Jucy has about 600 campervans in New Zealand and expects demand to bounce back soon. Photo / Supplied
Jucy has about 600 campervans in New Zealand and expects demand to bounce back soon. Photo / Supplied
Jucy warns vehicle shortages could push up rental costs and slow the recovery of international tourism.
The company kept most of its fleet of cars and vans after being decimated by the pandemic more than two years ago but says new vehicle imports are being delayed by months and thewider rental vehicle industry could be even harder hit.
Supply chain problems of the past 18 months and now Russia's war in Ukraine have hit supplies of vehicle components and deliveries around the world.
New clean car requirements for New Zealand coming into force this year were also throwing uncertainty into the rental vehicle market, said Dan Alpe, chief executive of Jucy.
He said global shortages of new cars and industry rationalisation will leave the country's rental inventory at around 30 per cent to 40 per cent of what it was before the pandemic and rental prices will rise in the short term.
"The asset rationalisation we have seen in the vehicle rental industry provided a lifeline for some of the larger players, however some of the second and third-tier companies have exited an unsustainable market.''
As a result when the country opens to international tourists over the next month, New Zealand will be missing a critical part of its infrastructure.
Dan Alpe co-founded Jucy in 2001. Photo / Supplied
"Replenishing this fleet will take us at least two years and in the interim we can expect prices to rise," he said.
Vaccinated Australian visitors will be able to come into New Zealand without isolating or MIQ from next week and those from most of the country's key markets will be able to do the same from early May.
Alpe said many rental operators sold most of their fleet when supply chain shortages increased the resale value of secondhand vehicles.
The firm's main business is two to four-berth campervans of which it has about 600 in New Zealand and 700 in Australia. Many are built on secondhand chassis but delivery times for new Toyota Hiaces have ballooned from about two to five months.
Uncertainty over border reopening had further complicated ordering timetables for vehicles.
Jucy has about 550 rental cars in New Zealand and about 800 in Australia where hire rates had spiked.
Average daily rates for car hire in Australia have increased 95 per cent - reflecting the shortage of car hire supply and bookings for March were 115 per cent of 2019 volumes for the same month.
Alpe said Australia had opened up faster, had more relaxed testing requirements and importantly, was doing more to attract working holiday visitors than New Zealand.
There was a danger this country would miss out on the tourism recovery.
The Government here could be doing more to support the sector, the biggest foreign exchange earner before the pandemic.
''Australia is burning us off right now. I wouldn't want to be in any position in Government but now it's time for the rubber to hit the road, we've got to market New Zealand and tell the world that we're open,'' said Alpe.
The experience of operating in the Australian market when it reopened for tourists last month has also provided several insights.
Its Australian operation had around three weeks' notice before the borders reopened in February - similar to what New Zealand tourism businesses have had.
"What we have seen there was a significant government investment to incentivise aviation and bring capacity back in time for the tail end of their summer season. In addition, the Australian government was well organised and was able to roll out aggressive tactical tourism campaigns targeting, in the first instance, the working holiday market, with great effect.''
This meant that there was no gradual buildup and leisure travel has bounced back straight away.
The immediate response from the market was much quicker than expected and the firm has begun to scale up our New Zealand call centre already.
He said with Australian school holidays coming, self-drive tourism numbers were set to be strong for the South Island.
Jucy held on to most of its fleet in New Zealand when the market collapsed. Photo / Supplied
"Tourism operators around the country will be taking a leap of faith at the moment - investing in staffing and equipment resources at a time where their cashflow has been strained to the limit - the challenge at this point is that the revenue won't hit their accounts until the visitors arrive.''
Staff numbers at Jucy had fallen from around 450 in New Zealand before the pandemic to 120 now. The firm was rehiring but like all employers faced a labour shortage, which in the past had been eased by working holiday visa holders who were good for the wider economy as they also travelled and spent when here.
Despite some friction points at the border, bookings from Europe - Germany, France and Britain - for the coming summer were also strong.
"Our European distributors tell us interest in New Zealand remains strong, however, we don't expect to get high volumes of long haul northern hemisphere travellers arriving until October onwards," said Alpe.
When Covid hit about 95 per cent of Jucy's market disappeared.
''It was devastating watching a business I'd spent 20 years sitting alongside my brother [Tim] building falling all around us because we lost our revenue overnight.''
The firm was bought by Polar Capital, the investment company of Colin Neal, with a minority stake going to another local David Cushing. Its accommodation and cruise businesses weren't part of the deal.
Jucy Snooze is now owned by Australian-based Event Hospitality and Tim Alpe is running the business.
