Tourism Holdings sees further van downturn
Tourism Holdings Ltd is expecting further shrinkage in the campervan rentals market requiring a further reduction of 200 to 300 vehicles in its own fleet.
One view from the tourism industry is the campervan and tourism rental sector built up numbers too far in anticipation of the Rugby World Cup 2011. Earlier this week the receivership of established New Zealand campervan rental firm Pacific Horizon was announced.
THL chief chief financial officer Ian Lewington said the industry had cut back on building new vehicles. The company had further sales of its campervans planned.
"We're certainly aiming to reduce our fleet a bit further. We were at 2500 units at the merger, we're just over 2000 now and will probably aim to be around 1700 to 1800 units."
From last November the NZX- listed tourism business took KEA Campers and United Campervans under the umbrella of its own rental vehicle division. The merged company has about half of New Zealand's motorhome market.
A glut of campervans on the rental market and a lack of foreign visitors forced the merger.
Lewington said the campervan market had been tough for a few years. THL was itself still in the process of selling down excess fleet campervan units. The company had a network of dealers including a large "supercentre" in Auckland and another one in Christchurch selling new and second-hand campervans that might be seven or eight years old. Prices ranged from $30,000 up to $150,000.
"The [sales] market has been pretty reasonable since the merger. We've had a good run; it's a bit quiet now because it is the middle of winter. But the resale or used market has been sound."
He noted the Pacific Horizon receivers had said about 260 campervans were available. While these might go onto the market, he did not think they would flood the sale market. The finance firms that had helped back the large capital investment by campervan firms would want an orderly sale, he said.
"I obviously can't comment on Pacific Horizon specifically. But they can't have had a strong enough balance sheet for current trading conditions."
Despite the 2011 earthquakes, THL had not seen a falloff in business out of Christchurch because customers from the United Kingdom, Europe and Australia had picked up from the airport to drive off around the rest of the South Island.
"There was obviously a downturn but we can't put the overall market being down to the earthquake at all." The company had picked at the time of the October merger that the New Zealand market was 25 per cent "over fleeting".
Jucy chief executive Tim Alpe said his business, which provided both smaller campervans and other vehicles to the budget end of the market, had found recent trading positive and was also seeing strong forward bookings for the coming season to the point where it would be building extra vehicles for the market.
"We think our sector's growing. We had a pretty good last summer," Alpe said.
Christchurch and Canterbury Tourism industry partnerships manager Caroline Blanchfield said her personal view was that the campervan market became oversupplied in anticipation of the Rugby World Cup 2011. That was around the same time as the Christchurch earthquakes.
"A lot of these campervan and rental places geared up for all of these visitors, and maybe some of them didn't eventuate."