Auto Rental & Leasing NAICS 532111, 532112

Mar 24, 2026 - International Tourism to the US Drops

• A recent drop in international tourism to the US could hinder demand for auto rental services. Foreign tourism to the United States is declining as safety concerns, political tensions, and stricter entry rules discourage travelers, according to The New York Times. Some foreign travelers are canceling expensive trips, and international arrivals fell 6% percent last year, with January down another 4.8% percent compared to a year earlier, according to the World Travel and Tourism Council. Canada saw a 28% drop, and Germany and France also recorded steep declines, which industry groups say translate into billions in lost spending. New visa fees, tougher screenings, and proposed social media requirements are further deterring visitors. Analysts expect only modest growth in 2026 despite major events, including the FIFA World Cup, and they warn that policy uncertainty may continue to suppress demand.
• Avis Budget Group reported significant losses in 2025, driven largely by a strategic shift in its US electric vehicle (EV) fleet, which resulted in $518 million in impairment and related charges. The company posted fourth-quarter revenue of $2.7 billion and a net loss of $856 million, while full-year revenue reached $11.7 billion with a net loss of $995 million. The adjustment reflects declining EV values and a decision to shorten holding periods for certain vehicles. Despite the losses, Avis cited stable demand, with rental days down 1% and revenue per day declining 2% in the fourth quarter. The company also reported improved adjusted EBITDA in both its Americas and international segments, supported by lower fleet costs. Executives said the changes position the company for improved performance in 2026 through tighter fleet management.

• Electric vehicle discounts are creating new dynamics for the auto leasing industry, as oversupply and weaker demand following the expiration of federal tax credits have pushed automakers and dealers to offer aggressive incentives, according to The Wall Street Journal. Buyers can now secure steeply discounted EV purchases and lease deals, with some incentives reaching $10,000 or more, and lease support as high as $18,300 on certain models. Rising gas prices are also renewing interest in EVs and hybrids, increasing search activity and potential demand. For the leasing market, the surge in incentives is lowering monthly payments and making EV leases more competitive with gas-powered vehicles, helping absorb excess inventory. However, continued oversupply suggests pricing pressure may persist, requiring leasing companies to balance residual values and profitability as manufacturers rely on incentives to stimulate demand.
• The car rental industry spent 2025 adjusting to tariffs, weaker tourism, tighter financing, and rapid technological change, prompting both major companies and independents to rethink long-standing operating models, according to Auto Rental News. Tariff uncertainty led operators to rush vehicle purchases and hold fleets longer. At the same time, political tensions contributed to year-round declines in tourism, reducing daily rates, rental lengths, and overall usage. Smaller independents faced slow growth and stricter lending conditions, making efficiency and careful fleet planning essential. At the same time, operators accelerated digital adoption by using AI for fleet diagnostics, pricing analytics, fraud prevention, and automated check-ins. These tools helped larger independents cut fixed costs and compete more effectively. Despite a challenging year, operators are optimistic about 2026, hoping for stronger demand, better margins, improved access to financing, and wider availability of AI and digital platforms.