Latest / Early Edition with Ryan Bridge / Grant Webster: Tourism Holdings Ltd CEO on the impact of Trump's tariffs on bookings in the US division

Transcript

Grant Webster: Tourism Holdings Ltd CEO on the impact of Trump's tariffs on bookings in the US division · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: Net profit will be significantly lower than expected. For one
• 0:03
  Speaker 1: of the first locally listed companies impacted by the US
• 0:06
  Speaker 1: tariff regime, Tourism Holdings Limit, has sent a dramatic slowdown
• 0:09
  Speaker 1: in bookings by its US division. Its share price fell
• 0:12
  Speaker 1: more than ten per cent after announcing it was downgrading
• 0:15
  Speaker 1: its earnings outlook. Tourism Holding's chief executive, Grant Webster, is
• 0:19
  Speaker 1: with me now, thanks for your time, Grant, good morning,
• 0:22
  Speaker 1: good morning. How much is the political issues happening, the
• 0:27
  Speaker 1: volatility to blame for people not buying and renting? Are these.
• 0:33
  Speaker 2: It's pretty hard to get into the psyche of all
• 0:35
  Speaker 2: the individuals, but certainly the tour operators that we work
• 0:39
  Speaker 2: with out of Germany certainly say their customers are saying
• 0:43
  Speaker 2: just not interested in going to the USA at the moment.
• 0:47
  Speaker 1: How big of a reduction have you seen in the US?
• 0:50
  Speaker 2: So look, in recent weeks our booking intakes for the
• 0:54
  Speaker 2: rentals division into the US are down forty to fifty percent.
• 0:57
  Speaker 2: So that's it's obviously prett not quite as dramatic as
• 1:01
  Speaker 2: COVID when borders closed, but it's a big downgrade.
• 1:05
  Speaker 1: So is the slowdown reflected anywhere else?
• 1:09
  Speaker 2: No? In fact, from a consumer confidence perspective on vehicle sales,
• 1:14
  Speaker 2: it is. But in terms of tourism and people actually
• 1:17
  Speaker 2: traveling and wanting to rent our products, all other markets
• 1:20
  Speaker 2: are actually up and probably realistically experiencing some benefit from
• 1:24
  Speaker 2: that USA situation. So people still want to travel, but
• 1:27
  Speaker 2: I'll go somewhere else. Yeah.
• 1:28
  Speaker 1: Yeah, I was going to say that it's not that
• 1:30
  Speaker 1: people aren't traveling, it's as they're choosing to go somewhere else.
• 1:33
  Speaker 2: Yeah. Absolutely, So Canada is probably the greatest beneficiary out
• 1:37
  Speaker 2: of that. You know, similar time frame, similar flight costs,
• 1:41
  Speaker 2: so forth, and so on. So luckily we've got the
• 1:43
  Speaker 2: business there in Canada that can get some benefit from it.
• 1:47
  Speaker 1: So, Grant, how has the company reacted to this? As
• 1:49
  Speaker 1: you mentioned, you know, you've been through this before. We've
• 1:52
  Speaker 1: had the GFC and COVID and things.
• 1:55
  Speaker 2: Yeah, so look, the key thing for us is because
• 1:58
  Speaker 2: that vehicle sales under is down, we basically have to
• 2:02
  Speaker 2: adjust what we buy to replenish the fleet. So we've
• 2:06
  Speaker 2: already got that stock there. We're going to make sure
• 2:07
  Speaker 2: that we manage that well, manage our balance, you well,
• 2:10
  Speaker 2: which is in a good position. So really it's about
• 2:13
  Speaker 2: pulling back on investment. And you know, we're one company,
• 2:16
  Speaker 2: one very small company in the USA terms, and we're
• 2:19
  Speaker 2: pulling back our USA fleet investments significantly. So when you
• 2:25
  Speaker 2: talk about possible recessions in the US and you think
• 2:28
  Speaker 2: about that as one more example, it has to be
• 2:30
  Speaker 2: being felt more broadly across the economy now.
• 2:33
  Speaker 1: But grant, you're not going backwards a You're more just
• 2:35
  Speaker 1: making moves to sort of stay steady.
• 2:39
  Speaker 2: And yeah, around the rest of the world will continue
• 2:42
  Speaker 2: to grow, but in the USA, when you're down forty
• 2:45
  Speaker 2: to fifty percent at the moment in bookings, it doesn't
• 2:48
  Speaker 2: mean that's where we'll end up, because domestic is picking
• 2:50
  Speaker 2: up a bit as well. But you definitely have to
• 2:53
  Speaker 2: reduce your total fleet size and tighten it up. So, yes,
• 2:56
  Speaker 2: the net investment in capital that we have in the
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  Speaker 2: US will go down in the next twelve months as
• 3:03
  Speaker 2: as a result of this situation.
• 3:05
  Speaker 1: How long until you're expecting things to pick up again?
• 3:09
  Speaker 2: All that is, that is a crystal ball that it is,
• 3:13
  Speaker 2: so you just.
• 3:14
  Speaker 1: Worrying about, right, just worrying about today.
• 3:18
  Speaker 2: No, to be to be fair, we are running scenarios
• 3:22
  Speaker 2: and I guess again a little bit like COVID, but
• 3:24
  Speaker 2: but not. It's a very very different situation. But we
• 3:27
  Speaker 2: are running scenarios for the for the medium and long
• 3:30
  Speaker 2: term from a Canada perspective where we're getting impacted by
• 3:34
  Speaker 2: the tariffs because all our vehicles are purchased in the US.
• 3:38
  Speaker 2: We have processes there where the industry is looking to
• 3:42
  Speaker 2: apply for an exemption to the tariffs, so forth and
• 3:44
  Speaker 2: so on. So we've really got a number of things
• 3:46
  Speaker 2: to play out yet.
• 3:47
  Speaker 1: Grant Webster, thank you so much for your time this morning.
• 3:49
  Speaker 1: Appreciated for more.
• 3:51
  Speaker 2: From early edition with Ryan Bridge. Listen live to news
• 3:54
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• 3:57
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