Hotel Corporation makes $1.SM profit for year

Press, 20 December 1986, Page 40

Hotel Corporation makes $1.SM profit for year

PA Wellington The Tourist Hotel Corporation made a net profit after tax of 51,460,000 for the year ended September, Parliament has been told.

In the corporation’s annual report to Parliament the chairman of directors, Mr R. W. Stannard, said this was a drop in profit of 10 per cent compared with the previous 18 month period which contained two winter off-seasons. “After an encouraging first six months, trading results for the full year were disappointing,” he said.

“In the six months to September 30 there was a trading loss of $1.9 million.

“Provision has been

made by the corporation for a dividend of $276,000 which is more than twice that of the first dividend paid for the previous trading period,” Mr Stannard said.

After a record year in 1985 in room occupancy, there was a decline this year of 8 per cent. Mr Stannard said the decline was more severe in the second half of the year, particularly at the corporation’s South Island hotels.

“This reduction reflects the severe reduction in Australian visitors; however our experience is at least no worse than that of other operators of tourist facilities outside the main cities,” he said.

Financial success in the

tourist industry could be assured only by high occupancy levels and realistic tariffs. Mr Stannard said repairs and maintenance carried over from earlier years had a substantial effect on trading results. In earlier trading times marginal rates of profitability had not allowed necessary work to proceed.

Increased marketing both within New Zealand and overseas gave grounds for reasonable optimism during summer, but factors beyond the corporation’s control in the off-season made it impossible to predict with any certainty financial results for the next year, Mr Stannard said.