Business

Tourism firm bears pressure of bushfires and coronavirus outbreak

The Australian bushfires and the novel coronavirus outbreak are set to put further pressure on the profit of Tourism Holdings.

The campervan rental and tourism company now expects a full year profit of around $24 million compared with last year's $29.8m.

The company warned last year that weak campervan sales in the US and its investment in a new travel technology business, Togo, were already going to cause a lower profit.

"[There are] Australian bushfires cancellations and forward booking reduction, [and] a forecast reduction in Chinese inbound customers over the next two months due to the coronavirus containment measures," the company said in a statement.

"We continue to assess the impact of these factors and our response."

However, it said there were positive signs in its business, which should lead to a better result in the new financial year.

"New Zealand and Australia have had solid performances in vehicle sales from both a volume and margin perspective. Recent activity in the USA vehicle sales consumer shows has been positive and provides greater confidence of margin and volume recovery."

Tourism Holdings operates the Maui and Britz campervan rentals in New Zealand and Australia, as well as the El Monte business in the United States. It also hs a stake in a company manufacturing and selling campervans.

In addition it has KiwiExperience coach tours, and operates several tourist attractions, including the Waitomo Caves.

An industry analyst, Andy Bowley of broking house Forsyth Barr, expected the company to cut its dividend as well, but said the pressures may not last.

"We believe each of the four issues identified above are temporary, either because of their one-off nature or given depressed cyclical conditions."

This article was originally published on RNZ and re-published with permission.

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