MOTORCYCLE – EagleRider Expands Rental Operation

Powersports rental enterprise EagleRider, Inc., recently completed two strategic moves designed to make it easier to rent motorcycles, ATVs and watercraft at any of the company’s 33 locations throughout the world: 1) The company signed with Orbitz, a leading online travel Web site; and 2) It entered into a strategic business partnership with Optims-America, a firm tapped to provide technology for a new central reservation system (CRS).
Los Angeles-based EagleRider offers rentals, self-drive tours and professionally guided tours from facilities throughout the United States, Mexico, France and Spain.
Since launching its Web site, www.orbitz.com, in June 2001, Orbitz has become the third largest online travel site based on gross travel bookings. On Orbitz, consumers can search more than 455 airlines, tens of thousands of lodging properties worldwide and 22 car rental companies. Orbitz’s deal with EagleRider allows its online customers to rent powersports vehicles from EagleRider when booking air, hotel and vacation packages to popular destinations around the country.
Through the Optims-developed Magellan CRS, all EagleRider locations and online travel agencies – such as Orbitz – will be connected to a single, real-time reservation system. This, will allow customers from throughout the world to aim their reservation at a specific location.
Optims-America is a subsidiary of Amadeus, a supplier of global distribution systems serving 6,500 customers in 70 countries from 12 offices worldwide.
“We are at a point in our business growth where we need to expand our technology platform to support worldwide distribution through online travel agencies, Global Distribution Systems, and the new emerging travel search engines,” said EagleRider President Chris McIntyre. “By teaming up with Optims, we are enabling our business to grow using their technology platform as the basis for our continued expansion.”
EagleRider started business in 1992 with four bikes in a garage. This year the company plans to buy more than 4,000 units for its worldwide operation.
“We opened eight locations in 2004, plan to open 15 in 2005, and plan to add approximately 15 to 20 more for 2006,” McIntyre told Powersports Business. He said revenues were up 25% last year “and will probably double in 2006.”
McIntyre says EagleRider initially was modeled after the rental car industry, “but we added a tourism aspect to it,” he said. “The big money in the rental business is tourism and recreation – hotels, planning, air flights, etc.”
EagleRider’s primary focus for growth and expansion includes resorts and dealerships, and McIntyre said 60% of EagleRider’s new rental locations will be dealerships while the remainder will be resorts.
“Why dealerships and resorts? Because they already have a running enterprise and overhead,” he explained. “Our business has great growth margins. What would really dwindle down that margin is when you have a stand-alone rental facility that has a short riding season.
“What we bring to the table is connectivity to the travel industry, bookings, A-plus rated insurance for all products in all 50 states, a rental reservation system, and GE financing – because a Honda or Harley finance operation is not going to finance on rolling stock that’s not a part of the floorplan.
“So, when your able to put it into a dealership that already has the overhead – a service department, people, product and storage – you’re looking at a turn-key operation.”
Three things McIntyre said EagleRider looks for in a prospective dealer rental facility are the dealer’s financial strength, location and seasons available.
“Financial strength because we have legal agreement to provide product and service; location because we tend to desire something near a metropolitan area or tourist destination; and seasons because the prospect may need to buffer low motorcycle rentals with higher rentals of ATVs, snowmobiles or watercraft,” he said.
“On the flip side, the first thing dealers want to know is what they’ll get for their franchise fee,” he said. “A lot of people look at a franchise fee as an expense, but it’s not. It’s an asset on their balance sheet. They’re getting a franchise, which means ownership in a business with an exclusive territory.
“The next question usually pertains to our 10% royalty fee. Very simply, that’s for promoting the system and subsidizing the growth of the franchise network. I mean, who wouldn’t pay $10,000 from $100,000 in rentals?”
– Guido Ebert

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