Skyline calls for caution at AGM

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Skyline chairman Ken Matthews had some home truths for shareholders at last Saturday’s AGM in Queenstown.

Despite his big group’s 25 per cent profit increase and a boosted dividend, Matthews’ cautionary comments could easily apply to Queenstown Inc generally. 

“There’s no avoiding the impact the global financial crisis is having on travel patterns,” Matthews warns. 

“New Zealand tourism is noting a slowdown in airline route development, mainly out of Western economies.” 

While there is some respite from improving Asian and Australian routes – by Jetstar in particular – NZ’s relative isolation means our visitor market can’t expand without more air capacity growth, Matthews says. 

Matthews warns NZ tourism not to think the future will be “a linear extrapolation of the past” where growth continues to be automatic. 

“That’s simply dreaming, it’s not going to happen,” he says. 

While China provides “the single biggest opportunity”, its budget tours are North Island-orientated. 

“They tend to go as far as Rotorua then back to Auckland and a lot of activities are focused on shopping rather than the scenic wonders of our country,” Matthews says. 

Achieving value from the China market means targeting its rising middle-upper class, who are more likely to be free independent travellers (FITs). 

“They stay longer and spend more,” Matthews says. 

Skyline is identifying trends and embracing them – customised ethnic dining options and night-sky viewing at the Queenstown gondola are two examples he gives. 

After the AGM, Mountain Scene asked Matthews how he’d hypothetically counsel Skyline’s senior managers on the financial year ahead. 

“We seem to be getting through reasonably well but don’t lose sight of your position in the market,” he says. 

“Ensure customers receive great value from the experiences you offer – and with expectations ever increasing, you’ve got to have the products and services to meet visitors’ demands.” 

Disclosure: The writer is a Skyline shareholder