Vacation cautious

Press, 18 July 1980, Page 16

Vacation cautious

At $590,996. group tax-, paid profit of Vacation! Hotels, Ltd., for the six! months ended April 30 is} marginally ahead of the taxi paid profit of $588,490 for| the same period of the previous year. . . Costs rose 5.4 per cent, leaving pre-tax profit ahead of the period by 5.8 per cent. “It is difficult at this stage, and particularly in this year, to forecast the tax provision accurately as depreciation allowances chargeable in the current year will depend to a large extent on completion dates of various states of our building programme; the tax provision may well prove to be over - generous,” the directors say in their halfyearly report. “We anticipate a continuation of normal steady trading during the next six months with some improvement possible in the South Island if ski-ing conditions return to normal-. In the last two years occupancies in Queenstown in the winter months have been adversely I affected by poor snow. | “The building of an additional 90 rooms at Logan i Park is proceeding on schedule, and these rooms should be ready for occupation about Fecember. The Rotorua development is also on target but completion is not expected until the end of 1981. Referring to the tourist industry generally, the directors say that despite an improving profit position, there is still no indication of the

tourist boom still talked about in uninformed circles. “Hotel occupancies in the Auckland area remain sluggish, and with new developments just completed and in course of construction, there is little likelihood of any desperate shortage of hotel rooms in Auckland in the foreseeable future —if indeed there ever has been one. “The decisions of responsible institutions, after full investigation, not to proceed with hotel developments in Auckland must surely serve as a warning to those who seem determined to proceed with the erection of still further hotels there, whatever their feasibility’. “At 171 per cent a year the current rate being charged by the DFC on advances for hotel construction) and based on a room cost of $65,000 (which is conservative) and an occupancy of 65 per'cent, a daily tariff of $4B is required to cover normal' operating expenses and overheads! Expansion of : these terms is very difficult to contemplate. ' “The fact that there is little growth in New Zealand tourism cannot be blamed on a shortage of hotel rooms in Auckland, but rather on the ability of the international airlines to attract tourists here. This ability at the present time is circumscribed bv airline tariff polices, and until there is some alteration in these we can see no marked increase in inbound tourists,” the directors say: