Booming tourism numbers pay off

Tourists at Aoraki/Mt Cook (Getty)
Tourists at Aoraki/Mt Cook (Getty)

Have you walked through an airport terminal and noticed how busy it is? Or seen all the campervans that are on the roads?

They are signs of New Zealand's booming tourism sector. Tourism is big business for New Zealand and it is generating strong profits for a range of local companies.     

Campervan rental company Tourism Holdings has lifted its annual profit by 21 percent to $24.4 million, for the 12 months to June 30. It wants to raise its profit to $30 million by 2018.

One factor that it expects will boost its rental business next year is the British and Irish Lions rugby tour in late June and July.

Tourism Holdings' shares have risen 38 percent this year to $3.02.

The airports are booming too, thanks to the growth in visitor numbers from countries like the United States and China.

Queenstown Airport, New Zealand's fourth-busiest airport, says that its passenger numbers rose 18 percent in the past year to a record 1.65 million.

International passenger numbers rose 19 percent to 474,000, with domestic passengers up 18 percent to 1.17 million.

The airport announced a 7 percent decline in full-year profit to $7.8 million, but that included a $2.6 million cost from an unsuccessful tax dispute with Inland Revenue.

Its underlying profit rose 27 percent to $10.5 million, helped by a 27 percent rise in revenue to $31.5 million.

Queenstown Airport launched after-dark flights in May to capitalise on the rise in tourist numbers.

A large number of the people flying into Queenstown transited through Auckland Airport, which owns around 25 percent of Queenstown Airport. Queenstown-Lakes District Council owns about 75 percent.

Auckland Airport is expected to announce an annual profit of $211 million next Monday, up from $176 million from a year ago.

On Friday Air New Zealand will announce its profit result. It could top $600 million, after-tax.

The airline has been boosted by the rise in passenger numbers. It is not just visitors to New Zealand - New Zealanders are taking advantage of the high dollar to head offshore.

Lower fuel costs have also been a help.

But analysts are wondering whether this is a time of peak profits for the airline. Fuel costs are expected to rise and competition is increasing.

American Airlines has partnered with Qantas on the Pacific routes, while Emirates is stepping up its flights and Qatar Airways is also going to start flying to New Zealand.

AirAsia X is flying between New Zealand and the Gold Coast and Kuala Lumpur in Malaysia. China Eastern is flying between Auckland and Shanghai.

This should be good news for passengers looking for cheaper flights. But it will squeeze Air New Zealand's margins.

The airline also faces a resurgent Qantas. The Australian airline is set to announce a profit of around AUS$1 billion on Wednesday. That is quite a turnaround from a loss of AU$2.8 billion two years ago.

The airline has benefited from a rise in passenger numbers, cheaper fuel, cost-cutting and a rise in its ranking for customer service.