Southern Travel issues profit warning

Tourism company Southern Travel Holdings today said profits for the six months to December could fall "as much as 80 per cent" as fewer Japanese tourists were visiting Australia and New Zealand.

A November 21 board meeting noted that while the total Japan outbound market declined about 2.5 per cent for July/September, numbers travelling to New Zealand dropped 9.5 per cent.

There was also a 3 per cent decline in Japanese tourists travelling to Australia.

"Forward projections indicated further declines are expected on the previous year," chairman Ross Keenan said.

Major contributors to the fall were a reduction in available air capacity, the continuing high New Zealand dollar, and wide media attention to security threats and bird flu.

He said on current forecasts, profit for the first six months could be as much as 80 per cent below the same period last year.

Southern Travel is a New Zealand and Australian inbound tour operator which organises customised tours for visitors -- mainly Japanese tourists.

The company sells its tours through more than 100 travel wholesalers in Japan.

Three-quarters of its revenue comes from New Zealand, with the balance originating in Australia.

Southern Travel's shares were flat on 76c this afternoon after selling between 130c and 60c during the last year.

- NZPA