Kuoni reports 'challenging and highly competitive' market

Kuoni reports 'challenging and highly competitive' market

Booking levels for Kuoni’s tour operating businesses, which are up for sale, were down by 8% in the first five months of the year.

No breakdown of the performance of Kuoni UK was given in today’s trading update by the Swiss travel group.

But the company described the overall business environment as remaining “challenging and highly competitive”.

No timeframe was given for the sale of the tour operations, other than the group saying it intends to find new owners for its outbound units “in the course of 2015”.

Sources close to the sale say they expect it to be concluded in August, although an announcement is expected in early September. After a second round of bidding concluded last month it is understood a handful of potential buyers remain in the race - all private equity firms.

The sale is being handled by investment bank JP Morgan. The operator is understood to be being offered with a licence to use the brand in the UK and substantial net debt.

Updating on trading today, Kuoni said in a statement: “Booking numbers for the tour operating activities that are up for sale - outbound units - were down 8% in local currency terms.

“In a persistently difficult market environment in Scandinavia/Finland the booking trend improved slightly, but sales fell mainly because of a significant decrease in flight capacities.

“While the India, Hong Kong/China and Benelux markets performed well, the Swiss market suffered from the removal of the floor on the euro/franc exchange rate.

“Discounts and reduced flight capacities led to lower bookings compared with the same period in the previous year.”

The company reported growth in the business activities of its Global Travel Distribution and VFS Global visa services provider in the period to May 31.

GTS accommodation and destination services bookings grew by 12% year-on-year, with strong growth from the Asia/Pacific region.

VFS Global processed 11% more visa applications than the same period in 2014.

Kuoni UK confirmed a strong start to the year alongside the publication of group's trading statement today.

Since January bookings are eight per cent ahead year-on-year with the Maldives remaining as the company’s best-selling destination, followed by Thailand and Mauritius.

Kuoni UK managing director, Derek Jones, said: “The UK has traded extremely well in the first five months of year.

“January got off to a particularly good start helped by our investment in a bold new marketing campaign which gave us real stand out during the peak sales period.”

He added: “The positive start has continued and we’ve performed well throughout March, April and May and built on the momentum we gained in January.”

A new phase of marketing has been launched by Kuoni UK to promote its summer sale campaign, with television advertising shown again on catch-up TV, such as ITV player and All 4 during targeted programmes.

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