Many independent travel agents will never really trust that Kuoni can run its own chain of retail stores and continue to support them to the same degree that other “trade-only” suppliers do.
We always knew it was going to be a challenge to keep the trade on-side once we decided to open Kuoni branded shops. Let’s be honest, the track record of those that went before us wasn’t good. I remember being told by a top independent agent some 20 years ago that the reward for winning Thomson “Agent of the Month” was a certificate for the back office wall… and a Lunn Poly shop next door! And as if the threat of a store next door wasn’t enough, this was followed by in-house discounting levels that were uneconomical to follow and eventually by permanent online price reductions.
It’s no wonder nobody trusts us. Agents have learnt that trusting the word of Foxy Loxy tour operators, like dumb Chicken Lickens, is not a sensible long term strategy.
So it’s worth taking a moment here to explain why Kuoni ended up opening stores. For years we were essentially a trade-only business, nurturing long term relationships with hundreds of good independent agents. As we entered the 21st century about a third of our business came to us this way. Most of the other two thirds was coming from the four big vertically integrated multiples; Lunn Poly, Thomas Cook, Going Places and First Choice. It was a very profitable model but when the landscape changed it left Kuoni with a huge gap to fill. Through a combination of industry consolidation and aggressive directional selling almost half of our business was under real threat of disappearing. For a brand that had relied so heavily on trade promotion, this could have spelt disaster.
Our strategy of opening our own Kuoni branded stores had two key objectives; to replace business that was being lost through the multiples and to build a brand that customers recognised. It was simply not an option to replace the lost revenue through independent agents alone, but we had no intention of working against them. That’s why we were careful to find locations to exclusively target the major retailers; in out-of-town shopping malls and prime city centre high streets. And it’s why we never undercut independent agents on price in any other channel, including on our website.
Inevitably, along the way I’m sure we’ve picked up some business from customers that used to book with independent agents but I’m equally sure that independent agents have picked up many Kuoni customers that used to book with the multiples – and probably switched them to Travel 2!
Agents don’t feel they can fully trust us – I get it – but we will always respect the fact that our reputation here in the UK was built through experienced, knowledgeable, independent agents. So we don’t walk away. We continue instead to prove that it is possible to successfully blend owned branded stores with productive independent partnerships.
