Strategy

Le Passage: Back to rule

Le Passage to India Tours and Travels is one of the country's youngest and fastest growing destination management companies, registering a 100 per cent growth in 2004-2005. Having recently taken over Select Vacations, it plans to spread its wings further in the outbound market as well. Radhika Mathur Bhasin talks about the company’s strategies and future plans

Ghulam Naqshband Chairman Emeritus, Le Passage to India

It is not often that the tourism industry sees a company, barely three years old in league, become one of the top three destination management companies in the country. 'Le Passage to India' had done just that. With their recent joint venture agreement with TUI AG, one of the world’s largest travel and tourism integrated companies, in April 2005, and the recent acquisition of Select Vacations Private Limited, Le Passage to India is poised for a long innings in the inbound and outbound market.

The joint venture with TUI AG not only helped Le Passage to expand its horizons, in terms of bringing in the numbers, but also gave it an opportunity to adapt itself to international operating standards. Says Ghulam Naqshband, chairman Emeritus, 'Le Passage to India', "Our tie-up with such a huge company provides us with the opportunity to see how they operate. It also lends a tremendous amount of prestige to be chosen as a partner, despite being a relatively new company."

Le Passage, in this venture, enjoys complete independence in terms of day-to-day operations right from day one of the merger. "Like most multinational firms, TUI AG also has a policy whereby all operational issues are handled by an Indian management team independently. The only thing that has changed is that we now submit our financial results for the year ending 31st December as well as 31st March."

With an aggressive marketing strategy in place, the company has devised a proactive strategy to meet the targets it has set up for itself. Says Naqshband, "We are trying to be innovative and creative in our product development. We are not limiting ourselves to attending trade fairs like WTM and ITB but also actively participating in regional trade fairs in China, Turkey, Malaysia and Russia. Our senior executives are travelling extensively to explore new markets while laying emphasis on the quality of service, which is the very basis of getting business from foreign tour operators."

According to Wolfgang Bremmer, director TUI AG, "The number of pax that TUI brings is approximately 25-30 thousand annually with an approximate turnover of 10 million euro. The joint venture will focus on consolidating the incoming business of TUI."

From a staff strength of just 14 people in 2003, Le Passage today is a team of over 116 travel professionals across 14 locations that serve holiday makers from across the world.

With steadily increasing turnover of Rs 45 crore in the first year of its inception followed by Rs 91 crore in 2005, the company is aiming to achieve a target revenue of Rs 160 crores in the financial year 2005-2006.

Charter traffic has also given Le Passage an edge on the beach holiday segment. "The incremental business is coming in from France, Holland, Germany and Scandinavia. In addition to this, we would also be handling at least two charter flights a week coming in from Europe to Goa by the end of April this year. Our effort is to bring in even those TUI offices that were not looking at India earlier," says Naqshband.

Looking outbound

Till recently an inbound tour company, Le Passage's acquisition of Select Vacations Private Limited, a company promoting leisure travel overseas, is a venture into the already familiar but fiercely competitive outbound tour market segment.

Arjun Sharma, chairman and managing director, Le Passage to India, is optimistic about the growth in the outbound segment. "International travel has become intrinsically cheaper on an absolute scale with better deals being offered abroad relative to travel within India. Indian outbound travel has been growing at the rate of 15 to 20 per cent annually during the last two to three years and the Indian economic growth has enhanced the disposable incomes and the desire to travel abroad for holidays.

Well established via its office representations in New York, London, Paris, Frankfurt, Australia and New Zealand, Le Passage is now looking at strengthening its position in the United States, Japan, China and the Philippines.

The company has decided to steer away from the normal ticketing business whilst focusing on newer markets. Talking about the companies innovative niche marketing strategies, Naqshband says, "Innovation is key. To start with, we will focus specifically on package tours for individual or group travel. Our target is to stress on incentive travel, business travel and the conference segment."

Le Passage is also tapping new markets like the eastern Europe Baltic countries with a special emphasis on Russia for developing its inbound business further. Says Naqshband, "There is more business in Russia than just one charter. Huge potential lies in countries in the Commonwealth states as well as eastern Europe countries like Croatia and Yugoslavia. We have had some business coming from Hungary, Poland, Czechoslovakia, even though the numbers today are small. The objective is to make our presence felt so we already have a presence when the market emerges."

He further added, "Our experience, service, knowledge together is our USP. Not that we did not use these assets before but being a new company we are also in competition with our old company. We need to be one up and acquire the top position." Le Passage’s corporate mission statement is certainly aimed towards steering the company in the right direction.