Profits fall as tourists stay away

The high dollar, increased fuel costs and a drop-off in international visitors have led to a 24 per cent fall in Tourism Holdings' first-half profits.

Outgoing managing director Dennis Pickup said the company's tourist attractions and campervan rentals had been under pressure as visitors spent less.

As a result, the company downgraded its after-tax profit to between $14.5 million and $15.5 million for the year. At its annual meeting in November, it had expected annual net profit to be $17 million.

For the half-year ended December 31, net profit fell to $4.2 million from $5.5 million a year ago. Revenue was $82.9 million, down nearly 3 per cent on the previous year.

Pickup, who retires at the end of March after seven years in the role, said the peak tourism season, which once started in December, was starting later each year.

"The peak season has shifted. It seems to be a phenomenon that has affected our coaching business of Johnston's, Great Site and Kiwi Experience," he said. However, bookings to April remained encouraging.

In addition to motorcoach rentals, the company also rents cars and owns well-known tourist attractions such as Kelly Tarlton's Underwater World and the Waitomo Caves.

Overall, Pickup said the tourism sector's long-term outlook remained positive.

Forsyth Barr analyst Rob Mercer agreed, saying there would be a recovery in international inbound visitor numbers over the next 12 months as airlines such as Air New Zealand and Qantas increased their fleets and more routes opened up.

New Zealand Lotteries Commission head Trevor Hall will take over as Tourism Holdings' chief executive in June.

Yesterday, the company restated last year's earnings to comply with International Financial Reporting Standards. Under the new standards, its 2004 profit was $15.4 million.