Grant Webster: Tourism Holdings Ltd CEO on the impact of Trump's tariffs on bookings in the US division

One of the first locally listed companies is seeing the impact of Trump’s tariffs. 

Tourism Holdings Limited has seen a dramatic slowdown in bookings by its US division and is anticipating a “significantly” lower net profit than previously expected.  

Its share price fell more than 10% after announcing it was downgrading its earnings outlook. 

CEO Grant Webster told Francesca Rudkin in recent weeks, the booking intakes for the rentals division into the US are down 40-50%. 

However, he says people are simply choosing to travel elsewhere, and their other markets are actually up. 

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Episode Transcript

Speaker 1 (00:00):
Net profit will be significantly lower than expected. For one
of the first locally listed companies impacted by the US
tariff regime, Tourism Holdings Limit, has sent a dramatic slowdown
in bookings by its US division. Its share price fell
more than ten per cent after announcing it was downgrading
its earnings outlook. Tourism Holding's chief executive, Grant Webster, is
with me now, thanks for your time, Grant, good morning,

(00:22):
good morning. How much is the political issues happening, the
volatility to blame for people not buying and renting? Are these.

Speaker 2 (00:33):
It's pretty hard to get into the psyche of all
the individuals, but certainly the tour operators that we work
with out of Germany certainly say their customers are saying
just not interested in going to the USA at the moment.

Speaker 1 (00:47):
How big of a reduction have you seen in the US?

Speaker 2 (00:50):
So look, in recent weeks our booking intakes for the
rentals division into the US are down forty to fifty percent.
So that's it's obviously prett not quite as dramatic as
COVID when borders closed, but it's a big downgrade.

Speaker 1 (01:05):
So is the slowdown reflected anywhere else?

Speaker 2 (01:09):
No? In fact, from a consumer confidence perspective on vehicle sales,
it is. But in terms of tourism and people actually
traveling and wanting to rent our products, all other markets
are actually up and probably realistically experiencing some benefit from
that USA situation. So people still want to travel, but
I'll go somewhere else. Yeah.

Speaker 1 (01:28):
Yeah, I was going to say that it's not that
people aren't traveling, it's as they're choosing to go somewhere else.

Speaker 2 (01:33):
Yeah. Absolutely, So Canada is probably the greatest beneficiary out
of that. You know, similar time frame, similar flight costs,
so forth, and so on. So luckily we've got the
business there in Canada that can get some benefit from it.

Speaker 1 (01:47):
So, Grant, how has the company reacted to this? As
you mentioned, you know, you've been through this before. We've
had the GFC and COVID and things.

Speaker 2 (01:55):
Yeah, so look, the key thing for us is because
that vehicle sales under is down, we basically have to
adjust what we buy to replenish the fleet. So we've
already got that stock there. We're going to make sure
that we manage that well, manage our balance, you well,
which is in a good position. So really it's about
pulling back on investment. And you know, we're one company,

(02:16):
one very small company in the USA terms, and we're
pulling back our USA fleet investments significantly. So when you
talk about possible recessions in the US and you think
about that as one more example, it has to be
being felt more broadly across the economy now.

Speaker 1 (02:33):
But grant, you're not going backwards a You're more just
making moves to sort of stay steady.

Speaker 2 (02:39):
And yeah, around the rest of the world will continue
to grow, but in the USA, when you're down forty
to fifty percent at the moment in bookings, it doesn't
mean that's where we'll end up, because domestic is picking
up a bit as well. But you definitely have to
reduce your total fleet size and tighten it up. So, yes,
the net investment in capital that we have in the
US will go down in the next twelve months as

(03:03):
as a result of this situation.

Speaker 1 (03:05):
How long until you're expecting things to pick up again?

Speaker 2 (03:09):
All that is, that is a crystal ball that it is,
so you just.

Speaker 1 (03:14):
Worrying about, right, just worrying about today.

Speaker 2 (03:18):
No, to be to be fair, we are running scenarios
and I guess again a little bit like COVID, but
but not. It's a very very different situation. But we
are running scenarios for the for the medium and long
term from a Canada perspective where we're getting impacted by
the tariffs because all our vehicles are purchased in the US.
We have processes there where the industry is looking to

(03:42):
apply for an exemption to the tariffs, so forth and
so on. So we've really got a number of things
to play out yet.

Speaker 1 (03:47):
Grant Webster, thank you so much for your time this morning.
Appreciated for more.

Speaker 2 (03:51):
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