Page 1 of 3

Strong Growth with Online “Hotel Bedbank”

Kuoni Destination Management – Destinations Division

The Division Destinations has through significant growth become one of Kuoni’s most important sources of earnings. The division generated turnover of CHF 1 017 million in 2010 (compared with CHF 894 million in the previous year). This excellent 13.7 % improvement is due to growth in nearly all the Destination Management units. Kuoni Connect, the “Hotel Bedbank” launched in 2009, posted a particularly healthy growth rate, and in local currency terms turnover of all units increased by 15.6 %.

The operating earnings (EBIT) increased by 36.3 % to CHF 21.2 million (2009: CHF 15.5 million), despite pressure on margins, negative currency influences and loss of sales due to external factors such as the volcanic eruption in Iceland and political unrest in Thailand. Underlying EBIT amounted to CHF 28.2 million. Cost savings by the Destination Management unit as a whole made a contribution to the improvement in results. To round off a good year, in 2010 Kuoni Destination Management won the World Travel Award for Best Global Destination Management Company for the first time.

Destination Management Europe: Kuoni Connect proves successful

Destination Management (DM) Europe recorded turnover of CHF 463 million for the year (2009: CHF 413 million). All source markets, in particular Asia, contributed to this clear increase. However, the key Japanese market continued to suffer from the fallout from the longterm economic crisis, which increased pressure on prices. The unit as a whole would have achieved even better growth had it not been for the strong Swiss franc, the volcanic eruption in Iceland and the political conflict in Thailand. Negative currency effects and increased pressure on margins from customers and service providers also weighed down results. Despite higher passenger numbers, DM Europe managed to reduce operating costs.
DM Europe’s 24 Destination Management offices were reorganised during the year. Better exploitation of synergies between the individual offices helped reinforce Kuoni’s leading market position in this business.

Turnover from MICE business (Meetings, Incentives, Conferences, Events) increased mainly as a result of higher demand from the Far East.

The most important destinations for Destination Management Europe were France, Switzerland, Italy and Germany. The fastest growth was achieved at destinations in Turkey and the UK, where market share also improved.

Positively to mention in 2010 was the growth and positioning of Kuoni Connect. This “hotel bedbank” was launched worldwide at the end of 2009. Organisationally it is part of Destination Management Europe. Turnover increased by 40 % in 2010 while the number of overnight stays booked went up by more than 50 %. Kuoni Connect strengthened its market position with travel agencies and through partnerships with companies including Swiss Railways (SBB), Travelport and Etihad Airways. There was also healthy growth in the USA and Asia. Australia was added as a new destination during the year. The size of the overall hotel portfolio had increased by 15 % by the end of 2010. The “Hotel Bedbank” gives travel agents, tour operators and websites direct booking access to hotels, supplying services purchased at the destinations. This B2B business is one of the fastest growing areas of the tourism industry worldwide.