Mon | Oct 22, 2018

Island Car Rentals expanding fleet amod growth streak

Published:Wednesday | April 15, 2015 | 12:00 AM
Michael Campbell, chairman and managing director of Island Car Rentals.

Citing rising demand, Island Car Rentals will be upgrading and increasing its fleet of vehicles this year at

a cost of about US$5 million (J$575m), says Managing Director Michael Campbell.

Island had turnover of more than $1 billion in 2014, with projections of an increase this year, based on planned marketing programmes, said Campbell.

"It's definitely going to improve by at least 15 to 20 per cent. We are going to get what we need in terms of vehicles, but it's the whole reputation of the company, the marketing, financing, rationalising of the fleet, the whole management of the company" that will drive the additional business, he said.

Since 2010, the company has moved from an average of 700 vehicles to an inventory of 1,200. Based on demand, said the MD, an additional 100 vehicles are needed.

"It's a nice problem to have. My staff keeps telling me we need 100 more cars," he said.

The company intends to purchase 200 vehicles, twice the number needed, some of which will replace older models that are culled from the fleet annually. Island also added 200 units in 2014, the chairman said.

"We have the business. What do you want us to do? Turn it down?" said Campbell - a comment that seemed directed somewhat at the company's bankers.

"We have to deal with our banking financiers and show them that the business is there and we can capture it and their investment is safe," he added.

Owned by Campbell and Derek DeMercado, Island has been in operation for 47 years. The company targets international travellers, including budget travellers who use the price of rentals to determine where to stay. It offers rentals of vehicles and provides other services such as chauffeurs, bus transfers and tours through a fleet of vehicles ranging from economy-sized sedans to luxury SUVs and buses. Campbell says small cars are more popular, especially among travellers on a fixed budget.

"The typical traveller has probably saved for two or three years for his one- or two-week vacation and is using a budget," he said.

Rental rates for vehicles vary per vehicle type and season, with Campbell noting that prices also track with other markets.

"We look at the rest of the world and see what they are doing. We have to match them," he said.

transport cost

The typical budget traveller counts his pennies very closely to stay within budget, but Europeans, who fly for about nine hours to get to Jamaica, tend to plan longer holidays and rent cars for longer periods than other visitors.

"The truth is that we compete against the rest of the world. They don't have to come to Jamaica. If somebody goes on the Internet and finds a lovely villa at a certain price ... if ground transportation is too expensive, then they are going to Mexico, or St Martin, or Miami, or Phuket, or Spain, or they are going somewhere else," said the car-rental executive.

"Our competition is not in Jamaica. Our competition is the world. With the Internet, the world has shrunk and people have choices."

Its marketing programme includes both a direct focus on the company itself and generic marketing that features Jamaica.

Island earns 85 per cent of its income from hard-currency markets and 15 per cent from locals.

With that mix, Campbell says he has been resisting pressure from local brokerages to list on the Jamaica Stock Exchange. His current focus, he said, is possible expansion into Caribbean markets based on other pressure from travel agents who say Island should replicate its customer model in the region.

The company's reputation in its markets has been buttressed by annual recognition from World Travel Awards for the last four years in which it was selected as Jamaica's leading car-rental company. For 2014, it was also named the Caribbean's leading indepen-dent car-rental company.

"How that works is a little different from the others. With the World Travel Awards, they nominate the companies that they think around the region are the best. Then they put it up on their website. It's the actual industry professionals and general public that use your facilities who vote for you," said Campbell.

Island Car Rentals claims top spot among 29 local companies, some of which operate with fleets as small as 10 to 20 cars. Rental agencies are licensed by the Tourism Product Development Company (TPDCO).

"If you take all the multinationals in Jamaica and add them together, we are bigger than that," said Campbell. "Our biggest competitor is ourselves - we are looking to outdo ourselves from the previous year," he said.

The company is based in New Kingston but also operates from Norman Manley International Airport in Kingston and Sangster International Airport in Montego Bay.

It also runs maintenance and administration facilities at Ironshore, Montego Bay, and used-car sales locations at Haining Road and Worthington Avenue in New Kingston.

The company currently employs about 250 staff, up from 100 in 2010.