US expansion helps Tourism Holdings Ltd to record $30m profit

Tuesday, 22 August 2017

Booming motorhome rentals at home and overseas have contributed to Tourism Holdings Ltd's record $30m annual profit.

Higher than expected local rentals resulting from the Lions tour, a better shoulder season, and expansion in the US all contributed to the 24 per cent increase in net profit.

Just over half of the Tourism Holdings' annual profit came from its New Zealand motorhome rentals and sales.

The company reported revenue of $341m for the year to June, and paid a dividend of 11c per share.

THL chief executive Grant Webster said the Lion's tour added about $500,000 in profit and there would be a flow on effect into the next financial year which was shaping up to show a forecast profit of between $36 and $39m.

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Just over half of revenue for 2017 came from New Zealand, with about 20 per cent from the US and the remainder from Australian and the UK.

THL's US operation is now almost as large as its local rental fleet of 2200 vehicles, making it number two in the American rental motorhome market.

The company's foray into the US began in 2010 with the purchase of rental company Road Bear.

Late last year it bought Californian motorhome sales and rental company El Monte and Roadtrippers, a US travel app company which has 2.5 million active users and is roughly the equivalent of CamperMate here.

Webster said sales of El Monte's older fleet provided a much higher return than expected and he is predicting strong growth in a market where bigger is most definitely better.

'Our largest vehicle [in New Zealand] barely gets to the smallest vehicle in the US.

'On a New Zealand driver's licence you can go to the US and drive something that's the size of a standard bus here.

'When you first hop in them they feel large, but you're next to other very large vehicles on very large roads,' said Webster.

THL is continuing to promote Mighway, a peer-to-peer operation allowing motorhome owners to rent out their vehicles when they're not using them.

More than 500 Kiwi owners have signed up so far and Webster said Mighway had paid them over $1m last year .

Mighway was also successfully launched in the US in May.

'The key is getting owners on board and having fleet to rent, it's had a much faster start than we did in New Zealand..

'We see Australia, Europe and the UK as Mighway opportunities in time,' Webster said.