Kuoni exits leisure tours business

Kuoni entered India in 1997 acquiring SOTC Tours which was one of pioneers of foreign tours in the country

Swiss tour operator Kuoni is exiting tour business in India and other parts of world to focus on online travel service, destination management and visa processing service.

The decision to exit tour business affects about 3,800 people across locations, the company said but gave no further details.

Kuoni was founded in 1906 and it entered India in 1997 acquiring SOTC Tours which was one of pioneers of foreign tours in the country. Three years later, it took over Sita World Travels, a specialist in inbound tours.

At present, the company is present in both outbound and inbound tour segment and also runs corporate travel business in India. Kuoni group also runs online destination management services and visa services, the latter being run under the VFS brand.

"Kuoni's outbound business faces increasing challenges from changing market conditions.

In consideration of the fundamental changes in the industry and the unique position of Kuoni Group as a leading service provider to the global travel industry, the Board of Directors and Group Executive Board have decided to focus the company's resources on those core activities in which Kuoni already enjoys a leading market position with attractive prospects. Kuoni has therefore decided to exit the tour operating businesses,'' the group said in a statement from Zurich.

SOTC which Kuoni took over in 1997 was one of the leaders in outbound travel space. "I used to visit SOTC office near GPO in early 1970s. In those years SOTC used to offer tours to Europe and South East Asia and had competition from SITA and Trade Wings,'' said Om Prakash, a tour industry veteran and director of In Orbit Tours.

The company grew under Ranjit Malkani who served as its managing director and CEO till 2005.  SOTC and Raj Travels were amongst few operators who ran kitchen caravans on Europe tours which became popular amongst customers. Kuoni connection helped SOTC to use network of Swiss companies destination management companies for contracting giving it better rates.

Travel industry sources say globally Kuoni group has been increasingly focusing on visa and online travel management services. Also tour operations is low margin business and may have promoted the group to exit the tour business. It has also lost leadership mantle in tour business in India, a sector expert remarked.

At a global level too the share of tour business in the total revenue has shrunk over the years. Kuoni India did not respond to an email query from this paper. However in a statement from Mumbai it said.

“Kuoni intends to complete the search for new owners in the course of 2015.  Kuoni is convinced that the outbound business can be better developed under new ownership, potentially leveraging scale and specific local strengths. This will only further benefit the business, its customers, employees and other stakeholders.,” the company statement added.