Migros will sell Hotelplan to Germany in the next few days

There was speculation for weeks. Insiders from both companies agree that the decision has now been made: Migros is to sell its travel subsidiary Hotelplan to the Dertour Group, a subsidiary of the German retail giant Rewe. And I want to inform you about it before Christmas.

According to industry circles, Dertour and a Swiss family office were recently interested in purchasing the property. In Germany, Dertour is number two in the travel market behind Tui. Dertour Suisse is also one of the largest tour operators in Switzerland, with the well-known brands Kuoni and Helvetic Tours. The company employs around 950 people and operates around 70 travel agencies in Switzerland.

Hotelplan employs around 850 people in Switzerland and Germany and operates 82 travel agency branches in this country. The group also includes a subsidiary in Great Britain, a small business travel division, the individual travel provider Travelhouse and the holiday apartment provider Interhome.

A “symbolic amount” is expected for Hotelplan

At the beginning of the year, Migros decided to concentrate on its core businesses and sell off the other areas, including the travel business. However, the retailer cannot hope for much from the sale: As far as the selling price of Hotelplan is concerned, industry experts are assuming an amount between 140 and 200 million francs. With an Ebitda margin of 1.5 percent, little more can be expected. Margins between 1.5 and 2.3 percent are normal in the travel industry.

However, Hotelplan still owes Migros 100 million francs. Because instead of applying for state aid during Corona, the retailer stepped in with a financial injection. This will further reduce the price.

Interhome is considered to be significantly more valuable. Experts value the holiday apartment provider at 40 to 60 million francs. As the German trade magazine “FVW Traveltalk” reported, Dertour has formed a consortium with the Berlin holiday apartment specialist Hometogo. Hometogo would take over Interhome if purchased.

The most valuable thing about Hotelplan is Interhome, says an industry expert. He assumes that Migros will only receive a symbolic amount for Hotelplan. Because the buyer can hardly do anything with the travel business, especially the package travel business, and would sell or process it. Kuoni was also “given away” to Dertour at the time.

Two brands mean more costs

So what will remain of Hotelplan if Dertour takes over? The expectation in the travel industry is that Dertour will fillet the entire business and sell or cut it. The branches are also likely to be affected by this. With Kuoni and Hotelplan, Dertour would operate 152 locations in Switzerland. And where Hotelplan is present, Kuoni is usually not far either.

André Lüthi, President of Globetrotter, sees two possible strategies for Dertour: He renames all Hotelplan branches to Kuoni or keeps both brands. “In my opinion, the latter would be a far better solution because Hotelplan has a good customer base and is established in Switzerland,” he says. This could save more branches from closure. “Managing two brands also means more costs,” says Lüthi.

Not only Lüthi is convinced that Dertour will reduce duplication, but other industry experts are also convinced. Lüthi sees jobs at risk, especially in the back office, IT and tour operators for abroad. Both companies have specialists for different travel regions such as Asia, Africa or America.

On the other hand, the Kuoni subsidiary could benefit from the urgently needed personnel. Various sources confirm that Kuoni is struggling with the lack of staff.

It is unclear what requirements Migros can impose on the buyer regarding the protection of staff in order to protect its reputation as a social employer.

Takeover as a market shakeout

Opinions differ when it comes to the question of whether customers can benefit from the takeover. Some say that Dertour’s enormous purchasing power means you get better deals. Others, however, consider falling prices to be unrealistic because they are already low and adjusted to the level in the EU. “This takeover is primarily about a market shakeout,” says an industry insider.

At Migros it is said that the sales process is “going well” and is generating “great interest”. Discussions are being held with several potential interested parties, including for the Hotelplan Group as a whole.

With the takeover by Dertour, another major Swiss travel provider would come into German hands after Kuoni. And the Swiss has already been sold to Germany. “Are we Swiss no longer able to make money with large tourism companies?” asks André Lüthi.

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