Tourism operator Kelsian to sell resorts, bus and ferry services in bid to streamline company

The major operator is hoping to offload assets from Bruny Island to Sydney Harbour due to debt, a plummeting share price, and lack of Chinese tourists.

Kelsian has made the significant move to list its entire tourism portfolio from Bruny Island and Sydney Harbour to Rottnest Island.

Major tourism operator Kelsian, previously known as SeaLink, has announced plans to sell its entire Australian based tourism businesses as it looks to streamline the South Australian-headquartered group, reduce debt and boost shareholder value.

Kelsian’s shares have slumped from $7 in December, 2023 to $2.53 on Wednesday morning as the company made the significant move to list its entire tourism portfolio from Bruny Island and Sydney Harbour, to Rottnest Island.

Not only has Kelsian suffered a significant drop in its share price over the past 12 months, it assumed major debt from the acquisition of a US group and has also watched as Australia’s main source of inbound tourism revenue - big spending Chinese mainlanders - has failed to return to Australia at pre-pandemic levels.

Coupled with that, Australians are increasingly choosing to travel offshore instead of holidaying at home.

Analysts told The Australian that Kelsian’s falling share price and debt were issues.

SeaLink Ferry Terminal at Kangaroo Island will be retained.

“I think they had to do something. “There’s some good opportunities for the right company. I think it will be sold piecemeal, there are different buyers who will look at different parts of it,” one analyst said.

“The market is not comfortable with the amount of debt they are carrying, particularly since they purchased the US business over a year ago.”

“Chinese numbers have not returned to previous 2019 numbers, they are well down. Chinese student numbers have boosted the Chinese numbers, but they don’t spend. Holiday visitors are well down.”

Kelsian has appointed Macquarie Capital and Gresham Advisory to offload its tourism portfolio which generated more than $160m in revenue in the 2024 financial year.

The assets include its K’gari (Fraser Island) resorts, SeaLink Sydney Harbour, Murray Princess paddle-wheeler which offers overnight cruises on South Australia’s Murray River, Barossa bus tour operator Adelaide Sightseeing, SeaLink Western Australia, SeaLink Whitsundays, SeaLink Tasmania which transports cars and tourists to Bruny Island, and SeaLink Northern Territory.

The NRMA is said to be interested in the K’gari island resort, which has been previously difficult to sell while Journey Beyond could be interested in Kelsian’s WA assets.

“The management team has undertaken a comprehensive strategic portfolio review, and a sale of the Tourism Portfolio was assessed to be in the best interests of shareholders,” said chairwoman Fiona Hele in an ASX announcement on Wednesday morning.

“The divestment of the tourism portfolio will see Kelsian emerge as a more infrastructure like, commuter and contracted business, allowing us to focus on delivering essential journeys through marine, bus and motorcoach transport.

“Many of the continuing businesses are underpinned by defensive long-term government-backed service contracts, with cost base protection, generating even more predictable earnings and cashflows,” she said.

Kelsian said proceeds from the sale would be applied to reduce debt and selectively invest in growth opportunities within Kelsian’s marine, bus and motorcoach transport businesses.

If the sale proceeds Kelsian would retain its SeaLink Kangaroo Island ferry service, Gladstone Ferries, as well as ferries servicing North Stradbroke Island, Southern Moreton Bay Islands and Moggill cross river ferry services, as well as Townsville, Magnetic and Palm Island ferry services.

Latest federal government figures show Chinese tourists made 829,000 trips to Australia in 2024 which was 62 per cent of their Australian travel in 2019. They spent $8.1bn in 2024 which was 78 per cent of what they spent in 2019.