In a Jan. 14 announcement that came as a shock to the travel and tourism industry worldwide, Zurich-based Kuoni, which is the oldest and one of the largest tour operators based in continental Europe, announced that it was disposing of its European tour operator division, explaining that the move was part of a plan to “focus the company’s activities on its core business as a service provider to the global travel industry and to governments.” According to NAJ sources in Europe, the US operations—it also owns one of the largest tour operator brands in the U.S., Manhattan-based AlliedTPro as well as hotel aggregator/bed bank GTA—will not be touched.
Kuoni, which purchased several European tour operators during the late 1990s when owners were enticed to sell before less favorable EU tax laws were scheduled to go into effect in 2000, has experienced difficulties in several European markets right after the sale in trying to convince agents, who perceived Kuoni as a competitor, to purchase wholesale products from them.
In an effort to obtain volume pricing advantage, Kuoni began three years ago to centralize hotel purchasing from the company’s headquarters in Switzerland. After spending years cultivating relationships with Kuoni product managers in individual countries throughout Europe, hotels and attractions suddenly found themselves negotiating with one person: the lead regional product manager for North America, Colleen Ernst. Many felt they were engaged in a silent auction in which, if they didn’t extend the right price, they would lose presence in all Kuoni brochure programs to a competitor.
Apparently it wasn’t working. Kuoni sold its tour operator divisions in Italy and Holland, and they restructured its North American operations by designating AlliedTPro to focus on groups and GTA on FIT contracting. After two full years of being able to concentrate on leisure, escorted, and ad hoc MICE groups, AlliedTPro, under the leadership of Mark Morello, has focused on service-oriented and higher margin business. Also, two years ago, Kuoni launched brite spokes as a new stand-alone brand containing theme-oriented tour product sold domestically as well as internationally. Both brite spokes and AlliedTPro are housed in the same offices on 7th Avenue in Manhattan, a few blocks south of Times Square. The company says that it serves over 600 international clients.
Meantime, Kuoni’s GTA division raised eyebrows when several of its hotel contracting staff left to work for competitors. And last spring, the aforementioned Colleen Ernst was let go after 18 years with the company. However, over the past six months, the division has quietly rebuilt its North American contracting division to a point of renewed stability. Overall the Kuoni company’s travel division employs around 3,800 people; it is unclear how many of this number might be affected when it is acquired by another entity. Read FVW ‘s take here: http://www.fvw.com/kuoni-speculation-after-tour-operator-disposal-plan/393/139572/11245
