Kuoni moves out from the Indian tour operating business

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  • On February 12, 2015
Kuoni – the Zürich, Switzerland based Travel Company chooses to move out from tour operating activities in the Indian market. The company plans to concentrate efforts on its core business as a service provider, to the worldwide travel industry, governments and be a leading B-to-B player.

In the new set-up, Kuoni plans to reform its business in three divisions, viz. Global Travel Services, Global Travel Distribution and VFS Global. Long-standing growth is in the agenda of Kuoni, as the firm looks ahead focusing more on attractive and potential markets like Asia, Africa and the Middle East.

The travel and tourism sector has been constantly changing, with more and more companies going digital, to harmonize with the current market trend. Companies that are doing business still the traditional way are having the tough time, in the segment. As the travel portals equipped with most-recent technology have started generating good business, many companies that used to follow the conventional approach felt the need of redefining their business models.

The tour operating business of Kuoni was one, which got ‘affected’ the most by the changing market scenario in India. (Before divestment) The firm generated revenue about $2.15 billion in 2014 from its tour operating business.

The market did not affect Kuoni only, as even the British global travel company, Thomas Cook moved out from the Indian travel business, recently, signaling the threats that many foreign enterprises now feel from the local (Indian) companies.

Kuoni entered the Indian market in 1996, by buying 51 percent of stake in SOTC (which was already an established firm, then). In 1997, it acquired 100 percent of SOTC and established an identity as Kuoni Travel India. Sita World Travel joined the brigade of Kuoni in 2000 and the latter became one of the largest travel companies, in India. To address travelers in the Middle East market, Kuoni acquired the destination manager ‘Tour Club’, further.

During the course in the Indian market, the firm even launched FIT holidays for individual travelers, entered the domestic tourism segment with SOTC Holidays, opened an academy, initiated its luxury holiday brand in India and got hold of Distant Frontiers (in 2006).

After plans to divest the tour operating business in India, Kuoni expects to make profits through the reduced portfolio that it has now, comprised of Sita, Distant Frontiers and VFS Global.


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