Faro airport car rental Portugal lower prices direct at Faro airport car park

Upward trajectory for the portuguese car hire market

The global car rental market is projected to grow significantly. In 2021, it accounted for USD 119.28 billion, and by 2027, it is expected to reach USD 223.07 billion with a CAGR of more than 11% during the forecast period (2022 - 2027). Portugal car hire market follows the growth trend.

The 2019 pandemic initially hindered growth due to travel restrictions and the shutdown of tourist agencies and car rental providers. However, as restrictions eased, the market began recovering, especially in North America and Europe.
The pandemic has significantly impacted tourism in Portugal and Algarve, the main destination for tourists.

Immediate Impact
- Job Losses: The pandemic put approximately 600,000 jobs in the tourism sector at risk in Portugal.
- GDP Loss: The tourism sector suffered a staggering €60 billion GDP loss due to COVID-19.

Initial Lockdown and Recovery
- During the initial lockdown, tourism came to a standstill. Travel restrictions, border closures, and fear of infection led to a sharp decline in tourist arrivals.
- Hard Times: Until at least spring 2021, the situation remained challenging. However, some recovery was expected as vaccines became available and normality gradually returned.

Recovery and Resilience
- Portugal's location as Europe's southwest tip, coupled with its reputation as a safe destination, contributed to the recovery.
- Surpassing Pre-COVID Levels: By July 2022, foreign tourism to Portugal had already surpassed pre-pandemic levels 4.
- Challenges Persist: Despite the recovery, staffing shortages and inflation remain challenges faced by the sector 4.

Cautious Optimism
- Vacationers are returning to popular destinations like the Algarve, signaling a cautious recovery 5.
- The vaccine rollout and gradual easing of restrictions are critical factors for the future of tourism in Portugal.
- Difficult Resumption. After two extremely difficult years for Car Rental companies in the Algarve and Portugal, during which almost all of them were forced to sell cars and lay off staff to avoid going bankrupt, the light at the end of the tunnel finally shone. But with new difficulties. The effects of the pandemic had also been felt throughout the global industry and when companies started going to the market to buy new cars to increase their fleets, they were faced with huge prices due to the scarcity of new cars for sale.

While the pandemic dealt a severe blow to Portugal's tourism industry, resilience, safety measures, and gradual reopening have contributed to tourism and car rental recovery.

While the rebound is slow-paced, experts anticipate a potential recovery in 2023 and 2024 as international tourism resumes.

Portuguese Car Rental Market
- The Portuguese car rental market is on an upward trajectory. By the end of 2023, it is expected to reach €865 million, reflecting growth of more than 10% compared to the previous year.
- This positive trend aligns with the gradual recovery observed globally, although specific regional data for the Algarve may not be readily available.

The car rental industry in Portugal is poised for growth, and the Algarve region is likely to benefit from increased tourism and travel. However, for precise local forecasts, further research specific to the Algarve would be necessary. But the combined effect of the resumption of international travel, the greater demand for hot and sunny destinations and the growth in the construction of new hotel units in the Algarve leads to new winds of hope for tourism and, consequently, for the rent a car market in the Algarve and Portugal.

Let's explore the correlation between the expected increase in tourism and the growth of car rental companies in Portugal, particularly in the Algarve region and the challenges related to fleet expansion and potential constraints due to car shortages and rising component prices.

Tourism Trends in Portugal and the Algarve
- Record Algarve Tourism Levels: Between January and June 2023, the Algarve experienced remarkable growth in tourism. Earnings in the tourism accommodation sector surged by 32.4% compared to the same period in 2019, which was considered the industry's best year ever.
- Increased Guests and Overnight Stays: During the first half of 2023, the Algarve welcomed 13.5% more guests (reaching 2.2 million) and witnessed 13.2% more overnight stays (totaling 8.5 million).
- Positive Outlook: The Algarve Tourism Region (RTA) expressed excitement about these results, highlighting growth in all key performance factors compared to 2022.

Car Rental Industry in Portugal
- Expected Growth: The Portuguese car rental market is projected to reach €865 million by the end of 2023, reflecting a growth rate of over 10% compared to the previous year.
- Local Car Hire in Algarve: In the Algarve there are a handful of good local car hire companies that have been a great support for Algarve tourism. Among them is Portugal Cars, which has operated at Faro airport since 2002, having been one of the pioneers in booking rental cars online via the internet. Over the years it has gained thousands of loyal customers who return every year, and appreciate their excellent customer service. Portugal Cars has a diverse fleet of rental cars, including small cars, station wagons, family cars, cabriolets, 7 seaters and 9 seaters and SUVs. Portugal Car Hire rates practiced by Portugal Cars are very competitive, making them an attractive option for car hire renters in Algarve.

Correlation and Challenges
- Increased Demand for Algarve Rental Cars: As tourism rebounds, the demand for rental cars in Portugal, especially in popular regions like the Algarve, is expected to rise.
- Fleet Expansion: Car rental companies will need to expand their fleets to accommodate the influx of tourists. Acquiring new cars is crucial for meeting this demand.

Constraints
- Car Shortages: The global semiconductor chip shortage has affected car production, leading to delays in new vehicle deliveries. Car rental companies may face challenges in securing sufficient vehicles for their fleets.
- Component Price Increases: Rising component prices (due to supply chain disruptions) can impact the overall cost of purchasing new cars. Companies must carefully manage expenses while ensuring fleet quality.
- Balancing Demand and Supply: Car rental companies need to strike a balance between meeting customer demand and maintaining profitability. Overcommitting to fleet expansion could strain resources.
- Operational Efficiency: Efficient fleet management, maintenance, and utilization are essential to maximize revenue and minimize downtime.
- Planning reservations in advance is important for two reasons:
1 - Helps companies to better plan their fleets and reinforce them if necessary.
2 - It guarantees customers that the Algarve car rental they want will be available and delivered to them without fail. And, even better, it can be rented at a lower price if the reservation in made well in advance.

Tourism Strategy and Recovery
- Portugal's Tourism Strategy 2027 aims to guide the industry over the next decade. It emphasizes a long-term vision combined with short-term actions to support recovery and growth.
- As tourists return, car rental companies play a vital role in providing flexible transportation options for travelers exploring Portugal's cities, beaches, and scenic landscapes.

The positive outlook for tourism in the Algarve and Portugal is likely to drive increased demand for rental cars. Car rental companies must navigate challenges related to fleet expansion, car shortages, and component prices to capitalize on this growth.

The forecasts for tourism growth in the Algarve region and the expected number of tourists arriving at Faro Airport in 2024:

Tourism Growth in the Algarve
- The Algarve is expected to experience positive prospects for the upcoming tourist season in 2024. These prospects stem from the opening of new routes and air connections announced for the region.
- The Algarve Tourism Association (ATA) believes that the interest shown by airlines in the destination will continue, and there may be further announcements for 2024.

Number of Tourists Arriving at Faro Airport
- While specific data for 2024 is not available yet, we can look at recent trends.
- As of March 18, 2024, Faro Airport (FAO) has seen increased arrivals from various destinations, including Amsterdam, London, Lisbon, and more.
With the downward trend in interest rates and low inflation, the increase in tourism in Portugal and the Algarve is expected to consolidate.

Travel Trends and Developments
- As we step into 2024, the travel industry worldwide will continue to evolve due to changing customer preferences and technological advancements.
- The Algarve, known for its stunning coastline, golf courses, and pleasant climate, remains an attractive destination for tourists.

While specific numbers for Faro Airport arrivals in 2024 are not yet available, positive expectations for tourism growth in the Algarve and the region's appeal to travelers suggest a promising year ahead.

The proof of trust in tourism growth is in the opening of new hotel units. Here are some newly opened hotels and resorts in the Algarve region for 2024:

1. B&B Hotel Olhao Algarve:
- Located in Olhão, this 3-star hotel opened in December 2023. It has received amazing guest reviews and offers air-conditioned rooms with private bathrooms and free WiFi.
- Rooms: 89
- Rating: 10 (amazing)

2. Amaria:
- Situated in Aljezur, this luxury 5-star hotel opened in July 2023. It features air-conditioned rooms with free WiFi and private bathrooms. Guests can enjoy free bikes and other amenities.
- Rooms: 10
- Rating: 9.8 (amazing)

3. Verdelago Resort:
- Located in Praia Verde, this resort opened in July 2023. It offers accommodation with a garden, free private parking, a restaurant, and a bar. Guests can also enjoy a children's playground.
- Rooms: 46
- Rating: 9.6 (amazing)

4. Aldeia de Portimão:
- Conveniently situated in Portimão, this hotel opened in June 2023. It provides air-conditioned rooms, a garden, free WiFi, and a restaurant serving local cuisine.
- Rooms: 9
- Rating: 8.9 (fabulous)

5. Ria Formosa Guest House:
- Situated in Faro, this guest house opened in June 2023. It features an outdoor swimming pool, free private parking, a shared lounge, and a terrace. Guests can explore nearby attractions like the Church of São Lourenço and Vilamoura Marina.
- Rooms: 11
- Rating: 9.3 (superb)

6. Hard Rock Hotel Algarve (Planned):
- Set to begin construction in early 2024, the new Hard Rock Café Hotel in Praia do Vau, Portimão, is expected to welcome guests in the summer of 2026. It will include three restaurants, three bars, three pools, Rock Spa, Rock Shop, a sports area, direct beach access, and a beach club.

These properties offer a range of options for travelers visiting the Algarve. Whether you're seeking luxury, convenience, or superb guest experiences, there's something for everyone!
To drive freely in the Algarve and get from Faro airport on arrival to the reserved accommodation tourists can make their Faro Car Hire reservation online in advance at Portugal Cars website at https://portugal-cars.com and make sure to have the rented car clean and ready minutes after landing in Algarve. The car will be delivered at Faro airport car park without the need to take any suttle to an outside depot.