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New Zealand Rental Vehicle Market Insights Report

February 2020

16th Edition | Issued 2nd March 2020

SECTION 1
FEBRUARY 2020 ANALYSIS

Year on Year (YoY^) Average Rate Change

• For all three locations, across all sales channels, the average rate was lower by -8% YoY
• The average rate for Auckland Airport (AKL) -5% lower versus prior year
• Christchurch Airport (CHC) average rate was -8% YoY
• Queenstown Airport (ZQN) average rate was -10% YoY
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Channel, Duration and Vehicle Category

Refer to sales channels (Fig.2), duration (Fig.3) and vehicle category (Fig.4) graphs for the average rates during the month. As it is still peak season, the average rate for all durations and vehicle categories remains high as is the seasonal norm during the peak season .

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Fig. 2

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Fig. 3

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Fig. 4

Auckland Airport YoY Summary

Overall Auckland Airport had a YoY average rate decrease of -5%.

The Direct sales channel average rate was -13% lower, the Gross Agent OTA decreased -22%, while the Net Agent OTA sales channels showed an increase +7% (Fig. 5).

The average rate for 3-day duration decreased -9%, while the average rate for 7-day duration was -1%, and 14-day duration -4% (Fig. 6).

The average rate for the larger vehicle classes, SUV and Intermediate were lower by -8% and -9% respectively, while the smaller Compact and Economy vehicles were up between +4% and +2% (Fig. 7).

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Fig. 5

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Fig. 6

7-3

Fig. 7

Christchurch Airport YoY Summary

Overall Christchurch Airport had a YoY average rate decrease of -8%.

The Direct sales channel average rate was -10% lower, the Gross Agent OTA decreased -17%, while the Net Agent OTA sales channels showed a decrease of -1% (Fig. 8).

The average rate for 3-day duration decreased -11%, while the average rate for 7-day duration was -8%, and 14-day duration -6% (Fig. 9).

The average rate for the larger vehicle classes, SUV and Intermediate were lower by -12% and -15% respectively, while the smaller Compact and Economy vehicles were lower between -3% and -2% (Fig. 10).

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Fig. 8

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Fig. 9

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Fig. 10

Jul19-fig8a

Queenstown Airport YoY Summary

Overall Queenstown Airport had a YoY average rate decrease of -10%.

The Direct sales channel average rate was -10% lower, the Gross Agent OTA decreased -23%, while the Net Agent OTA sales channels showed a decrease of -4% (Fig. 11).

The average rate for 3-day duration decreased -16%, while the average rate for 7-day duration was -7%, and 14-day duration -7% (Fig. 12).

The average rate for the larger vehicle classes, SUV and Intermediate lower by -14%, while the smaller Compact and Economy vehicles were lower between -5% and -3% (Fig.13).

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Fig. 11

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Fig. 12

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Fig. 13

SECTION 2
YEAR TO DATE (YTD) ANALYSIS
FROM OCTOBER 2019 TO JANUARY 2020

Year to Date (YTD) Analysis: October 2019 to January 2020

  • Average rates levelled off in February 2020 as the market tightened post Christmas (Fig.14), but if averaged across both January and February 2020, then average rates were flat
    compared to prior year, with this trend being consistent across all locations (Fig.15 to Fig.17).
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Fig. 14

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Fig. 15

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Fig. 16

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Fig. 17

SECTION 3
FORWARD MARKET ANALYSIS
FROM FEBRUARY TO AUGUST 2020

Forward Market Analysis

February to August 2020

As noted in the previous report, the strong January 2020 month (largely due to the seasonal timing of national & school holidays, along with
Chinese New Year) was followed by a softer February 2020 (Fig.18), and these trends were consistent for all regions (Fig.19 t o Fig.21). At the time of writing the report impacts of the Coronavirus were starting to show, and this will be fully reflective in the March 2020 r eport.

Market Insider Tip:

The near term forward market is softening as a result of the Coronavirus per Fig.18 to Fig21.
However, the weaker international demand during the coming months can be managed using a number of pricing and fleet strategies, such as, domestic & Australian pricing campaigns, and tight fleet management based on
forecasting.
We will be working our customers to assist them with strategies and making best use of the MarginFuel forecast over the coming months.
There is also a trend of later than normal cancellations as customers leave travel decisions to the last minute, along with a high portion of postponed travel. Again, these are modelled in the MarginFuel forecast and have a very
unique trend profile.

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Fig. 18

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Fig. 19

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Fig. 20

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Fig. 21

Forward Market Analysis - Easter 2020

6th April 2020 to 19th April 2020

• For the Easter 2020 season, for all three locations, across all sales channels, there is currently an overall YoY Average Rate decrease of -17% (Fig. 22)
• Auckland Airport is showing a YoY average rate decrease of -10%
• Christchurch and Queenstown Airports are showing an YoY average rate decrease of -16% and -22%
respectively
• The Average Rate across all the sales channels were lower between -13% and -15% (Fig.23)
• The shorter 3-day duration is lower YoY by -18%, while the longer durations are down between -14% and -15% (Fig.24)
• All vehicle categories have a lower average rate of between -11% to -23% (Fig. 25)

Market Insider Tip:

The Easter 2020 season will take proactive,
controlled strategies to ensure tight pricing and fleet management, as we expect there to be a material impact as a result of the Coronavirus.
The severity of the impact for Easter 2020 will be primarily dependant on the containment of the virus in New Zealand and Australia.
Being fully aware of competitor pricing, along with utilising the MarginFuel forecast are key elements in understanding the marketplace,
which will in turn remove uncertainty.

Make sure your fleet mix is correct: traditionally SUVs and 4x4s are very popular in Christchurch.

22

Fig. 22

23

Fig. 23

24

Fig. 24

25

Fig. 25

Methodology & Disclaimer

Methodology:

  • The data was derived from circa. four (4) million datapoints, and this size dataset was deemed large enough to draw reasonable conclusions
  • Inconsistent outlying datapoints were removed
  • The data collected is from 13 individual rental vehicles (a mix of independent, franchise, small, medium and large operators, and thus the data includes the relative mixture of on and off airport operators)
  • The data collected from the 13 rental vehicle operators have been anonymised and aggregated, then displayed to provide a general reflection of the overall market
  • The pickup days included in the data are Tuesdays and Fridays

Terminology:

  • Net Agent OTA: Is an agent who receives a wholesale price from the operator and then marks up that price to the level they want to sell in the market. In New Zealand an example of a Net Agent is RentalCars.com
  • Gross Agent OTA: Is an agent who is paid by commission and sells at an agreed price. In New Zealand an example of a Gross Agent is Airport Rentals

Disclaimer:

This report is intended as a guide only.

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