Advent of Shared Economy to Assist Boat Rental Market Growth
With the emergence of Ola, Uber, and Airbnb, shared economies are thriving, globally. The last few years have witnessed boats in Europe and North America sitting unused 90% of the time. This has made boat ownership tedious, superfluous, and costly, with mounting maintenance costs, taxes, and marina rentals. It has therefore helped propagate the idea of sharing for better utilization of resources. In a booming shared economy, the boat rental market could re-establish itself as an engine of regional economic development. With the millennial population vociferous about experiencing rather than owning, boat rental companies have scaled up at a rapid rate, and are presenting robust growth opportunities. On this backdrop, the boat rental market is all set to expand at a CAGR of ~4% during the forecast period (2019-2027).
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Recreation and Digitalization - New Hubs of Profitability and Opportunity
The opportunity to reach new customers through fishing, vacationing, and inland freight transportation is closing the historical gap of the boat rental market’s previous performance to what it is now. This is giving an impetus to the boat rental market’s penetrative reach, which will be expected to reach a value of ~US$ 26 Bn by the end of the forecast period. Investor optimism is skyrocketing as boat rental services are capturing the tangible benefits of digitalization, thereby fuelling their demand. The high convergence of web-based boat renting and leasing applications has significantly contributed to affordable and easy booking. The industry will also witness a strong growth trajectory with the growing number of ultra-high net worth individuals (UHNW). Their rising inclination to invest in luxury cruise boat vacations will potentially drive the market in the coming years.
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Fuel-powered Boats to 'Fuel' Market Growth, Electric Boats Gaining Traction
Within the boat rental market, fuel-powered boats is a prominent segment, and will continue to be so, reaching a market value of ~US$ 22.5 Bn by the end of the forecast period. The performance of this segment is largely attributable to the high profitability accruing from the relatively higher boat volumes. While electric boats will capture a significantly smaller share of the market during the forecast period, their growth will still be noteworthy. The market for electric boats will surge on the back of emission-free transportation needs. Europe and North America will be the key markets for electric boats during the forecast period. The market for boat rentals is seeing a seismic shift, as fewer people are seeking to buy their own boats, while the amount of people who want to experience boating is on the rise.
Boat Rental Market Resurgent as B2C Business Model Reigns Supreme
The influx of business models in the boat rental market is allowing players to scale up their advantages and create additional value. The B2C segment held a major chunk of the boat rental market in the year 2018. Ample scope of revenue opportunities has prompted many companies to invest in boat rental services, which, in turn, is boosting the B2C segment. Boat rental services for tours and B2C segments will collectively account for almost one-third of the market share by the end of the forecast period. The notable share by both these segments is owing to the resurgence of marine tourism. Recreational activities on luxury yacht charter will propel the luxury day cruise segment, foreseen to witness a CAGR of 4.5% over the assessment period.
Europe Leading the Way, North America Catching Up
Europe is home to a highly developed boat rental service market. Boat rental service providers have entered this attractive region with the promulgation of advanced platforms such as Uber and Boatsetter. North America is another significant revenue pocket for the growth of the boat rental market, and is foreseen to witness massive expansion. Together, Europe and North America will account for ~55% of the global market share by the year 2027. Across these regions, key players have been able to build a consistent and sufficiently larger boat portfolio. Latin America and Asia Pacific are emerging regions, and will provide lucrative opportunities for players to invest in the boat rental market. Improvement in economic performance is a major factor fuelling the growth of the market in these regions.
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Competition Heating Up as Expansion Abounds
Globally, the boat rental market is highly consolidated, with the top 8 players contributing to ~63% of the market share. Players in the market are focusing on staffing efficiency, acquisitions, and expansion strategies to increase their global footprint. Boatsetter and GetMyBoat are two of the leading players in the market. Boatsetter, headquartered in Berlin, Germany, has expanded its presence across nearly 600 locations in Europe, the Americas, and Australia. The company offers boats for recreational water sports such as kayaking and rafting. In 2019, the company totalled 20,000 boats, a fourfold jump from the year 2017. GetMyBoat, headquartered in San Fransisco, U.S., is one of the fastest-growing companies with over 130,000 boats. The company claims to have recorded a surplus of 485,000 booking requests in the year 2018. Following this, it also secured a funding of US$ 10 Mn from investors led by Yanmar Marine International. This has boosted the company’s growth, and has slated it among the top competitors in the boat rental market.
Global Boat Rental Market – Key Insights
- The global boat rental market is anticipated to expand at a CAGR of ~4% from 2019 and 2027.
- In terms of propulsion, the fuel-powered boats segment holds a prominent share of the global boat rental market, due to the high power generation capacity of fuel-powered boats.
- Based on business model, the B2C (business to consumer) and tour segments held prominent shares of the global boat rental market.
- In terms of boat length, the below 28 feet segment dominated the global market, due to the higher preference for smaller boats owing to their low rental charges.
Drivers of Global Boat Rental Market
- Rising investments to promote nautical tourism across several countries are likely to boost the boat rental market during the forecast period. Increase in per capita income and purchase power parity of society has led to higher spending on leisure and luxury, which, in turn, is driving the global boat rental market.
- The development of online platforms and various business models for ease of operations has played a major role in boosting the boat rental market. Moreover, new promotional boat renting methods, such as online boat rental service providers collaborating with travel agencies to offer combined airline and luxury boat packages, is fueling the demand from consumers, as they consider the proximity of airports while booking luxury boats. Thus, ease of renting a boat is expected to boost the global boat rental market in the near future.
- Additionally, the maintenance cost of boats, especially larger cruiser boats or sail boats, is significantly high. Moreover, boats require regular protection against saline water and tough weather conditions. Regular maintenance and its cost are eliminated by renting a boat, which further eliminates the stress of boat maintenance. This is another factor that is likely to boost the global boat rental market during the forecast period.
Challenges for Global Boat Rental Market
- Boat rental costs are hiked considerably during peak seasons, owing to high consumer demand due to preference for cool swims, long boat rides, water skiing, and adventurous water sport activities in that particular season. Boat renting costs during this time vary across regions. This, in turn, is likely to hamper the demand for boat rentals.
- Another important factor hampering the boat rental market is high taxation on boat rental services across various regions. For instance, VAT laws in the European Union (EU) are not standardized, and hence, each country has its own taxation laws and regulations. This restrains the boat rental market considerably. Moreover, the boat rental market in high taxable regions witnessed sluggish expansion. This is anticipated to restrain the global boat rental market during the forecast period.
Global Boat Rental Market: Key Segments
- The global boat rental market has been segmented based on propulsion, business model, length, boat class, and region.
- Based on propulsion, the fuel-powered boats segment is expected to hold a major share of the global boat rental market, owing to the high popularity for these boats in the boating industry. Fuel-powered boats utilize conventional technology and generate considerably high power, which propels the segment. Rising inclination toward green mobility is anticipated to drive the electric boats segment of the boat rental market.
- In terms of business model, tour and day cruise are prominent segments of the market. Moreover, rise in nautical tourism to experience boating and sightseeing is propelling the tour and day cruise segments. Expansion of boat rental service platforms for renting a privately-owned boat is driving the peer to peer (P2P) segment. The P2P segment is anticipated to expand at a notable pace in North America and Europe, as a large number of boating enthusiasts own boats in these regions.
- In terms of length, small boats are highly popular, owing to their lower rentals and high fuel efficiency. Thus, the below 26 feet segment is anticipated to be a prominent segment of the market. Rise in spending capacity of society and trend of boating as a major leisure activity are driving the medium-sized boat length segment of 26 feet to 45 feet. Large boats are mostly luxury boats that are employed for charter activities and events.
- Based on boat class, the luxury segment is expected to expand at a rapid pace as compared to the other segments, owing to rise in the spending capacity of people and surge in the preference for organizing family events and vacations on luxury yachts. The rising popularity of boating vacations on exotic destinations is anticipated to be a key factor that drives the market. Sports boats are highly popular in Europe, as a large number of sailing and boating events are organized in the region to promote the sport of boating and other leisure marine activities.
Global Boat Rental Market: Europe Plays a Major Role
- In terms of region, Europe leads the global boat rental market, and is estimated to hold a leading share during the forecast period too.
- The boat rental market in Europe has witnessed expansion due to the high preference for nautical tourism in the region. Vast scenic coastline and developed infrastructure have played a vital role in driving the boat rental market in Europe.
- Greece, Croatia, and France are major tourist destinations, and they contributed to the prominent share of the region in the global boat rental market. Government and regional authorities across Europe are focusing on the expansion of marinas and development and modernization of berths to boost nautical tourism, which, in turn, is propelling the boat rental market in Europe.
Global Boat Rental Market: Competition Landscape
- Prominent players operating in the global boat rental market include
- Sailo Inc.
- Zizooboats GmbH
- GETMYBOAT INC.
- West Coast Marine
- Le Boat
- Boatjump, S.L.
- Odyssey Boats
- GLOBE SAILOR
- THE MOORINGS
- Blue Boat Yacht Entertainment Company
- BLUE BAY MARINE
- Yachtico Inc.
- Navigare Yachting
- Products Corporation.
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