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Travel firms on expansion trail

March 01, 2004 08:56 IST

Kuoni India is in the process of acquiring an infotech company and setting up a call centre to cater to the travel enquiries of foreign tourists who visit India.

The company, which currently operates inbound charters to Goa and Delhi, is also tying up with global aircraft companies. Cox & Kings, too, is planning to set up a call centre in India for its global operations.

It has signed joint venture agreements with local operators in Thailand, Malaysia and Singapore to float subsidiary companies in these countries. And over the last few months, Thomas Cook has opened at least six offices, including three in India.

Buoyed by the tourism boom, India's travel companies are on an unprecedented expansion spree. Nearly every company, including Kuoni, Cox & Kings, Thomas Cook and Travel Corporation of India, has big business expansion plans.

TCI plans on foraying into new markets worldwide, according to Adi Katgara, director of TCI. Thomas Cook has already obtained a licence for a representative office in Bangladesh and has applied for licences to operate foreign exchange businesses in the Maldives and Bangladesh.

Even small travel companies have growth plans: Kesari Tours, for example, which operates only in Maharashtra, is setting up offices in Dubai and London, besides expanding its domestic presence to other states.

Says Ranjit Malkani, CEO, Kuoni India: "This is the 'golden era' for the Indian travel and tourism industry, an era that offers several opportunities for extraordinary growth. Kuoni India has a fund earmarked for expansion and new projects, the corpus of which is Rs 200 crore (Rs 2 billion) for three years."

Why is Kuoni acquiring an IT company? "IT systems will play a greater role in our line of business. We are close to acquiring an IT company. This is aimed at making processes nimble and bringing about reduced infrastructure costs, translating into extensive savings," Malkani explains.

Most tour operators are expanding into south Asia and the Middle East. Says Peter Kerkar, CEO of Cox & Kings: "With an expected revenue growth of around 50 per cent, our expansion plans envisage the creation of a Pan Asia network of both inbound and outbound tour operations."

So why is every travel company expanding? To ensure that service levels are maintained at a time when business is booming, replies Veena Patil, director of Kesari Tours.

Also, most travel agencies think that the losses they made last year on account of the severe acute respiratory syndrome and the Iraq war will be wiped out this season.

So they're ploughing their profits into expansion and scrambling to capture a bigger share of the growing market. In short, they're cashing in on the "shining travel" times.
Rumi Dutta in Mumbai