued to increase during 2021. This trend is likely to have emerged in response to the uncertainties that most consumers are facing as the threat of quarantine lockdowns and further travel restrictions continue to linger in 2021. More specifically, many consumers are interested in maintainin g C A R R E N T A L ( D E S T I N A T I O N ) I N B U L G A R I A P a s s p o r t 2 © E u r o m o n i t o r I n t e r n a t i o n a l flexibility in their bookings, so as to avoid losing money due to being forced to change their plans at the last minute. Thus, a small increase in initial outlay by booking rental cars for a couple of days longer than necessary at either end of the desir ed booking period could potentially obviate the cancellation of the entire booking, which would be considerably more costly. RECOVERY AND OPPORTUNITIES A meaningful recovery in sight for car rental over the forecast period Although car rental (destinati on) in Bulgaria has been hit hard by the COVID - 19 pandemic, there is hope in sight of a full recovery for the category before the end of the forecast period. Indeed, the category is expected to have mounted a complete recovery by the end of 2025, with the return to pre - COVID - 19 levels of bookings and revenues likely to flow from the anticipated recovery of inbound tourism flows. The bulk of car rental bookings in Bulgaria are accounted for by foreign visitors and thus the ability of inbound tourism flows to rebound strongly will be the key factor determining the pace of recovery for car rental (destination). It should also be noted that in Bulgaria, car rental is a category that caters equally to leisure and business travellers and this means that promotiona l activity will need to target both of these key segments of the Bulgarian travel and tourism industry to achieve maximum effect as demand for car rental recovers. The threat of new waves of the pandemic puts the recovery car rental in jeopardy The emerg ence in Europe of the highly infectious Delta strain of the COVID - 19 virus during 2021 raises the spectre that the recovery of car rental (destination) in Bulgaria could be delayed or otherwise adversely impacted by a prolongation of the current travel res trictions. The spectre of further waves of novel variants of the COVID - 19 virus, some of which could even be resistant to current vaccinations and treatments, has the potential to vitiate the efforts of the country’s car rental players to recover from the devastation of 2020. In particular, the closure of Bulgaria’s borders to foreigners, the requirement for arrivals to quarantine for 14 days and the partial or complete shutdown of the Bulgarian hospitality industry all remain possibilities and any of thes e potential developments would severely hamper the ability of car rental players to resurrect their struggling businesses during the forecast period. CATEGORY DATA Table 1 Car Rental Sales: Value 2016 - 2021 BGN million 2016 2017 2018 2019 2020 2021 - Business Car Rental 19.6 21.8 26.8 28.4 9.9 10.7 - Leisure Car Rental 18.5 21.3 26.6 28.7 9.8 10.5 - Insurance Replacement 1.7 1.8 2.1 2.3 0.7 0.7 Car Rental - Car Rental Offline 14.9 15.3 17.1 17.0 5.2 4.9 - Car Rental Online 24.9 29.7 38.3 42.3 15.2 17.0 Car Rental (Destination) 39.8 44.9 55.4 59.4 20.4 22.0 C A R R E N T A L ( D E S T I N A T I O N ) I N B U L G A R I A P a s s p o r t 3 © E u r o m o n i t o r I n t e r n a t i o n a l Source: Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources Note: Car ren tal is the sum of business, leisure and insurance replacement, or the sum of online and offline sales Table 2 Car Rental Online Sales: Value 2016 - 2021 BGN million 2016 2017 2018 2019 2020 2021 -- Car Rental Online 20.8 24.7 31.5 34.4 12.3 13.6 Dir ect -- Car Rental Online 4.1 5.0 6.8 7.9 2.9 3.4 Intermediaries - Car Rental Online 24.9 29.7 38.3 42.3 15.2 17.0 Source: Euromonitor International from official statistics, trade associations, trade press, company research, trade interview s, trade sources Table 3 Structure of Car Rental Market 2016 - 2021 2016 2017 2018 2019 2020 2021 Fleet Size '000 3.3 3.7 4.0 4.5 4.5 4.5 Operators 61.0 60.0 60.0 59.0 55.0 53.0 Transactions '000 118.0 135.7 148.9 156.6 52.2 55.9 Source: Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources Table 4 Car Rental NBO Company Shares: % Value 2016 - 2020 % retail value rsp Company 2016 2017 2018 2019 2020 2021 Modul EOOD 23.5 27.8 42.7 44.1 44.8 44.5 Evrorentals OOD 11.2 13.9 12.4 11.9 13.2 13.3 Autotechnica OOD 19.5 14.8 13.0 12.8 13.1 13.0 Eurolease Rent a Car Ltd 10.9 10.8 9.5 9.3 9.3 9.2 Tourist Servic e Holding 6.7 7.0 6.5 6.4 5.9 5.9 Mirkat OOD 1.4 1.4 1.3 1.3 1.2 1.2 Car Rental Bulgaria Ltd 1.1 1.1 0.9 0.9 0.9 0.9 Tany 97 OOD 0.5 0.5 0.4 0.4 0.4 0.4 Drenikov Rent - A - Car Ltd - - - - - - Others 25.1 22.8 13.2 12.9 11.3 11.5 Total 100.0 100.0 100.0 100.0 100.0 100.0 Source: Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources Table 5 Car Rental Brands by Key Performance Indicators 2021 LBN (NBO) Average Average Average Daily Fleet Transact number Rental Sales Spend Size ions of Duration Per Per ('000) ('000) transac - Transact Transact C A R R E N T A L ( D E S T I N A T I O N ) I N B U L G A R I A P a s s p o r t 4 © E u r o m o n i t o r I n t e r n a t i o n a l tions ion ion per car (Local (Local currency) currency) Avis (Eurolease Rent a 10.3 6.7 492.2 74.0 0.2 2.1 Car Ltd) Budget Rent a Car 13.3 6.3 388.4 61.2 0.2 2.5 (Eurolease Rent a Car Ltd) Car Rental Bulgaria 16.1 5.3 603.0 114.9 0.0 0.3 (Car Rental Bulgaria Ltd) Dolla r Rent a Car 13.0 5.8 477.9 82.4 0.1 0.7 (Autotechnica OOD) Enterprise Rent A Car 10.9 6.7 564.4 84.9 0.0 0.5 (Mirkat OOD) Europcar (Evrorentals 12.4 7.3 644.8 88.9 0.3 4.1 OOD) Firefly (Autotechnica 12.3 6.1 347.2 56.9 0.1 0.8 OOD) Hertz (Autotechnica OOD) 12.5 6.6 463.3 70.2 0.3 4.3 InterRent (Evrorentals 9.3 8.4 309.4 36.6 0.1 0.8 OOD) Sixt (Tourist Service 11.5 5.7 547.4 96.0 0.2 2.4 Holding) Tany - Rent a Car (Tany 13.0 5.4 357.3 66.2 0.0 0.2 97 OOD) Thrifty Car Rental 13.5 5.5 398.1 72.4 0.1 0.7 (Autotechnica OOD) Top Rent a Car (Modul 14.4 5.6 381.2 68.7 1.8 25.6 EOOD) LBN (NBO) Utilisat ion (%) Avis (Eur olease Rent a 18.7 Car Ltd) Budget Rent a Car 23.1 (Eurolease Rent a Car Ltd) Car Rental Bulgaria 23.1 (Car Rental Bulgaria Ltd) Dollar Rent a Car 20.7 (Autotechnica OOD) Enterprise Rent A Car 19.9 (Mirkat OOD) Europcar (Evrorentals 24.7 OOD) Firefly (Autotechnica 20.6 OOD) Hertz (Autotechnica OOD) 22.6 InterRent (Evrorentals 21.4 OOD) Sixt (Tourist Service 18.0 Holding) Tany - Rent a Car (Tany 19.3 97 OOD) Thrifty Car Rental 20.4 (Autotechnica OOD) Top Rent a Car (Modul 21.9 EOOD) C A R R E N T A L ( D E S T I N A T I O N ) I N B U L G A R I A P a s s p o r t 5 © E u r o m o n i t o r I n t e r n a t i o n a l Source: Euromonitor International from offic ial statistics, trade associations, trade press, company research, trade interviews, trade sources Note: Average rental duration refers to number of days Table 6 Forecast Car Rental Sales: Value 2021 - 2026 BGN million 2021 2022 2023 2024 2025 2026 - Business Car Rental 10.7 14.2 18.5 23.3 28.0 32.8 - Leisure Car Rental 10.5 14.0 18.2 23.3 28.2 33.5 - Insurance Replacement 0.7 1.0 1.3 1.6 2.0 2.5 Car Rental - Car Rental Offline 4.9 5.8 6.8 8.1 9.1 10.4 - Car Rental Online 17.0 23.3 31.2 40.2 49.1 58.5 Car Rental (Destination) 22.0 29.2 38.0 48.3 58.2 68.9 Source: Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources Note: Car rent al is the sum of business, leisure and insurance replacement, or the sum of online and offline sales Table 7 Forecast Car Rental Online Sales: Value 2021 - 2026 BGN million 2021 2022 2023 2024 2025 2026 -- Car Rental Online 13.6 18.5 24.7 31.9 39.0 46.5 Direct -- Car Rental Online 3.4 4.8 6.5 8.3 10.1 12.0 Intermediaries - Car Rental Online 17.0 23.3 31.2 40.2 49.1 58.5 Source: Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources