Tour Operating on a Slide, Price-Sensitive Consumers on the Rise.
By Yeoh Siew Hoon
Friday, 5th June 2009
A steadily declining traditional tour operating business and a much more price sensitive consumer will be what will stay with the industry after it comes out of this trough, says Hans Lerch, the newly-appointed vice chairman of the board of Hotelplan, Switzerland.

Lerch (right), who will be speaking at WIT-Web In Travel as well as the WIT Ideas Lab at ITB Asia, told WIT, "The traditional tour operating business is on a steadily declining path and depending where you look, the present crisis is like a "V" cutting into this path.

"We are at the lower end of that "V" but still going down. When things get back to normal, we will meet that "steadily declining path" again. It will have declined further from where we left it almost two years ago."

Lerch, who's seen the tour operating business through its ups, downs and changes over the past four decades during his career with Kuoni Travel Group, added, "What's probably going to stay with us for quite some time is a much more, or should I say, an even more price sensitive customer who will want to make absolutely certain to get the best for the cheapest price at all times.

"People might say – it's always been like this. I say – the future  will be perceptively different."

Lerch led Kuoni Travel Group as president and CEO for six years. After his exit from the group, he joined SR Technics, the world's leading independent total solutions provider of aircraft, component, engine and technical services, as Group CEO.

His appointment to Hotelplan marks his comeback to the tour operating business. Asked why he took up the position when he could have easily retired to pursue personal interests, Lerch said, "Times are tough for just about all businesses everywhere. So Migros asked for my help with regard to the strategic positioning of their travel subsidiary Hotelplan which is a US$ 1.5 billion company with 3500 staff in Switzerland and across Europe.

"It sounded like fun, I have the time to help so I said "yes".

Asked what he hopes to share during his session at the WIT Ideas Lab where he will speak on "Tough Love: Ideas to Transform Your Business", Lerch said, "Well, many things will change but as many won't. It's maybe the stuff we should not forget and do for the so-called legacy business, which still pays for our salaries after all, I should share with the audience at the WIT Ideas Lab."

Yeoh Siew Hoon, one of Asia's most respected travel editors and commentators, writes a regular column on news, trends and issues in the hospitality industry for 4Hoteliers.com.

Siew Hoon, who has covered the tourism industry in Asia/Pacific for the past 20 years, runs SHY Ventures Pte Ltd. Her other writings can be found at www.thetransitcafe.com

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