Stay-home Germans slash van revenue

By SIMON HENDERY tourisim writer

Tourism Holdings' Australian business has fallen victim to a German invasion that never happened.

New Zealand's largest tourist company has been left licking its wounds after German tourists decided last year to stay home in droves rather than venture down under.

THL is due to announce its half-year result tomorrow. The company has already foreshadowed a drop in profit, which it blames on a slump in the Australian side of its business.

It has revised its full-year profit forecast for the year to June down from $21 million to between $14 million and $16 million after Australian earnings before interest and tax fell 30 per cent in the six months to December.

New Zealand earnings - accounting for about 65 per cent of the company's business - were up 3 per cent during the same period.

Chief executive Dennis Pickup said the company's Britz and Maui campervan operations were down 11 per cent in Australia while in New Zealand they were up 8 per cent on last year.

The Australian drop could be attributed to a 19 per cent drop in the number of Germans arriving in the country during the peak December period, Mr Pickup said.

German travellers, who make up 20 per cent of THL's Australian rental clients, shied away from travelling to Australia last year. Many were put off travelling overseas by the weak value of the euro, while those who had ventured out steered clear of the Sydney Olympics crush.

Mr Pickup said that as an essentially fixed-cost operation, the campervan business was particularly susceptible to falls in customer numbers.

"When you get the volumes you make a lot of money and when you don't hit your volumes you haemorrhage the other way."

The Olympics and the price rises associated with the introduction of GST also discouraged Australians from jumping in a campervan at home, but probably contributed to New Zealand tourist numbers.

Among THL's New Zealand subsidiaries, business at the Waitomo glow worm caves was up 15 per cent, Auckland's Kelly Tarlton's attraction saw 10 per cent more visitors and Red Boat Cruises' numbers at Milford Sound were up 20 per cent.

Backpacker bus network Kiwi Experience was also significantly up, while its Australian sister company, Oz Experience, was down.

Mr Pickup said New Zealand earnings were hit by bad South Island weather, a poor ski season and a rise in fuel and maintenance costs owing to the weak New Zealand dollar.

But long term, he hoped the low value of the local currency would encourage more Northern Hemisphere visitors seeking a value-for-money holiday.

After a period of consolidation, during which it sold 24 business units and acquired Britz, THL's main aim is to streamline its merged Maui and Britz operations.

"We won't be looking at any new acquisitions until we've bedded in the Britz and Maui integration," Mr Pickup said. "We're not getting diverted away from our existing businesses. I'm comfortable with the businesses we've got. We've just got to lift their operating and financial performances."