For more than two decades, diversification has been a key business strategy of Paris-based KTS France. In the last five years, as the business environment for France’s travel agency industry has grown increasingly challenging, that diversity has proven critical.
Adeline Fiani, president of KTS France, has managed the helm from the beginning in 1988, when her family’s Lebanon-based business group, Kurban Travel, opened its first Paris office. (Kurban Travel Group has offices in Lebanon, Oman and the United Arab Emirates.)
“We began with the distribution of individual tickets,” she told Travel Market Report. “After we developed business travel, we made departments for outgoing and incoming travel. Now we are one of the largest agencies in Paris.” Today, KTS France, a member of TWIN, has about 50 employees.
The mix of inbound and outbound travel is a particular strength. “When one department is lower, the other is higher. This makes the force of our company.”
Inbound, KTS France caters to leisure groups, corporate groups and incentives and provides packages for individual travelers. The outbound department arranges individual, group and corporate travel.
“We can answer all requests – congresses, FITs, leisure groups. We never say no, and this is our strength.”
Declines in retail
But in the last year or so, the retail side of the equation has been declining. “We are losing business in the retail,” Fiani told Travel Market Report. Among the reasons: French consumers are buying online, lured in part by deeper and deeper price cuts available through that channel.
The trend is hardly unique to France, but consumer migration to the Internet for air ticket purchases has been slower in France than in the U.S. According to Fiani, the reason is that French consumers are still somewhat reluctant to conduct credit card transactions online.
But as more and more agencies charge transaction fees for air bookings – a growing practice since 2005, when airlines in France stopped paying agency commissions altogether – consumers are taking their business elsewhere. “People don’t accept the fees,” Fiani said.
“That’s why our business is changing. Now for retail, we have to sell packages or build packages. I think in the next few years we will not sell any tickets.”
Another difficult business condition for France’s travel agencies, especially smaller ones, is the airlines’ increasingly stringent requirements surrounding payments and credit. Agencies are afforded little leeway in monthly remittances, Fiani said, voicing a complaint familiar to U.S. agents. “If we are late, they close the agency at the same second.”
Under a new agreement with IATA’s Billing and Settlement Plan (BSP), rules governing bank guarantees required by French travel agencies also will grow increasingly strict over the next three years. Fiani called the BSP requirements for French agencies “very heavy.”
“They are killing our business little by little. In 10 years, the normal travel agency will disappear to big Internet operators or a new way of distribution. Everything is changing. We are all concerned in retail,” said Fiani, who is active in the French Association of Travel Agents and Tour Operators (SNAV).
What’s ahead for France’s traditional travel agencies? “I think the future of our business is to be more and more specialized and to give a high level of services,” Fiani said. “The opportunity for growth is to build programs to be distributed at a large level, on the international side, through the Internet.”
This, too, has its challenges, Fiani said. “You have to control the payments. In our business we are facing a lot of stolen credit cards. This is a big problem on the Internet.”
Constant scrutiny is required. “The future of our business is to be close on the business, watching it every day. You have to be sure that everything is going on the right way.”
For all the changes and challenges, Fiani still enjoys her work. “Every day is different from the other, and the relations with many different nationalities, many different people – that is what we enjoy in our business. It’s really a business of patience.”