In late 2021, Tourism Holdings Limited ("THL") and its wholly owned subsidiary THL Group (Australia) Pty Ltd, announced mutually agreed plans to acquire Apollo Tourism & Leisure Ltd ("Apollo").

However, a statement of issues published by the Australian Competition and Consumer Commission ("ACCC") in late April flagged concerns that the proposed deal would have a negative impact on competition in the motorised recreational vehicle (particularly rental) market in Australia.

THL is a New Zealand based global tourism company operating a range of tourism related businesses in Australia, New Zealand, the USA and the UK. In Australia, its operations include RV (Recreational Vehicle) rental, sales, and manufacturing. THL's Australian rental brands are Maui, Britz and Mighty Camper.

Apollo is an Australian based tourism leisure company with operations in Australia, New Zealand, Canada, Germany, the UK and Ireland. In Australia its principal activities include the manufacture, rental, sale, and distribution of RVs. Apollo's Australian rental brands are Star RV, Apollo, Cheapa Campa and Hippie Camper.

Both companies operate under the same business model. They manufacture their own motorised RVs, and then rent them out under their various brand names. At the end of their rental lifespan, the vehicles are then sold by the companies through their own sales channels or through dealers.

While there are seven other operators in the RV rental supply market, only two of these operators offer motorhomes as well as caravans. The ACCC also acknowledges peer to peer marketplaces which allow private RV owners to rent out their vehicles – the leading marketplace in Australia being Camplify. Of particular concern to the ACCC, Apollo has a 17.8% shareholding in Camplify, and (dependant on another deal) THL is due a 7% shareholding in the coming months.

Broadly, the ACCC is concerned about the competition implications of the consolidation of Australia's two largest suppliers of rental RVs given that the proposed acquisition would remove THL's closest and largest competitor. In particular, the statement of issues notes that other suppliers lack the scale to present the same competitive constraint that is currently imposed on THL by Apollo. Additionally, the ACCC is concerned that the merged entity's shareholding in Camplify may dampen Camplify's incentive and ability constrain the merged entity.

There is also no current prospect of new entry or expansion from another provider that could compensate for this loss of competition. While small scale entry may be achievable, the ACCC considers that largescale entry or expansion is less likely due to the height of barriers to entry in this market.

The ACCC has invited submissions in response to the statement of issues and intends to make a final decision by 21 July 2022.

The full ACCC statement of issues is available here

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