A multi-million dollar investment in New Zealand’s international tourism infrastructure is expected to ease a critical shortage of rental vehicles.
Rental vehicle operator Jucy will invest $40 million dollars to expand the company's fleet of campervans and cars.
The investment is expected to support the expansion of Jucy’s New Zealand and Australian operations – providing around 1000 new vehicles and opening new locations in the trans-Tasman market.
A significant proportion of New Zealand’s rental fleet was depleted as a result of the pandemic, with thousands of vehicles sold by operators to cover overhead expenses. With borders now reopened and an influx of international tourists set to arrive for the coming summer, global vehicle shortages and shipping delays have impacted the industry’s ability to rapidly rebuild vehicle stocks.
Jucy CEO Dan Alpe says the increased capacity will provide a platform for the company’s trans-Tasman expansion as the industry moves forward from COVID.
He says their latest funding has been sourced through their local bank partner and Australian private equity firm Next Capital, who will take a majority position in Jucy – allowing the company to accelerate their growth programme across both markets.
“What we can see from our forward bookings is that the New Zealand tourism market is responding much faster than expected and we are now looking at accelerating our growth strategy to meet the growing demand in the self-drive visitor segment.
“Across the winter season we would normally be seeing fleet utilisation of 30% however we are already running at around 80 per cent capacity.
“Our data shows the upcoming summer peak of inbound international tourists will start noticeably earlier than normal – with November expected to be significantly higher than pre-pandemic levels.
“This rebound in tourism numbers is being driven by thousands of visitors from the European market and we expect to be completely sold out across summer – which means the New Zealand market will likely face a supply shortfall in excess of what we have seen previously.
“At the current rate, we are forecasting a full recovery to pre-COVID levels by November 2023.
“Next Capital is a leading mid-market private equity firm with significant experience in tourism and transport operators, including ownership of NZBus, and our new strategic partnership is designed to support our continued growth across both New Zealand and Australia.
“With the support of Next, Jucy will be able to expand more rapidly within the Australasian market as it enters a period of high demand,” he says.
Dan says they have used the past couple of years to restructure the business, introducing new technologies to reduce the number of manually intensive tasks and drive greater efficiency.
He says in comparison to others in the industry, Jucy’s fleet of campervans has remained relatively intact, however it is well below the levels required to meet projected demand.
“Our stock of campers is more than 80 per cent what it was going into the pandemic, and this has put us in a positive position to service a large share of the tourist market planning to visit New Zealand over the coming year.
“In addition to the revenue they provide, it is critical that the transport and accommodation infrastructure is there to support tourists on a working holiday visa – which provide essential labour to other sectors of the economy,” he says.
Dan says the $40 million investment will be primarily used to purchase, fitout and deploy 1000 new campervans across New Zealand and Australia.
He says the company will also look to expand the number of locations it operates from in Australia.
“We have already begun sending shipments of interiors to the Australian market where they will be installed in converted vans.
“The first of the new vehicles we have earmarked for this market will be on New Zealand roads within the next three-four months, in time for the summer season but well short of what will be needed to meet demand,” he says.
Dan says 80 per cent of the new campervans will be self-contained, with the balance designed to meet the needs of travellers staying in caravan parks and DOC sites.
