Nov. 30, 2009 – Getting a bang for their euro

By Neil Pascale
Editor
LOS ANGELES — Chris McIntyre sees a side of the industry that is largely hidden from the average executive who is buried in anxiety-ridden levels of inventory and cost-cutting reduction efforts.
That side of the industry? The European traveler’s perspective.
“Coming to America is a gold mine,” said McIntyre, president and one of the founders of EagleRider, the worldwide motorcycle rental company that has capitalized on that European viewpoint.
With the dollar’s weakening, the European traveler’s penchant for taking a motorcycle trip in North America has only strengthened, McIntyre says.
As a result, EagleRider, which has agreements with several high-profile worldwide online travel agencies, has seen its international business increase over 2008, a record-setting year for the privately held corporation.
International sales used to account for about half of the company’s revenue. That percentage climbed to more than 65 percent in 2009, McIntyre says.
Plus, the company is seeing healthy pre-bookings for 2010. That would correlate with a forecast a national nonprofit group recently announced regarding the 2010 travel season. International in-bound travel to the United States is expected to increase 3 percent next year, the U.S. Travel Association reported.
According to the association, the average overseas traveler spends an average of $4,500.
That profit potential is something McIntyre hopes franchised dealers will seriously consider as EagleRider works to significantly expand its U.S. dealer network next year.
“You get them at the beginning and you get them at the end,” McIntyre said of the international traveler that starts their trip at the dealership. “So that’s great for parts, service, accessories.”
Thanks in part to that international traveler, EagleRider is expecting to exceed 50,000 customers this year, which would be at least a 5 percent increase over the prior year.
That’s not to say the global recession hasn’t affected the rental company.
McIntyre says EagleRider has seen domestic rentals reduce — although not significantly at a single digit percentage rate — and international travelers on average have booked fewer days (10) compared to the previous year (12). However, the number of international bookings — from France to Japan to Holland to Russia and other countries — is up compared to a year ago.
“One of the last things to go in Europe, even though the economy is down, is their vacation,” McIntyre said. “There’s a reason they have 4-6 weeks” of vacation annually.
The weakening dollar — a euro was nearing $1.50 in value, 25 cents higher than earlier this year — could further help EagleRider’s 2010 prebookings, which are significantly improved over a year ago.
McIntrye believes the company’s prebooking system is another profit potential open to dealers. He notes EagleRider dealers can e-mail prebooked European riders — who do not always bring their own riding gear — PG&A deals before they arrive.
EagleRider’s dealer network currently consists of about 80 dealers, although only around half of those are franchised dealers. The company, which has its rental insurance available in all 50 states, can provide a number of high-profile OEM motorcycle brands, including Harley-Davidson, Honda, BMW and Triumph. Traditionally, EagleRider provides the brand of rental bikes that matches what the dealer is currently selling. That not only makes sense in terms of providing appropriate service to the rental bikes, but also encourages the dealer’s local riding community to try before they buy new units.
That incentive — plus the option of having a properly serviced used bike to later sell — is something the company will be speaking to franchised dealers about throughout the end of this year and into 2010. McIntrye says the company is hoping to add another 30-50 franchised dealers in the coming year.
Besides adding to its dealer network in its traditional areas — tourist or metro areas — EagleRider also is working to increase the number of dealers who rent outside of the company’s traditional motorcycle market. McIntrye sees plenty of demand for snowmobiles and ATVs in specific markets, including the Midwest.
“We’re very much interested in that market because it offsets the big bell curve” with the weather and the resulting lack of motorcycle riding, he said.
However, EagleRider and its dealer network will continue to rely chiefly on the travel industry, what the U.S. Travel Association calls a $770 billion industry. McIntrye believes the U.S. motorcycle industry is just starting to realize the profit potential of connecting with that multi-billion industry.
“One percent of 1 percent of 1 percent that is a gold mine for all of us,” he said.