Fairfax still hungry for acquisitions in Asia after Kuoni buy

FAIRFAX Financial Holdings, which owns Thomas Cook India and is backed by billionnaire Prem Watsa, is on the prowl for more acquisitions even when the ink is barely dry on its recent purchase of Kuoni Group’s travel businesses in India and Hong Kong.

Thomas Cook India’s managing director Madhavan Menon told TTG Asia e-Daily the company was looking at Asia “more actively”, particularly at “niche” travel businesses which it could buy, such as its acquisition of Sri Lankan DMC Luxe Asia Travels last July.

The purchase of the Kuoni businesses in India, comprising outbound travel brand SOTC and DMC Sita, and the Hong Kong tour operating, made through Thomas Cook India, along with Luxe Asia, was “a way to mitigate the risk for Thomas Cook”, whose foreign exchange business was “exceptionally large”, Menon said.

The company would also be losing the Thomas Cook brand name in 2025 as part of the agreement when it was acquired by Fairfax from the Thomas Cook Group UK in 2012.

“The value of SOTC, 59 years old, and Sita, 55 years old, is far higher. More importantly, by acquiring them (we are acquiring) exceptional management teams, people such as Depak Deva (CEO, Destination Management India and South Asia of Kuoni Travel India) and Vishal Suri (CEO, SOTC).

“With the Hong Kong acquisition, we’ll grow organically. Asia is where the action is going to be. China, Indonesia and India are primary travel source markets for the next few years, while South-east Asia is also going to be a stronger inbound market. So now, we will expand further into Asia by looking at other opportunities. But while we will be a mass market player in India, we want to be niche in Asia.”

Menon is eyeing “well-run” niche travel businesses which will be allowed independence post-purchase. “We don’t have the ability to run them. It’s never our policy to interfere. It’s the same when we were acquired by Fairfax and it’s exactly what we’ll replicate,” he said.

SOTC, Sita and Kuoni Hong Kong will remain independent, he said. The Kuoni name is licensed to Fairfax/Thomas Cook India for one year in India and five years in Hong Kong, but brands such as SOTC, Sita and Distant Frontiers are transferred.

“For businesses that are retail and customer-facing, I don’t want to tangle with the customer. Let them choose which (brand) they want to buy from.”

Asked about the future of tour operating, since Kuoni wanted out, he said: “There’s a future absolutely. Kuoni sold off for totally different reasons: it wants to concentrate on the B2B space and focus on its DMCs. I don’t have a problem with that. I believe there is a future as a packaged tour provider, and when it comes to complex itineraries, you need the balance between bricks-and-mortar and digital. That’s what we will provide.”

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