Apollo Tourism and Leisure expanding overseas
Apollo CEO Luke Trouchet in Brisbane. Picture: Lyndon Mechielsen
The Apollo Tourism and Leisure group will pursue further expansion in the US and look at future moves into Europe and Britain as chief executive Luke Trouchet pursues the goal of making Apollo the first global rental van brand.
This week Apollo took 100 per cent control of CanaDream Corporation, one of the largest RV rental and sales companies in Canada, giving it 14 North American rental locations with a fleet of 1700 rental vans. It previously owned 20 per cent of the CanaDream business.
Apollo has about 10 per cent of the motorhome rental market in the US and recently opened rental outlets in New York and Orlando, Florida.
“Much like Avis and Hertz are global car rental brands, we want to be the first global rental van brand. Within a decade we would like to realise that ambition,’’ Mr Trouchet said.
He said Apollo could easily double or even triple the number of its American locations given the demand in the US.
“We will do that slowly over time. More broadly we are looking at what opportunities are there elsewhere around the world. Is Europe and the UK an opportunity? That is a longer term vision,’’ he said.
“It is the next step for us if we were to open up in an overseas market. It is something we are investigating.’’
As in Australia, most of the international inbound business for the US rental van market comes from Europe and Britain. Americans generally buy rental vans or motor homes rather than renting them.
The Brisbane-based Apollo, which was founded by Mr Trouchet’s parents Gus and Carolyn Trouchet, listed on the ASX last year and the shares have remained consistently above their issue price of $1. They closed yesterday at $1.40.
The Trouchet family still owns more than half the shares on issue, while the remaining shares are split between retail investors and institutions such as Colonial First State, Bennelong and BT Investments.
The company has a fleet of 3000 vehicles across Australia, New Zealand and the US and continues to build about 800 rental vans each year at its Brisbane manufacturing facility. It is now looking for an additional site to meet demand and has resisted the temptation to shift manufacturing offshore.
“The biggest cost part of building a motor home is the actual materials, not the labour. The caravan motor home industry in Australia is thriving. It is a craftsmanship-type of product rather than one where you use robotics and heavy machinery,’’ Mr Trouchet said.
“Manufacturing of camper vans and motor homes certainly isn’t dead in this country.’’
Recognising the seasonal nature of the business, Apollo has adopted a “dynamic fleet” model in the US where it can scale its fleet up and down quickly.
It plans to do the same in Australia by introducing a new product based on a Mercedes van that has a rooftop kit.
‘’We are not cutting poles into the Mercedes and putting in a permanent conversion. Rather it is a kit that you can remove and add in. So instead of us being stuck with lots of vehicles when it is quiet, we can be stuck with less under this model,’’ Mr Trouchet said.
Apollo has also acquired a 25 per cent stake in online caravan and RV sharing group Camplify, known as the “Airbnb of RVs’’, which has a peer-to-peer community that connects caravan and RV owners with people looking to rent them.
“That whole digital space is really important to us. We don’t know how successful it will be but we thought it was too big a risk and opportunity not to be participating in the shared economy,’’ Mr Trouchet said.
“We are not a start-up company — that is why we invested in one which has the right culture and street smarts. They have a strategy of taking their platform to overseas countries. So we will be doing our overseas expansion through them.’’
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