An increase in the number of Australian tourists has underpinned the sector and helped tourist operator Skyline report an improved annual result for the year ended March 31.
Revenue was up $3 million on the previous corresponding period (pcp) to $55.6 million and expenses were similar at $34 million, giving an operating profit before tax of $16.5 million ($10.9 million pcp).
Cashflow was also $3 million higher at $24.4 million and the board has determined a final dividend of 32c a share, up 10c a share on the pcp.
Earnings per share almost doubled, from 27c pcp to 45c.
Chairman Ken Matthews said international tourist numbers recovered towards the end of 2009, which was illustrated by a noticeable increase in visitors using Skyline's Queenstown and Rotorua gondolas.
The performance of Skyline's three casino investments in Queenstown, Dunedin and Christchurch was mixed compared with the previous year.
Visitors to Skycity Queenstown were boosted by promotions, but expenditure per visitor was down, resulting in a drop in revenue and net earnings on the pcp.
The operational performance of Dunedin Casino improved slightly, but costs were under review and entertainment alternatives were being looked at, Mr Matthews said.
Profits from Christchurch Casino were down on the previous year, reflecting a difficult trading environment and while visitor numbers were up, average expenditure was down.
Mr Matthews said the economic environment had changed travel patterns and short-haul travel was preferable for many people.
Looking ahead, Mr Matthews said the domestic-reliant Rotorua businesses might struggle to grow until that market improved, but Queenstown was budgeting for growth because of an expected lift in international tourist numbers.
Chief executive Jeff Staniland said the Queenstown accommodation market remained competitive, and occupancy at the company's lodge and apartments continued to decline during the year, but the occupancy rate was above the sector average.
Occupancy at its Mercure Lodge in Dunedin was relatively stable.
During the year the company opened its new retail and office block at 24 Rees St in Queenstown, which was completed on time and within budget.
The retail level was fully occupied, albeit at rental levels lower than initially anticipated, but competition meant first-floor office space was proving more difficult to let.
Australia and Asia appeared to have weathered the economic recession well, which would be the focus of Skyline's immediate business, while increased airline capacity to Queenstown would help, Mr Staniland said.
The focus for the business would be on leveraging assets to utilise capacity and improve yields, while Skyline was still looking for domestic acquisitions and internationally for development sites, he said.
The operating profit before finance costs was $17 million ($13 million pcp), with the total comprehensive income for the year $13.9 million compared with $3.75 million in the pcp.
Equity increased during the period under review from $145 million to $151 million.
Higher retained earnings and reserves were offset by lower investment property valuations.
Mr Matthews paid tribute to Barry Thomas, who has retired after 33 years' association with the Skyline board, saying his leadership, initiative and acumen had contributed to the company's success.
