Southern Travel Holdings expects profit to drop 80 per cent for the six months to December due to a slump in Japanese tourist numbers, a downturn the tour company likened to the Sars outbreak.
"The six months would be, possibly in my memory, very bad, possibly one of the worst- as bad as Sars," said managing director Kiyomi Gunji.
Southern Travel, a New Zealand and Australian inbound tour operator which caters to Japanese tourists, has been severely affected by the decline.
The number of Japanese travellers to New Zealand fell 9.5 per cent from July to September compared with a year ago. Company data also showed that 3 per cent fewer Japanese visited Australia compared with 2004 figures.
Gunji blames the dip on the high dollar, media reports about bird flu, the threat of terrorism in Australia and a reduction in airline capacity.
Japanese retired people, a group with the money and time to travel, had been put off coming to the region due to the perceived threat of contracting bird flu in crowded airports in Hong Kong or Singapore.
Most Japanese travellers came in groups, many on school trips. Groups tended to be more cautious when it came to choosing a destination, said Gunji.
Southern Travel, which listed on the NZAX last October, had an operating profit of $760,000 for the six months to last December. The Auckland-based company is looking to diversify beyond the Japanese market.
Japan is the country's fourth-largest tourism market. Figures released this week show a 3.5 per cent drop in Japanese tourists for the year to October.
About 159,000 Japanese visited this year, compared with 165,000 in 2004, Statistics NZ figures show.
Tourism NZ spokeswoman Cas Carter said the Japanese market was expected to be flat this year. But there were signs that Japan's economy was recovering from sluggishness.
Tourism NZ had launched a $4.2 million marketing campaign to woo back visitors and would unveil a website in March geared specifically for the Japanese market.
