A merger of three of New Zealand’s five largest motorhome providers has been given the green light by Tourism Holdings Ltd.’s (THL) shareholders.
According to a report by the Fairfax New Zealand News, the listed company’s board announced last month that it had offered $69.5 million to the owners of Kea Campers and United Rentals to acquire their companies. The deal was sealed with little fuss at a special shareholders’ meeting in Auckland yesterday.
THL, a motorhome rental firm, reported 97% proxies had voted in favour of the merger, while a show of hands at the meeting was unanimous.
THL will pay $7.4m through the issue of 12 million THL shares at 62 cents per share, with $3.9 million worth being distributed to the owners of United, while $3.4 million worth will go to Kea’s owners. A further $3.2 million will be paid in cash for the businesses, as well as the refinancing of $50.9 millon of debt in the companies.
A deferred payment of up to $8 million is contingent on meeting the expected sale price of motorhome vehicles.
The merger creates an entity with assets of $157 million, combined revenues of $95 million and a vehicle fleet of 2,500, though this will reduce to a total fleet size of 1,800 within two years.
THL said consumers would not see any immediate change to THL’s suite of seven motorhome brands: Maui, Britz, Mighty, Kea, United, Alpha and Econo.
THL chief executive Grant Webster said visitor numbers from Europe and the United Kingdom were stagnant, which meant the New Zealand market was oversupplied with motorhomes. He estimated the number of motorhomes for rent had increased 5% in the past three years, despite average visitor numbers from Europe and Britain falling.
If you thought the soaring price of fuel woud make recreational vehicles mechanical dinosaurs condemned to the motoring equivalent of the tar pits, think again.
“Business is absolutely booming, our rental business is surging,” says David Sammut, president of Motor Home Travel, based in Bolton, Ontario.
According to a report in the National Post, the motorhome dealer rents 80 RVs year-round and is pretty much booked for the summer months thanks to a steady influx of European tourists who want to enjoy the open North American roads and vistas that a motorhome vacation offers. That customer base is backed by a Canadian clientele that typically do not own a cottage but crave the summer outdoors experience whether it be driving northward in the summer or to warmer southern climes during the winter.
“People look at their motorhome as a mobile cottage,” Sammut says. “They say, ‘This time we will go to Muskoka (Ont.), there are literally hundreds of campgrounds everywhere or next time we will go to Arizona, or Florida or next time how bout Alaska?’ Your mobile cottage, with the comfort essentially of your home away from home, take you anywhere that there is a road.”
While many people still have think of motorhomes as gas guzzlers, Sammut said the reality is that RVs have made great strides in recent decades in terms of fuel efficiency.
Renters also get accustomed to driving the big vehicles surprisingly quickly, says Sammut, who adds that drivers do have to pay careful attention to the road given that the vehicles are nearly as wide as a highway lane.
“It’s a piece of cake,” he said. “We will get 100 families from Great Britain who are accustomed to driving something about the size of your desk on the other side of the road and in all my years they never have a problem.”
To read the entire article in the National Post click here.
Hertz, a leading worldwide car rental brand, has partnered with the U.K.’s largest motorhome hire company, Just go, to offer online booking for rental motorhomes.
“We are pleased to provide access to quality motorhome rental to our customers, with the added convenience of being able to book online,” said Michel Taride, president of Hertz International. “Hertz/Just go motorhomes provide holiday-makers with the flexibility to visit and park-up at the places they wish to see, without compromising on luxury.”
Accommodating up to seven people, customers can choose from five models including the Nomad, Scout, Rambler, Voyager, and Explorer in the U.K. All vehicles are equipped with daily essentials including cooking utensils, a microwave and a fresh water tank.
Each motorhome comes with a European Travel Pack containing useful information on travelling abroad. For more information on the makes and models available, customers can visit http://www.hertzmotorhomehire.com.
“We specialize in luxury motorhomes and through our partnership with Hertz we are proud to bring our range of vehicles to even more customers,” said Sarah Roach, marketing director at Just Go. “Motorhome holidays provide a great way for families, friends and couples to explore new destinations which they may not normally be able to stay in.”
In an effort to improve its results from the “financially unacceptable” year it had to June, Auckland, New Zealand-based motorhome rental and tourist attraction operator Tourism Holdings is looking at new ways to improve business.
According to Stuffco.nz, the company, which operates Waitomo Glowworm Caves and several motorhome brands in Australia, New Zealand and the United States, plans to reduce the number of vehicles it owns.
It is also creating new marketing campaigns targeting Asian tourists and is considering reducing the number of brands in its campervan portfolio.
Tourism Holdings earlier reported a $27 million net loss after tax for the year to June compared with a $5 million profit a year earlier.
At its annual meeting in Auckland, CEO Grant Webster said having too many vehicles on its books here and was one of the main reasons for the company’s poor performance for the year to June. It had ambitiously increased its fleet in November 2009 when bookings indicated business would be strong, but performance turned out to be flat. It hopes to sell at least 5% of its fleet in the financial year, ending June 2012.
“The difference is depreciation where the increase was the biggest impact to the result … more larger vehicles which obviously cost more and excess fleet to requirements have been the driver of the increased depreciation costs,” Webster said. “Depreciation for Tourism Holdings is a real cost and reflects the need to rotate fleet just as a retailer rotates stock.”
In the year ahead, it is reviewing the campervan brands in its portfolio. Those brands in New Zealand are higher end Maui, family brand Britz, Back Packer and Explore More. Stuffco.nz that the Explore More brand, targeted at youth, has been struggling the most.
“We will review our Backpacker and Explore More brands over the next year … They may be consolidated,” Webster said.
The company has created some new marketing initiatives to boost business, including school holiday tours of the Waitomo Glowworm Caves for children, and its bus tour group Kiwi Experience is soon to launch a new package for the Asian market in New Zealand.
It is also looking at ways to increase the popularity of its motorhome rentals with Asian markets both in New Zealand and in Australia.
The board announced that it would resume paying dividends and will confirm at the half-year results a 2-cents-a-share payout next April.
Chairman Keith Smith said results for the first half of the financial year were likely to exceed by $1 million its forecast earnings before interest and tax of $9.2 million.