Jucy expands to meet surging tourist demand. Video / Jucy
Jucy is investing $40 million in new vehicles to ease a critical shortage of rental vehicles.
The funding has been sourced through their local bank partner and Australian private equity firm Next Capital, which will take a majority position in Jucy - allowing the company to accelerate their growth inboth countries. Polar Capital will retain a minority stake in the business.
The investment will help the expansion of Jucy's New Zealand and Australian operations - providing around 1000 new vehicles and opening new locations in the transtasman market.
Jucy's chief executive Dan Alpe, said the $40m will be primarily used to purchase, fitout and deploy new campervans in New Zealand and Australia.
"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."
During winter the company's fleet utilisation was usually 30 per cent, however it is now running at around 80 per cent capacity.
It has 1500 vehicles in New Zealand and 1000 in Australia.
Company data shows the upcoming summer peak of inbound international tourists is expected to start 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," said Alpe.
"At the current rate, we are forecasting a full recovery to pre-Covid levels by November 2023."
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.
Jucy chief executive Dan Alpe. Photo / Supplied
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.
Alpe said the new vehicle market remains tight resulting in longer than normal lead times.
"We are working closely with numerous key partners to ensure we address this gap."
Rental rates had also rebounded.
"We are continuing to see rental prices recover strongly as demand continues to outstrip supply."
Next Capital specialises in providing buy-out funding for small to medium growth businesses, typically valued between A$50m ($55.3m) and A$200m.
Next Capital is a leading mid-market private equity firm with significant experience in tourism and transport operators, including ownership of NZBus from 2019.
Next has more than $600m of funds under management and substantial capital available for new investment.
"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," Alpe said.
The business was hit hard when the pandemic hit - losing 95 per cent of its business immediately - and had used the last couple of years to restructure, 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 over 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."
Jucy has a fleet of about 1500 vehicles in New Zealand. Photo / Supplied
In addition to the revenue they provided, it was critical that the transport and accommodation infrastructure is in place to support tourists on a working holiday visa - which provide essential labour to other sectors of the economy, he said.
He said the company will also look to expand the number of locations it operates from in Australia.
It has 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 said.
Alpe said 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.
