High dollar hurting tourism business

Tourism Holdings Ltd told shareholders at its annual meeting today that the high New Zealand dollar is continuing to hurt its business.

Chairman Keith Smith said that in the annual report the company talked about a softening in the backpacker and United Kingdom markets in particular due to the strong NZ dollar.

A strong NZ dollar makes New Zealand more expensive for international visitors.

"In September and October we have seen further adverse impacts from these factors, on both first quarter performance and in forward bookings going in to the high season."

The Australian dollar has also been high and Smith said the company's Australian business has been the most affected by strengthening exchange rates.

Australians are travelling overseas, the number of visitors from the United Kingdom is down and customers are hiring vehicles for shorter periods.

"Customers have a set holiday budget in their home currency and adjust their destination, length of stay and activities to fit," Smith said.

Tourism operators are discounting in both Australia and New Zealand. The company was trying not to get drawn into this but it was hard to avoid.

The company confirmed that it is forecasting a net loss before tax from its continuing business in the current six months compared to a profit of $1 million last year. It is forecasting a net profit before tax of $5m for the full year, which is down from $6m in the same period last year.

- NZPA