New Zealand Rental Vehicle Market Insights Report

October 2019

12th Edition

Issued 1st November 2019

www.marginfuel.com Introduction

Herewith MarginFuel’s eleventh edition of the “ Rental Vehicle Market Insights Report”.

The report summarises the Average Market Rate# (average rate) of the New Zealand Rental Car Market, with a focus on the most popular Vehicle Categories^ from New Zealand’s three major airports*, being , and Queenstown. The report is split into three sections: • Section 1 Current month analysis; overall the average rate was down year on year (YoY) • Section 2 Year to date (YTD) analysis; average rates were flat over past two months • Section 3 Forward market analysis; average rates continue to show softness from November to mid-December 2019

Please do not hesitate to get in contact to discuss the Report, or your pricing requirements.

Thanks, The MarginFuel Team

Notes: ^ Underlying car type (make & model) data was mapped to commonly used car categories, being SUV, Intermediate, Compact and Economy, using the internationally recognised SIPP code mapping table * All three (3) airport locations include aggregated data for both domestic and international rental kiosks, however, no delineation has been made between Domestic and International rental vehicle customers ~ Average Rates referenced in the report are NZD ~ Average Rates are reported as Gross Rates and include GST and Compulsory Fees & Charges (generally; Airport Fee, Admin Fee) ~ Average Rates also include a base/basic level of Insurance www.marginfuel.com 2

New Zealand Rental Vehicle Market Insights Report October 2019 SECTION 1 CURRENT MONTH ANALYSIS

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New Zealand Rental Vehicle Market Insights Report October 2019 SECTION 1 – Current Month Analysis OCTOBER 2019 Year on Year (YoY^) Average Rate Change Movement

• For all three locations, across all sales channels, the average rate was lower YoY • The average rate for (AKL) -10% lower versus prior year • (CHC) average rate was -3% YoY • Queenstown Airport (ZQN) average rate was -1% YoY

Fig.1

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^ YoY is same month 2018 versus current month 2019 New Zealand Rental Vehicle Market Insights Report October 2019 SECTION 1 – Current Month Analysis OCTOBER 2019 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 was the trend in prior months, the average rates for the shorter 3-day duration remains strong.

Fig.2 Fig.3 Fig.4

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New Zealand Rental Vehicle Market Insights Report October 2019 SECTION 1 – Current Month Analysis OCTOBER 2019 Auckland Airport YoY Summary

Overall Auckland Airport had a YoY average rate decrease of -10%. Rentalcars.com sales channel average rate was flat, while Airport Rentals and the direct channels showed decreases of -17% and -13% respectively (Fig. 5). The average rate for 3-day duration decreased -4% , while the average rate for longer 7-day was -10%, and 14-day duration -17% (Fig. 6). The average rate for SUV’s in Auckland was -11% YoY, with all other categories showing average rates of between +2% and -8% (Fig. 7).

Fig.5 Fig.6 Fig.7

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^ YoY is same month 2018 versus current month 2019 New Zealand Rental Vehicle Market Insights Report October 2019 SECTION 1 – Current Month Analysis OCTOBER 2019 Christchurch Airport YoY Summary

Overall Christchurch Airport had a YoY average rate decrease of -3%. Rentalcars.com sales channel showed an average rate increase of +3%, while Airport Rentals and the direct channels showed decreases of -12% and -4% respectively (Fig. 8). The average rate for 3-day durations increased +2%, while the average rate for longer 7-day and 14-day durations were lower by -5% and -10% respectively (Fig. 9). The average rate for SUV’s was down -4%, with all other categories showing average rates of between +1% and -8% (Fig. 10).

Fig.8 Fig.9 Fig.10

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^ YoY is same month 2018 versus current month 2019 New Zealand Rental Vehicle Market Insights Report October 2019 SECTION 1 – Current Month Analysis OCTOBER 2019 Queenstown Airport YoY Summary

Overall Queenstown Airport had a YoY average rate decrease of -1%. The rentalcars.com sales channel showed an average rate increase of +6%, while Airport Rentals and the direct channels showed decreases of between -16% and -4% respectively (Fig. 11). The average rate for a 3-day duration decreased -2%, while the average rate for longer 7-day and 14-day flat and -4% respectively (Fig. 12). The average rate for SUV’s was down -2%, with all other categories showing average rates of between +8% and -4% (Fig. 13).

Fig.11 Fig.12 Fig.13

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^ YoY is same month 2018 versus current month 2019 New Zealand Rental Vehicle Market Insights Report October 2019 SECTION 2 YEAR TO DATE (YTD) ANALYSIS

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New Zealand Rental Vehicle Market Insights Report October 2019 SECTION 2 - Year to Date (YTD) Analysis July to October 2019

• Average rates were consistent in September and October 2019 (Fig.14) • As is the trend in October 2019, average rates flatted or declined, with the average rate for Auckland Airport dropped -10% YoY

Fig.14

Fig.15 Fig.16 Fig.17 www.marginfuel.com 10

New Zealand Rental Vehicle Market Insights Report October 2019 SECTION 3 FORWARD MARKET ANALYSIS

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New Zealand Rental Vehicle Market Insights Report October 2019 SECTION 3 – Forward Market Analysis November 2019 to February 2020

Overall average rates remain soft the coming month (Fig.18). The average rates begin to build from mid-December 2019, and are very strong over the Christmas/New Year season from 23rd December 2019 to 5th January 2020 (Fig.19 to Fig.21).

Market Insider Tip:

November 2019 is looking soft compared to last year.

As noted in previous reports, rates will require active management. Targeted campaigns, pricing specials and channel distribution strategies will also help move inventory.

Fig.18 Fig.19 However, fleet management should be paramount as you do not want to left under fleeted in key summer markets, mainly Auckland.

Fig.20 Fig.21 www.marginfuel.com 12

New Zealand Rental Vehicle Market Insights Report October 2019 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 vehicle (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 has 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

Disclaimer: This report is intended as a guide only

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New Zealand Rental Vehicle Market Insights Report October 2019