COVID-19, a pandemic that changed the way world behaved, and things were done. While it deeply impacted my businesses globally, more than anything, it changed the mindset of consumers. While this forced many businesses to shut, it helped other ones to see a boom. One such industry was luxury mobility rental business. Fear of transmission forced most of the people to stay away from crowded places and shared mobility like public transportation. This, in turn, opened a big space for luxury rental industry, as people were looking for a personal time away from crowd, either for essential travelling or for leisure activities. We got in touch with Raghav Belavadi – Founder & CEO, Hype Luxury Mobility to understand this changing trend. Here’s a small conversation:
Tell us about the Luxury Car Rental Market of India
In general, the luxury goods and services industry is very promising and growing at an average of 16 per cent year-on-year in India. In the luxury car rental space, Hype being pioneers, is itself a reference point and we are witnessing a sharp rise in demand post easing of pandemic lockdown restrictions. Today, more people, especially the millennials and GenZ, unlike their parents and grandparents, prefer to experience luxury car driving without long term financial commitment of purchasing a luxury car. Rise of international tourism, exposure to luxury services, increase in smartphone penetration, higher disposable incomes and better road infrastructure are some of the growth drivers in the luxury mobility rental market.
How has Covid 19 Impacted this segment?
The Covid-19 pandemic has hit the luxury car sales resulting in demand for the luxury car rental market. Yes, unlike some other industries, which are still recovering from the impact of the pandemic, the luxury car rental industry is already showing positive growth. With social distancing being religiously followed, personalised mobility is in demand, leading to a boom in the luxury car rentals segment, where customers trust health and safety measures are already in place. Secondly, due to economic uncertainty and loss of jobs as a result of Covid-19, people are opting to rent cars rather than own them.
What growth opportunities do you see in India?
Growth potential for the luxury mobility market is excellent in India, driven by travelling convenience, easy-to-use AI-enabled platforms, experiential luxury, freedom from maintenance and growing awareness of luxury car rental services. We at Hype, started with only 18-20 cars four years ago and today have grown to a fleet size of around 14,000 including 5,400 luxury cars and 8,000 premium cars. From our operations in only 7 cities in 2017, we are now present across cities in India. With more than 400 percent growth month on month after the lockdown was lifted, we are confident to exceed our earlier growth rate this year, as we see an increase in weekend trips, weddings and birthday parties.
What are the challenges you face in a market like India?
There are fewer hurdles for the growth of the luxury mobility rental market in India, home to the world’s largest population of millennials and Gen Z. This category exhibits a value-driven consumption pattern different from Gen X and baby boomers. Aware of the impact of carbon foot-print they opt for mindful consumption. Pre-loved luxury goods are in demand more than ever before. Buying branded goods that are superior in quality, offered at the right price, fitting both their budget and values is what people are opting for. Shared economy is appreciated. So the luxury car rental services appeal to the population rather than opting to own one. Self-driven luxury car rentals offer convenience, quality lifestyle and are cost-effective too. With people using luxury cars on occasions, they are questioning the reason to own one that comes with heavy maintenance.
Has far along are we to match global markets?
Luxury market in India is relatively in its nascent stage and not large when compared to mature markets of the US and China and it may take a decade to match. In the luxury car rentals, currently there is a surge in demand as people want to experience and indulge in travel, which had been a pent up desire during the lockdown period.
Tell us about the Jet rental business
The jet rental industry in India is still in its nascent stages, unorganized and sporadic with less awareness among the general public. There are only about 100 jets in the country and few players in space. People who use business class for flying have the option to rent a private jet with some wanting the experience. Hype is a super aggregator in this segment and we have been responsible for streamlining it, bringing discipline, convenience and predictability.
Post Covid, we have seen an increase in the demand, but are only providing services to our existing and referred customers. The rental charges range from Rs. 1.5 lakh to Rs.70 lakhs catering to both business and holiday requirements. In the jet rental business the key is deliver customer experience that exceeds expectations. However, we are going slow in marketing of this segment at present with the main focus on luxury car and yacht rental services.
Tell us about your future expansion plans
In the last year, we have expanded our luxury car rental services offerings across 19 cities in India from the seven we initially were operating. Our focus is now on Tier II cities in the country and would like to put our efforts there in delivering better customer experience. However, we have plans to expand our services in Dubai, UK and the US and increase our global footprint.