IN ITS boldest restructure yet, Kuoni has announced it would exit the tour-operating business and is seeking buyers for Kuoni Switzerland, the UK, Benelux, Hong Kong/China, India and operations in Scandinavia/Finland in the course of this year.
Ending over 100-year legacy as one of Europe’s giant tour operators, Kuoni will be a seller rather than buyer to the industry, with B2B hotel and land wholesaling, destination management services and visa facilitation as its core businesses. These already account for 60 per cent of current consolidated turnover.
Kuoni has been moving towards this strategic direction, snapping up B2B operator GTA from Travelport in 2011 and selling off outbound businesses in France, Italy, Spain and Holland in the past two to three years.
The impending sale may affect Asian Trails, a profit-making regional DMC owned by Kuoni, for which Kuoni Switzerland and UK are huge accounts. Under a new owner, they are no longer obliged to use Asian Trails to handle their clients.
However, Asian Trails chairman Luzi Matzig believes it will in fact turn out to be positive. He told TTG Asia e-Daily: “As you may recall, Kuoni sold off its outbound businesses in France, Italy, Spain and Holland two or three years ago. Yet, we are still handling these operators who have been mostly taken over by former managers and staff. It seems that these units, after being freed from corporate ‘guidance’ by Kuoni Zurich head office, developed fresh entrepreneurial spirit and did better than ever before as they were able to adapt more quickly to their individual markets and with very much reduced overheads.
“Therefore I believe that things can only get better once the remaining Kuoni outbound operations are sold and I see the whole development as a positive move.”
Kuoni-owned DMCs in Asia such as Asian Trails and SITA are profitable and, with the region continuing to grow, Kuoni in a statement said it would invest additional resources in Asia, along with the Middle East and Africa, across the three core businesses.
On a pro-forma basis, the new Kuoni employs around 8,000 people with a turnover of 3.4 billion Swiss francs (US$3.3 billion) in 2014. The impending sale cuts 3,800 people and 2.2 billion Swiss francs turnover.
The question remains as to who will buy Kuoni, with the move casting a deeper shadow on the future of tour operating in a stagnant market such as Western Europe, where the evolution of direct bookings of air/hotel makes it hard for generalists to be profitable.
