Local travellers not enough
Tourism Holdings has flagged a bigger full-year loss than the market is predicting, as local demand fails to completely fill the gap left by international tourists.
The NZX-listed business, which specialises in campervan hire and adventure tourism and makes recreational vehicles, was hit hard by the closure of New Zealand’s borders.
Despite a campaign by the tourism industry to encourage Kiwis to explore their own country, the company said demand in November and early December – outside the school holiday season – indicated that its summer high season would be weaker than usual.
Travel in the late January to March period was ‘‘now expected to be lower than originally anticipated’’, the company told the NZX. Shares in THL fell 17c or 6 per cent to $2.37 on the news.
While it was too early to predict a full-year result, THL said, it seemed likely that the loss would be wider than the average the market was currently expecting.
Forecasts by selected analysts have put THL’s average net loss at $12.8 million. The company made a net profit of $20m in 2020, 30 per cent lower than the $29.8m in 2019.
Chief executive Grant Webster said the company’s finances were sound as it eagerly awaited the opening of a trans-Tasman travel bubble.
‘‘Our balance sheet is very strong. We’ve reduced debt significantly during this year through the sale of motorhomes, so we’ve got a very strong equity position.
‘‘We haven’t conducted an equity raise, probably one of the very few tourism companies in New Zealand or Australia that hasn’t.’’
Webster said the company continued to reinvest in the business to ensure that it was ready for recovery when travel restrictions were loosened. He was still hoping that would be late summer to autumn.
THL’s largest losses are expected to come from the New Zealand side of the business, which is heavily reliant on international tourism.
One bright spot had been its campervan manufacturing arm, which had enjoyed a number of record sales months.
Webster said the issue was that Kiwis tended to go on holiday over a narrow period of time. ‘‘The Christmas-New Year period’s busy, as you would expect, but when we look at forward bookings into . . . those periods that aren’t school holidays, those periods when they don’t have public holidays in them, they’re certainly quieter than what we anticipated.’’