Kuoni

Hotelplan and TUI eye Swiss tour operator business

Rivals Hotelplan and TUI Suisse are interested in Kuoni’s Swiss tour operating business which is up for sale as part of the group’s dramatic exit from the tour operator business.

January 23, 2015
Hotelplan CEO Thomas Stirnimann
Photo: Thomas Entzeroth

Under its new strategy, Kuoni aims to sell its tour operator businesses in Switzerland, Scandinavia, the UK, Benelux, India and Hong Kong by the end of this year. The various companies could be sold en bloc as an international operation or on a country-by-country basis. Kuoni CEO Peter Meier said last week that no talks had yet been held with any potential investors, and added that “both strategic investors, who are our competitors today, and also private equity companies” are possible buyers.

In Switzerland, both Hotelplan, number two behind market leader Kuoni, and TUI Suisse, the third-largest tour operator, have shown interest. In parallel, the stronger Swiss franc is effectively putting up the acquisition price for potential foreign buyers based in the eurozone or elsewhere. Kuoni’s Swiss tour operating business had revenues of CHF 679 million in 2014.

Thomas Stirnimann, Hotelplan’s CEO and formerly head of Kuoni’s Swiss tour operator business, told Swiss travel trade magazine Travel Inside that the company would look into a possible acquisition. “We would be a very suitable new owner,” he declared. A company spokeswoman told fvw that the focus was clearly on Switzerland. Hotelplan’s owner Migros needs to evaluate the option of combining the two market leaders or potentially letting Kuoni be acquired by a foreign competitor, possibly from Germany. The Hotelplan Group, with revenues of CHF 1.1 billion (€1.1 billion) is much smaller than the likes of TUI, Thomas Cook and DER Touristik.

TUI will also examine Kuoni, TUI Suisse chief Martin Wittwer told Travel Inside. There were already unsuccessful talks last year to combine Kuoni and TUI’s Swiss tour operating businesses. However, TUI is already strongly present in all markets where Kuoni businesses are now up for sale.

Meanwhile, experts doubt whether DER Touristik’s parent company Rewe Group would be ready to make a large-scale acquisition of Kuoni’s tour operator businesses. The Swiss business would certainly fit the group’s package holidays and individual holidays activities, according to experts. At present, the mainstream brand ITS cooperates in Switzerland with Coop.

Financial investors are seen as possible buyers of the Kuoni tour operators. However, they would not be able to achieve any synergies with other businesses and would face the question of how to make a profitable exit in the future given the limited number of potential buyers, observers pointed out.

Kuoni’s tour operator division, with some 3,800 staff, had revenues of some CHF 2.2 billion in 2014. The Nordics are the biggest business with turnover of CHF 844 million and number three in the region. In 2014, the Nordic tour operating business suffered a 14% revenue fall while the Outbound Europe/Asia business, covering the other tour operators, had a 5% drop to CHF 1.3 billion. Kuoni UK, with revenues of CHF 410 million, is a leading specialist long-haul tour operator. India (CHF 138m), Hong Kong (CHF 79m) and Benelux (CHF 37m) are relatively small businesses.

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