Ngāi Tahu Tourism
Ngāi Tahu Tourism has delivered an Operating EBIT of $5.4 for the FY09 against a budget target of $5.3m. This result has been achieved through yield management and the reductions to controllable costs as a result of the review offsetting falling visitor numbers.
The 2008/09-year unfolded as an extremely challenging one for Ngāi Tahu Tourism with the global credit crisis striking just prior to the start of the traditional busy summer season. As a result of the crisis, many of our key tourism markets including the United Kingdom and the US experienced a sharp loss of confidence and visitor levels slowed accordingly.
In response to the reduced demand we undertook a widespread appraisal of our businesses. Operating costs were reviewed and reduced to match falling revenues. In tandem with the review a major marketing campaign was launched to highlight the unique range of products we have to offer. We are pleased to report that Ngāi Tahu Tourism made some strong gains with its well-established brands in particular Shotover Jet and Franz Josef Glacier Guides.
The developing cluster of businesses within the Abel Tasman region encountered particularly challenging conditions. Achieving a turnaround in performance will be a big task however the business is fortunate to have a committed and talented team who have developed a robust plan for the coming year.
During the last quarter of 2009 we experienced an encouraging surge of customers. In particular the Southern Region has performed well, benefiting from strong Trans Tasman airline competition, favourable exchange rates and an encouraging start to the ski season.
Against a backdrop of struggling performance across the wider tourism industry, Ngāi Tahu Tourism delivered a respectable net surplus of $6.4m.
In November 2008 we opened the doors on the stunning new Hot Pools complex in Franz Josef. Nestled in the unique beech forest environment, the end result has exceeded everyone's expectations and has received overwhelming endorsement from the 20,000 plus customers that have already passed through the facility.
Like all start-up operations however, there is a significant challenge to grow the awareness levels – the current recession has added to this. The business will continue to invest in a comprehensive marketing campaign to ensure that our goals for growth are met.
For the year, overall PAX volumes finished at 92% of the prior year (excluding Hot Pools) and 99% of budgeted levels.
Looking Ahead
The difficult and uncertain conditions encountered over the past year are looking likely to continue into 2009/10 and we have budgeted accordingly. International visitor arrivals into New Zealand over the critical summer months will be the major influence on the Tourism performance over the next year. On a positive note, despite the difficult operating environment our businesses are in excellent shape to respond to future challenges and the environment is likely to create opportunities for strong, long-term operators such as Ngāi Tahu Tourism.
As well as ensuring that our financial performance is maintained through the tough conditions, the next year will see an increased focus on responding to some of the wider shareholder aspirations in the tourism sector including: growing cultural interpretation of our tourism products in collaboration with local rūnanga, supporting a comprehensive cultural tourism project to sit alongside NTT and the completion of the 3rd year of Ngāi Tahu Tourism/Lincoln University scholarships.
