Tourism Holdings is forecasting a $1 million net loss to break even first half result but has no guidance for the full year.

However, at the company’s annual meeting yesterday, chairman Keith Smith said it would resume dividend payments towards the end of the 2010 calendar year if early signs of improvement continued.

“The recovery curve for the tourism industry is still uncertain,” he said.

“As consumer confidence grows which benefits arrival numbers, we then have to battle an increasing currency and - more importantly – a risk that airlines may start to further cut capacity rather than stimulating demand through pricing, as they have done over the past six to twelve months.”

After the meeting, Mr Smith said Australia had a significant number of A380s operating and increasing overseas airlines, but only Emirates then flew across the Tasman.

Australia-NZ joint tourism push needed.

The Australian rental market produced better than expected revenue for Tourism Holdings, which had made strategic changes towards a rentals-centric business with a tourism-focused division, Mr Smith said.

Core rentals, down 65% this year on 2008, had suffered ongoing cost increases in mechanical parts, servicing, build costs and property costs that were not recovered through yields.

Mr Smith said revenue was targeted aggressively in this area.

He said Australia was providing 45% of the company’s revenue and was an ongoing growth market for the company.

After the meeting, chief executive Grant Webster said there were further growth opportunities in Australia, where there was a greater acceptance of motor home holidays.

Growth in that market reflected its size and the health of the economy, he said.

Mr Webster told shareholders the company had refocused. “We’re a different company than we have been in the past.”

Mr Webster said IT and branding would become important for the business. A new online service would be launched next year, to encourage pre-travel communications with travellers, self-check in facilities and DVD shows.

Kiwi Experience was a good platform to test and strengthen online marketing, he said.

In May, Tourism Holdings cut 64 jobs at Ci Munro and Mr Webster said the company had asked serious questions about the business, which reported an ebit loss of $3.6 million this year.

“It does have a sustainable and strategic position within the business we operate.”

Tourism Holdings reported a "disappointing" $1.4 million full year loss in August.

Its $2.9 million net profit after tax for the year to June 2009 was largely due to the sale of Kelly Tarlton's and Milford Sound Red Boats, along with a joint venture shareholding in InterCity Holdings Limited.

The company’s expectations for visitor arrivals to Christmas were a decline of about 3%, but it was confident about the 2011 year.

Mr Smith said the company's share price (NZX: THL) was volatile over the year, swinging from .95 cents to .40 cents and at .72 cents, was still close to 50% below the net tangible assets of the company.