The Economic Times: June, 2014
Mumbai: Today, India is the brightest jewel in the $6-billion corporation's emerging market crown. Kuoni is a global leader in visa services through VFS, whose origin, interestingly, is from India. VFS today accounts for a third of the firm's profits. On a short visit to India, Stefan Leser, Kuoni's outbound and specialists division CEO, talks to TOI about why the firm is not gung-ho on investing in travel portals, its strategy to ply along with local brands and how an injury scuttled his dreams of becoming a sports coach. Excerpts:
Kuoni recently underwent a business restructuring globally. Where does India figure in the scheme of things?
We have let gone saturated markets where we had sub-scale tour activities, like in Spain, Italy, France and Russia. But we went out of Russia as the market is not structured, resulting in a huge cost disadvantage.
Though, Russia is a growth market, we took a call that we should not be there. But India is important for us as here you have structures in place and it's only a matter of how you take things forward.
So has the focus shifted from Europe to emerging markets?
Some of our businesses in Europe are not sub scale like in UK where we have a specialist position or in Switzerland where we are a household brand. Then we have a not so sub-scale business in the Nordics, where sun and beach holidays are quite popular.
We are also active in Hong Kong and China, and here in India, where there is potential. India is our biggest market among emerging nations. The country is also our second biggest in terms of staff strength as we have a large visa services operation (VFS) here.
Everyone is moving towards the online travel space. Have you missed the bus?
We are powering a lot of those planes with content. The model adopted by a lot of online players is grow the business and exit. I'm not judging them, it's a great business, but obviously they have a different plan.
We have been in the industry for 108 years and buying, selling businesses is not what we would do naturally.
We are happy to support those businesses, but not keen on taking up positions in them. And our online is basically to enable the customer to get an experience, but the fulfillment is still at our branches, so we prefer a hybrid model.
Kuoni's India journey has been dotted with acquisitions. What's your branding strategy?
We are not a company that comes and says from tomorrow everything is Kuoni. We do have advantages when we use Kuoni, even if it means co-branding, for instance Kuoni-SOTC. In Scandinavia too, we have a brand called Apollo known for Greek-styled beach holidays. Replacing that brand with Kuoni would be suicidal.
How did you get into the travel industry?
I wanted to be a sports teacher, but got injured during an exam. So I had to look for another career, and found tourism good. I have spent 27 years in the industry, but even today I am as excited to experience different cultures and countries. So when people seek career advice, I always say stay open.