Thursday, April 24, 2008

Specially positioned, dangerously

Kuoni UK's MD Nick Hughes has admitted that his business has one foot in the middle-ground between scale and niche.

This is where businesses die in any mature market, according to lastminute.com's Ian McCaig. He admits that his opinions about scale and niche are 'even more entrenched' since he talked about them at last year's Summit.

But Kuoni is moving upmarket, offering customers the tailor-made high-service travel experiences 'that they expect from us'. This high service offer will require a multi-channel approach. He admits that while there is 'significant upside potential' to Kuoni's level of internet bookings - currently in the teens - it is finite. 'High ticket value leads to a different customer behaviours,' he suggests. 'It's essential to be multi-channel for where we want to be.'

After just over a year in the business, the thing that Jones has found most surprising is that the 'specialist players are not extracting the margins they should.' Does that mean an admission of a shortcoming in Kuoni's yield management, or an awareness that specialists need to be more specialised to get the margins.

I wonder what he'll be saying when Peter Rothwell has settled into the Kuoni CEO role?

Martin Cowen, chief writer, Travolution

1 comment:

Joe Buhler said...

Kuoni as a group certainly has its work cut out for them with all their brands ranging across the many market segments the cover. It becomes increasingly difficult to generate added value as an intermediary in many of them as not only Kuoni as a tour operator, but all their suppliers are using multi-channel strategies as well. The market is shifting fast and you have to be nimble to stay in the game!