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New High-Street Shop with Direct Customer access

The UK and Benelux – Market Region North Division

In the Market Region North Division, the UK and Benelux markets posted turnover of CHF 595 million in 2010, down from CHF 652 million in 2009. Operating earnings (EBIT) decreased to CHF 8.2 million from CHF 9.2 million in 2009. Underlying EBIT stood at CHF 16.1 million.

The results were heavily influenced by specific external factors. The flight cancellations caused by ash from the Icelandic volcano affected the UK and the Benelux countries more than most. In addition, weak consumer mood had a negative effect on demand in a still difficult economic environment. However, significant cost savings had a positive impact on operating earnings (EBIT).

UK: substantial expansion of own network of agencies

Kuoni UK reported turnover of CHF 477 million for the year, compared with CHF 524 million in 2009. The UK market suffered particularly badly from various external influences in 2010. In addition to the flight cancellations caused by the volcanic eruption in Iceland, heavy snow falls in Britain in January and December also reduced demand. Customer confidence was also dented by the political unrest in Thailand. The tough spending cuts imposed by the UK government did nothing to boost costumer’s moods. Finally, the depreciation of the UK pound against other currencies also had a negative effect on demand. After adjusting for all these challenging developments, Kuoni UK posted a slight increase in turnover. Excluding the expenditure required to expand the network of travel agencies, costs were reduced again in 2010.

The main business focus in 2010 was the further expansion of Kuoni’s network of retail outlets, with new travel agencies opening on attractive UK high streets. In addition to the seven existing agencies, five more were opened over the course of 2010, in Solihull, Cheltenham, Nottingham, Liverpool and Sheffield Meadowhall. As a result of the successful openings, all-important direct contact with customers was increased, as was the share of turnover accounted for by direct sales. This also made Kuoni one of the UK’s leading travel agencies for luxury holidays.

In Market Management (tour operating) the successful “sale” concept used in the previous year was repeated for the winter and summer seasons. At the end of 2010 Kuoni launched its first iPhone app in the British market in an attempt to attract new customers and develop an additional sales channel. Activities using social media channels like Facebook and Twitter were also expanded.

The most popular destinations for customers were the Maldives, followed by Thailand and Sri Lanka.
Kuoni UK continues to be a market leader for luxury holidays in the Indian Ocean, as well as being one of the major providers for destinations in the Far East, North Africa and the Middle East.

Specialist travel brands in the premium sector in the UK suffered additionally from the difficult economic situation and lower demand during the year. Specialist provider Voyages Jules Verne launched an innovative new product in the form of the virtual VJV Lounge, an internet platform that enables customers to swap stories and photographs with each other.

Kuoni UK has won more prizes over the years than just about any tour operator within the Kuoni Group. 2010 was no different, and Kuoni and its specialist brands were given numerous awards by British consumers. Some of the most prestigious of these included the Telegraph’s Ultra 100 Award, the Condé Nast Traveller Readers’ Travel Award, the Travel Weekly Globe Award, the Guardian/Observer Award and the British Travel Award as Best Safari and Wildlife Tour Operator.

increase in direct sales thanks
to new travel agencies

Turnover in the Netherlands and Belgium markets came to CHF 118 million for the year, down from CHF 129 million in 2009. Results for 2010 were hampered by the euro crisis in general and by the associated fall in the value of the euro against other currencies which lowered the demand in travelling abroad. The Benelux markets were also heavily affected by the flight ban imposed during the Icelandic volcanic eruption. Kuoni Benelux carried out a reorganisation during the year, which led to substantial cost savings. This inevitably had a positive effect on the unit’s profitability.

To increase direct sales, Kuoni opened its first two travel agencies in The Hague and Haarlem during 2010. In Benelux, too, social media platforms are now being used to generate new customer contacts. The most popular destinations at Kuoni Benelux during the year under review included the USA, Africa, China, the Maldives, the Netherlands Antilles and cruises in the Caribbean. Kuoni was named Best Tour Operator for Australia and New Zealand, as well as Best Specialist Operator. Kuoni is one of the leading long-haul providers in Belgium and the Netherlands. At the end of 2010, Kuoni acquired the Belgian tour operator Best Tours. This well-known travel brand specialises in premium escorted cultural tours and beach holidays in Thailand, China, Vietnam, South Africa and Egypt. With this new acquisition, Kuoni continues to build its position in the Belgian market.