Midland critical of tourist promotion

Press, 21 October 1980, Page 31

Midland critical of tourist promotion

Our inability as a country i to effectively promote New ; Zealand as a tourist destination to Australians is prob- ; ably the main cause for the - fall in Australian tourist 1 numbers, says the managing director of Midland Coachlines, Ltd, in his annual report. “Most operators, including the airlines and Tourist and , Publicity Department, spend considerable sums,, in Australia each year on-brochures and spotadic media advertising, but much of this is un- ( coordinated and its effectiveness is weakened through lack of real penetration,” he says. “It is our belief that if the i Government wishes. to acquire the benefits of a 1 buoyant tourist trade, then a worthwhile investment by it through the Tourist and Publicity Department in: a professional promotional programme is urgently needed. Such action would be welcomed by' the providers of tourist plant arid equipment in New Zealand, and.rekindle renewed investment in the future of this vital industry. He- says that Midland is very sensitive to any downturn in the inbound tourist market, which once again failed to produce the level of growth the group is geared to service and which is needed for a healthy spread of business. “The drift in Australian tourist numbers to New Zealand, which has now been evident for four years, continues and from, the high of 155,000 visitors recorded in 1976 this total 1 has slipped to 120,000 in' the year to March 31- ", . However; when referring to the outlook, Mr Jamieson says that Midland is not waiting for (the Government to share in urgent overseas- promotion, arid has taken steps to progress, especially hi Australia which remains the largest potential market. Emphasis on international business, is important, he says, to ensure a balanced portfolio with a firm bgse aided by tourist incentives and supported by a favourable exchange rate he is confident of a reversal of the previous year’s trend. The company blames rising costs and a general downturn in tourism.as factors,in

its drop in operating profit- 1 ability, in the June 30 year. < The chairman (Mr J R. Maddren) says that group re- ' venue increased significantly, but was. insufficient to meet the higher cost of operations. As announced, group net profit rose $51,289 to $524,053. But after $16.3M revenue, compared to 14.3 M last year, pre-tax profit from trading was halved at $412,503 ($854,302). Depreciation took $1,358,037 ($1,596,492). Realised profit on sale of fixed assets of $267,629 (nil) increased the pre-tax profit to $750,748, on which tax required $153,123 ($63,404). Associated companies contributed $54,566 (7’7,011). However, the earning rate on shareholders’ funds rose from 7.3 to 7.9 per cent. The directors are recommending a final dividend of 6 per cent, making an unchanged but tax-free dividend for the year — covered 1.8 times. Mr Jamieson says that the record turnover by the group of $16.3M was accomplished in spite of a downturn’ ’in the inbound tourist market and reflected “improved domestic market share in the rental car operations and a very satisfactory growth factor in the Midland coachlines route services.” The “Love Hertz” campaign resulted in an increased market share of the fly-drive businessman market throughout New Zealand and helped to offset the continuing decline - in -'the demand .for. rental vehicles by hirers from Australia, The Hertz venture ; into selling its own used. rental vehicles from- outlets, in Auckland and ’ Christchurch

has added a further profit centre, Mr Jamieson says. Further developments are planned to expand the growing truck and commerical vehicle market. Despite lack of tourists from Australia, the Tasman Tui Camper operation is confident about demand — after increased marketing of unique six-berth walkthrough units. Considerable progress was made in reorganisation of ufban and short distance coach services in and around Christchurch and two new 60 seat buses are scheduled for completion this month. “Midland’s spread of tour promoter clients generating group tour business from many overseas sources helped to offset the anticipated lack of growth in the Australian market, and if was able to reduce its tour coach fleet accordingly — resulting in record vehicle utilisation.

“Forward bookings are most encouraging,” said Mr Jamieson. The demand for Starlirie'r Magic Bus services is growing, “justifying the allocation of considerable resources . . . _■ The engineering division experienced a declining market for new coaches but registration of new buses to December were the second highest ever. Yet the coachbuilding industry continues to suffer from over capacity and though Midland market share has increased significantly . during the past two years, the highly competitive market means that profit margins -have not been satisfactory.. Mr Jamieson is. more optimistic fbr the current year’s coach building work and also about the panelbeating industry.