Tourism Holdings Plans to Cut Back Rental Fleet
In an effort to improve its results from the “financially unacceptable” year it had to June, Auckland, New Zealand-based motorhome rental and tourist attraction operator Tourism Holdings is looking at new ways to improve business.
According to Stuffco.nz, the company, which operates Waitomo Glowworm Caves and several motorhome brands in Australia, New Zealand and the United States, plans to reduce the number of vehicles it owns.
It is also creating new marketing campaigns targeting Asian tourists and is considering reducing the number of brands in its campervan portfolio.
Tourism Holdings earlier reported a $27 million net loss after tax for the year to June compared with a $5 million profit a year earlier.
At its annual meeting in Auckland, CEO Grant Webster said having too many vehicles on its books here and was one of the main reasons for the company’s poor performance for the year to June. It had ambitiously increased its fleet in November 2009 when bookings indicated business would be strong, but performance turned out to be flat. It hopes to sell at least 5% of its fleet in the financial year, ending June 2012.
“The difference is depreciation where the increase was the biggest impact to the result … more larger vehicles which obviously cost more and excess fleet to requirements have been the driver of the increased depreciation costs,” Webster said. “Depreciation for Tourism Holdings is a real cost and reflects the need to rotate fleet just as a retailer rotates stock.”
In the year ahead, it is reviewing the campervan brands in its portfolio. Those brands in New Zealand are higher end Maui, family brand Britz, Back Packer and Explore More. Stuffco.nz that the Explore More brand, targeted at youth, has been struggling the most.
“We will review our Backpacker and Explore More brands over the next year … They may be consolidated,” Webster said.
The company has created some new marketing initiatives to boost business, including school holiday tours of the Waitomo Glowworm Caves for children, and its bus tour group Kiwi Experience is soon to launch a new package for the Asian market in New Zealand.
It is also looking at ways to increase the popularity of its motorhome rentals with Asian markets both in New Zealand and in Australia.
The board announced that it would resume paying dividends and will confirm at the half-year results a 2-cents-a-share payout next April.
Chairman Keith Smith said results for the first half of the financial year were likely to exceed by $1 million its forecast earnings before interest and tax of $9.2 million.