Weak campervan demand makes Tourism Holdings worst-performing stock

Tourism Holdings is the worst-performing stock on the NZX50 this year, down 47 percent, as an economic downturn and slower tourism markets weigh on demand for its campervans.
Its shares took a major hit on May 6 after the company warned two months from the end of its financial year that profit would be a third lower than it had previously forecast.
Analysts took a knife to their forecasts and investors wiped more than $200 million off the company’s value in a single day.
“It was quite a sizeable profit warning,” said Forsyth Barr head of research Andy Bowley. “That really reflected quite a slowdown in people buying either second-hand or new RVs [recreational vehicles].”
Auckland-based Tourism Holdings is the world’s largest campervan rental and sales company with operations in New Zealand, Australia, the US, the UK and Canada.
Its business took a hit during the Covid-19 pandemic when international tourism dried up, and travel hasn’t yet fully recovered. And tough economic times are compounding that, with people less likely to spend on non-essentials. 
The company is selling campervans through its New Zealand RV Super Centre retail chain for prices ranging from $49,990 for a 2018 two-berth Kea motorhome in Christchurch to $194,990 for a 2023 four-berth Italian-designed Laika motorhome in Mangere.
Bowley said the tougher economic environment was making it harder to get those sales over the line.
“When times are tough, you’re going to focus on the staples, and you’re not going to buy very discretionary items such as RVs or boats or other big toys that you’re quite happy to wait for,” he said.
Like any retailer, Tourism Holdings was limited in what it could do to entice customers into its stores, he said.
“In tough times, you do drop the price a little bit, but the reality is that these products are relatively inelastic, so you can drop the price by a certain amount, but you don’t actually sell many more vehicles.
“If you’ve got a $100,000 motorhome, if you drop the price to $95,000, guess what, you don’t actually sell many more vehicles. People aren’t stumping up any cash for those kind of toys.”
The company sold 333 campervans in New Zealand over the last financial year, lagging behind the 600 it would expect in a normal year. In Australia it sold 2493, compared with more than 2800 expected under normal operating conditions. In the US it sold 667, down from the 800 it would expect in a normal year. 
Bowley said the outlook for the company was largely dependent on the broader economic cycle.
When reporting its annual result in August, the company warned bookings had slowed, which indicated it would take longer than initially expected to return to pre-Covid levels.
In response, it has pulled back its fleet expansion plans for the coming year.
Tourism Holdings hasn’t provided guidance for its 2025 profit, although it has said it expects it to be higher than the $52m underlying profit it reported in the latest year to the end of June. 
However, it has withdrawn its previous goal to achieve profit of $100m in 2026.
“The economic climate in the key markets of New Zealand and Australia, and more broadly overseas, have deteriorated more than anticipated when we set this goal, and in our view makes achievement of this goal by FY26 unrealistic,” the company said. 
Though it still expects to achieve $100m of profit, the prevailing economic conditions and persisting uncertainties meant it was inappropriate to set a precise timeline for reaching the goal, the company said. 
The company’s shares were trading at $2.03 on the NZX on Wednesday, down from $3.80 at the start of the year.