Swiss travel company Kuoni started a new price war in the lower price vacation segment in Switzerland by cutting prices by 15 to 20%. In addition to this general price cuts come rebates, called “Price Pearls”, which might help persuading customers to finally book with Kuoni, or their subsidiary, Helvetic Tours.
How could Kuoni lower its prices by such a fair amount? In their todays press release they name synergie effects, re-negotiations and an internal reorganisation as the main reasons. What is missing in the press release is the increasing competition from international providers of travel products, such as TUI, which might have forced them to lower their margin. As Kuoni is loosing market-share in britain, its main market besides Switzerland, the strategy could be to use this price-cut to at least maintain their position in their home-market.
As the Swiss travel industry is constantly heating up it will be interesting to see who is going to survive.
|Author: Reto Hofstetter|