Rene Herzog, during an interview with TTG Asia
HAVING bought the entire Kuoni European tour operating business, DER Touristik Group is streamlining processes in a way that won’t affect the customer-facing side but will have trade implications on issues such as contracting and ground-handling.
Already, Asian Trails has lost the Kuoni Switzerland, Scandinavia and the UK accounts to Go Vacation Thailand and Indonesia, the DMC owned by DER. Asian Trails continues to handle Kuoni clients from the three source markets in areas where Go Vacation is not represented, such as Malaysia, Cambodia, Myanmar and Laos.
But with more volume – the acquisition makes DER a leading pan-European travel company with some 7.7 million customers from source markets like Germany, Switzerland, Austria, Great Britain, Scandinavia, Czech Republic, Poland, Slovakia and Hungary – DER is looking to expand its DMC footprint in countries it operates in that are using third-party DMCs, said DER Touristik CEO Central Europe Rene Herzog in an interview with TTG Asia.
This could be via Go Vacation, joint ventures with other companies or founding new companies. It announced yesterday a joint venture with Buffalo Tours to create Go Vacation Vietnam. The new partnership will welcome its first guests from November 1.
“The DMC is an important part of the value chain. Whenever we have the size, it makes sense to be in control of the quality and value creation,” said Herzog.
DER at the same time is streamlining its Frankfurt office which handles brands DERTOUR, Meier’s Weltreisen and ADAC, and Cologne office (ITS and Jahn Reisen). All these brands, including Kuoni, will eventually be on one IT infrastructure. Corporate-wise, Herzog’s namecard already carries all the brands, including Kuoni, and “it is possible over time the name (DER) will change but the brands will remain; customer-facing activities remain exactly as they are”, he said.
“It’s the behind-the-scenes aspects like data-entering, IT, brochure production, etc, that we are harmonising, areas that customers don’t see. We have bought the rights to the Kuoni brand for 50 years. In the UK and Switzerland the brand is strong, why should we change it?,” said Herzog.
Asked about the impact of Kuoni Group’s sale to EQT, Herzog admitted it was “frustrating”.
“There’s so much negative press coverage surrounding the Kuoni Group in Switzerland and customers do not always understand that Kuoni Reisen is not part of Kuoni Group anymore.
Right now, because of the negative news, a customer passes a Kuoni agency in Switzerland and thinks it’s going bankrupt because of all the negative press. It’s not. It’s a different Kuoni but how do we tell him that? We’re not going to be putting stickers on the Kuoni brand saying this now belongs to DER,” said Herzog.
He expects the issue to be resolved once Kuoni is privatised.
Asked why Kuoni was a good buy, he said: “It has great brands, great market position, an existing customer base, very professional people and it is not overpriced.”
Meanwhile, Asian Trails’ CEO Laurent Kuenzle said the company was prepared that the Kuoni accounts would go to Go Vacation, saying this was “the logical conclusion” since DER owns the DMC.
On impact to the business, he said Asian Trails was not dependent on any one source, handling more than 350,000 passengers a year from around the world.
“This also opens a new opportunity for us to work with other partners which couldn’t work with us due to our association with Kuoni, which they deemed a competitor,” he added.
But he admitted on the emotional level, it was sad to lose the accounts. “Some of them were our launch customers,” he said.
Read more stories from our ITB Berlin TTG Asia Show Daily here.
