Australia Car Rental Market: Travel Mobility, Tourism Demand & the Future of On-Demand Transportation

According to IMARC Group, the Australia car rental market reached USD 2,717.8 Million in 2024. By 2033, the market is projected to climb to USD 4,476.0 Million, reflecting a CAGR of 5.7% during 2025–2033. This growth reflects a blend of rising domestic tourism, airport mobility demand, flexible transportation needs among business travelers, and rapid digitalization in booking and fleet-management technologies.

Why is the Australia Car Rental Market Growing?

Surge in Domestic Travel & Tourism

Australia’s domestic tourism sector has seen steady recovery and strong year-round movement. Travelers increasingly prefer flexible mobility solutions that allow them to explore regional destinations, national parks, coastal routes and remote areas. Car rentals provide independence and convenience compared to public transport, boosting rental volumes across both airport and off-airport locations.

Corporate Mobility Demand & Business Travel

Business travelers rely on rental services for meetings, intercity travel and short-term mobility needs. Companies are increasingly using short-term rental fleets to manage staff transport without the long-term cost burden of maintaining corporate vehicles. This flexibility is driving strong B2B demand across major cities and industrial hubs.

Digital Booking Platforms & App-Based Convenience

User-friendly mobile apps and websites have transformed the rental experience. Real-time pricing, digital ID verification, quick vehicle selection, cashless billing, GPS integration and automated check-in/out systems have streamlined the customer journey. These innovations attract tech-savvy consumers and reduce operational friction for rental providers.

Growing Preference for On-Demand Mobility Instead of Car Ownership

High vehicle prices, rising fuel costs, urban parking limitations and shifting consumer attitudes toward “access over ownership” are encouraging many Australians—especially younger demographics—to rent vehicles when needed rather than buying. Short-term rentals, weekend rentals and subscription-style car-rental models are gaining momentum.

Fleet Modernization & Eco-Friendly Options

Rental companies are expanding fleets with fuel-efficient vehicles, hybrids and electric cars to appeal to eco-conscious customers. As Australia moves toward emissions reduction targets, car rental agencies adopting greener fleets are positioned to benefit from both consumer preference and regulatory alignment.

Market Structure & Segmentation:

By Booking Type

• Online booking
• Offline booking

By Rental Type

• Short-term
• Long-term
• Chauffeur-driven
• Self-driven

By Vehicle Type

• Luxury cars
• Executive cars
• Economy cars
• SUVs

By Application

• Leisure
• Business

Key Players

Major companies active in the Australia car rental market include:

• Hertz Corporation
• Avis Budget Group
• Europcar Mobility Group
• Thrifty Car Rental
• Enterprise Holdings
• Sixt SE
• Local and regional operators servicing airports, city hubs and tourist destinations

These players continue to invest in digital platforms, contactless rental services, GPS-enabled fleet tracking and modern vehicle upgrades to improve customer experience and operational efficiency.

Recent News & Developments in the Australia Car Rental Market

May 2025: A leading rental provider announced an expansion of electric vehicle (EV) fleets across Sydney, Brisbane and Melbourne airports. The program added over 600 new EVs, supported by upgraded fast-charging stations. This move aligns with national sustainability goals and signals rising consumer interest in eco-friendly rental options.

August 2025: Tourism Australia reported an 11% increase in domestic travel bookings, with regional tourism hotspots showing particularly strong growth. Car rental companies benefited directly, with airport-location rentals increasing significantly as travelers sought flexible mobility for multi-city and scenic-route journeys. This trend strengthens the market’s leisure travel segment.

October 2025: Industry data revealed rising airport passenger movements—rebounding to 97% of pre-pandemic levels—which boosted demand for on-airport rental services. Companies responded by introducing fast-checkout kiosks and digital fleet-management tools to reduce wait times and optimize vehicle availability during peak travel periods.

Why Should You Know About the Australia Car Rental Market?

Because the car rental market is becoming a major pillar of Australia’s travel and mobility ecosystem. With the market expected to grow from USD 1.46 Billion (2024) to USD 2.40 Billion (2033), the industry is attracting strong opportunities across tourism, transport, fleet management and digital mobility platforms.

For rental companies, the shift toward digital bookings, self-service models and environmentally friendly fleets offers new avenues to differentiate and scale. For investors, the combination of tourism momentum, expanding domestic mobility needs and rising digital adoption makes this a resilient, high-potential sector.

And for policymakers and infrastructure planners, the sector plays an essential role in supporting regional tourism, airport capacity, sustainable transport adoption and urban mobility solutions.

The Australia car rental industry isn’t just about vehicles—it’s about how people move, explore and connect. As travel habits evolve and technology reshapes mobility expectations, this market will continue to expand, innovate and lead new forms of transportation experiences across the country.