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Division Outbound Europe

The division includes Kuoni Group’s direct-to-customer (B2C) tour operating activities (Kuoni/Apollo) in Europe by a majority. It was established in 2011 as part of the new group structure, and represents a further bundling of strengths in European tour operating business. The division includes the Outbound Nordic and Outbound Kuoni Europe Units. Outbound Nordic includes the Sweden, Norway, Denmark and Finland markets, as well as the Scandinavian airline Novair and the “Playitas” sports and family holiday resort on Fuerteventura. Outbound Kuoni Europe includes the source markets of Switzerland, the United Kingdom, France, Italy, Spain and Benelux (Netherlands and Belgium).

The Procurement and Production Unit (P&P) is an integrated part of this division. It is responsible for the coordinated joint purchasing of all land arrangements (hotels, transfers and other services at the target destinations), which are then sold in the individual markets in combination with local flight options. P&P is based in three hubs: Zurich, Stockholm and Dorking (in the UK).

The division also includes the Online & Mobile Unit, which runs and develops all local internet sites in the source markets, as well as deploying other modern mobile technologies to sell travel products.

The Outbound Nordic and Outbound Kuoni Europe Units represent our traditional tour operating business. This business accounted for 36% of Kuoni Group’s turnover in 2011.

In Western and Southern Europe Kuoni operates largely under the Kuoni brand, but in all countries sub-brands are also used to suit the quality, focus and client segment of the business concerned. Apollo is one of the leading brands in Northern Europe. In all markets holidays are offered that are appropriate to the particular strategy, business model and target customer segment. Product portfolios are defined in conjunction with the responsible Procurement and Production Unit. The aim is to achieve the greatest possible overlap of products so that higher volumes of business with hotels allow us to negotiate more favourable contractual conditions. The various prices we manage to negotiate are then available to all the individual markets for their products. Each market decides how to calculate the final price and how to assemble a complete travel product that will meet its local customer requirements. Depending on their focus and their business model, the national Kuoni and Apollo organisations put these land arrangements together individually with flights from the global reservation system, or couple them with prebooked seats on various airlines to create package holidays.

Tour operators earn their money on the one hand through the margins they add to the purchase price of flight and hotel services, and on the other through booking fees for other services.

When the travel products are ready, the markets tend to have a choice of several sales channels through which to sell them. Depending on the specific market, Kuoni and Apollo focus on the following channels: inter- net sites, call centres, mobile devices like smart phones, own retail outlets and third-party travel agencies.

As at the end of 2011, the Outbound Europe Division was selling its products through the different channels in the following proportions: 24% through the internet, 9% through call centres, 23% though its own retail outlets, and 43% through sales channels outside the Kuoni Group. The different brands’ websites serve as information and booking platforms, while printed travel brochures are still used to inspire and guide customers. In some markets the brochures are also made available in electronic form for use on tablet computers (such as the iPad.)

Internet: Kuoni/Apollo runs its own websites in all markets, providing it with direct customer contact through the internet. Scandinavia takes the highest proportion of bookings over the internet with 55% of the total. The equivalent figure in Switzerland is about 10%, and in the United Kingdom 12%.

Call centres: Consumers phone up to buy products directly that they have seen either in a brochure or on the internet. In markets with third-party suppliers (external travel agencies) the sale can also be business-to-business, with a tour operator ringing up a call centre directly.