Friday, August 31, 2012

Mercury Travels - Excerpts from DNA 7th June 2012

Fifteen years ago, Ashwini Kakkar entered the travel industry bidding goodbye to a career with a leading MNC. And he doesn't regret it one bit. Currently the Executive Vice Chairman of Mercury Travels, Kakkar believes that his job brings smiles and joy to people's lives. "The travel industry
is more about sharing the good times because it mainly is a people's business. The fun element of the job makes it an amazing experience," he says. Working with a travel company that has the Oberoi legacy behind it, Kakkar feels that the biggest asset of Mercury its high standard of service. For customers, journeys are meant to be safe, luxurious and personalised, and this is exactly what Mercury Travels offers. With over 70 years of experience under their belt, the company's priority towards providing excellent hospitality and impeccable service became the driving force behind their reputation. Kakkar emphasizes on the company's motto of delivery, protection and knowledge that further strengthens this reputation. The company caters to popular public figures, celebrities as well as the middle class and that's the reason why people choose to travel with Mercury. "It is purely because people trust us and have faith in the services that we provide," says Kakkar. "Our management and employees believe in three important things - knowledge of the field, protection of customers and delivery of service. Our employees have always gone out of their way to help our customers as safety is a priority," says Kakkar who has played an important role in helping out customers on many occasions. He recalls fondly how Sushmita Sen once tweeted about his staff helping her and her kids in an emergency while she was travelling. Kakkar says that the company's unique offering is their grasp of various destinations and their ability to plan a trip customised to the needs of the customer. He explains that these destinations are usually recommended according to the travel experience the customer has. For example, firsttime international travellers choose short haul destinations like Singapore, Malaysia, Dubai, Sri Lanka and the likes, gradually moving towards Europe and then to newer travel destinations like Alaska and South America. "Europe is always combined with a UK trip as people generally have family or friends they want to visit. Also, the comfort of language helps in this case. These trips are a combination of bus, road, rail, air and cruise journeys. So, along with  different places to visit, there are many forms of travel also involved," he says. With branches across 30 cities in India and five globally, their services are available for every kind of customer. Kakkar thus stresses on how important customisation is for their clients. "Our aim is to keep every type of customer satisfied. The elderly require more attention and care, so we plan their trips differently because they like to see things at their own pace. We call the segment for retired individuals as 'silver grey'. It goes without saying that the honeymooners require a special atmosphere. For example, in Maldives, the bungalows we provide stand on water and have lights coming underneath a glass floor. We take care of these special things so that people have a great time travelling with us".

However, in recent times, the student segment has gained importance. Students who go abroad to study, opt to travel with Mercury says Kakkar. "Later, their parents also join them and wish to travel to places around the country they are studying in. We also have student groups who travel abroad on volunteer work." The company also ensures that students get their insurance done in case they have medical emergencies. "It is of utmost importance," he emphasizes. Thinking ahead, for both the industry and for Mercury Travels, Kakkar says that travel being one of the largest industries in the world, there is no limit to growth. The company has the best technology possible and nearly 400 employees, dedicated to maintaining the best standard of hospitality. And with convergence technology showing its magic, the experience is only going to get bigger and better. He believes that his personal growth runs parallel with that of the company. And, the Vice Chairman is himself a travel enthusiast. He says, “The more you travel, the more you realise how little you've travelled." And with those words, he departs for Shanghai.  

Wednesday, August 29, 2012

South Australia – Your family will just go WOW!

Which adorable animal comes to your mind when you think of Australia?
That’s right! Kangaroo. In South Australia, we’ve got a large, really large island called Kangaroo Island. Teeming with an incredibly diverse range of wildlife including over a million kangaroos. Wow!

To arrive at Kangaroo Island, you have to first fly into Adelaide. The capital of South Australia
is also the country’s capital of food, wine and festivals! Voted Australia’s most liveable city,
Adelaide is well connected with direct international and domestic flights in addition tointerstate coaches and train services. It’s a well planned city, easy to explore by foot, embraced
by the sea on one side and charming hills on the other. Base yourself here to explore Adelaide
Hills, Barossa Valley wine region and of course, Kangaroo Island.

Cricket fans love the charming Adelaide Oval ground, home to many historic matches. And to Sir Donald Bradman’s Museum, with the legendary batsman’s personal collection of memorabilia. Come, try your luck at the casino tables of Sky City Adelaide.

Shop till you drop. In Adelaide’s centre is Rundle Mall, with more than 600 shops in its many arcades. The Harbourtown Outlet Shopping is a one-stop destination for designer brands and homeware at 60 % daily discounts.
Foodies Heaven. Over 700 restaurants offer value for money Chinese, Italian, Thai, Australian and Indian cuisines. Great choice for vegetarians too. Say cheers with delicious South Australian wines.

A twenty minute drive takes you up to Adelaide Hills. Visit quaint towns, full of hertitage
homes, where time has stood still. Explore historic Hahndorf German village. From top of Mount Lofty Summit, Adelaide city and the ocean lie below your feet. At Cleland Wildlife Park, cuddle a koala and feed kangaroos. What a feeling!

An hour away from Adelaide, lies the picturesque, Tuscany-like landscape of the Barossa Valley. It’s the world’s most famous Shiraz wine producing region. Over 60 wineries invite you in for wine tasting. At the wine visitor centres of Jacobs Creek, Wolf Blass, learn all about how wine is made. In fact, blend your own wine at Penfolds winery. Put your name on the bottle and say cheers with friends back home. What a treat!

At Whispering Wall, whisper to your loved one 140 metres away! Visit Lyndoch Hill Rose Garden with 2000 varieties in bloom! Spend time at the Lyndoch Farm with its 60 varieties of lavender. From Menglers Hill, check out the Sculpture park and the spectacular view.

One third of Kangaroo Island is protected as conservation and national parks. Imagine this. Seals basking on quiet beaches. Koalas munching on gum trees. Echidnas wandering around without a care. Kangaroos and wallabies hopping and skipping at every turn. The award winning
Parndana Wildlife Park is famous for its birds. At the Kangaroo Island Penguin Centre, find out where Fairy Penguins go wandering at night.

You won’t believe your eyes when you sight Remarkable Rocks. Over the centuries, the wind and weather have carved out the most awesome sculptures from these ancient granite boulders. Nearby is Admirals Arch, from where you descend to the blue waters. Half an hour away is Seal Bay. From specially constructed platforms, listen to a large colony of Australian Sea Lions sing as they nurture their young.

Fancy a five star stay? Overlooking a dramatic coastline, Southern Ocean Lodge will welcome you. 21 luxurious guest suites, each with stylish sunken lounges, glass walled bathrooms and outdoor terraces. Plus a restaurant, bar, boutique and spa. Three and four star hotels are also available on the island.

So come to South Australia. Whether you are a nature lover, gastronomic foodie, wineconnoisseur or adventure seeker. Just remember any holiday to Australia is incomplete without Kangaroo Island. It’s a place that is sure to make your family go “WOW!”

Call Mercury Travels now

Saturday, August 11, 2012

Business India Excerpt

When Ashwini Kakkar, executive vice-chairman, bought a majority stake in Mercury Travels in 2006, it was an almost forgotten and a loss-making brand in the travel industry. Today, it’s a different story. Backed by a well-oiled management team, Kakkar’s passion and drive has turned the company into a profitable venture with differentiated positioning in the travel segment. The company has also transformed in terms of reach, technology and newer business models. Right from injecting fresh young blood into the company, growing to about 30 offices across the country and six offices internationally, to the brand being repositioned, Mercury Travels has been transformed today as ‘a one-stop travel shop’ for high-end clients. Its sales have grown from `127 crore about five years back, to `1,020 crore for the year ended March 2012. Mercury Travels has also clocked an ebidta of `10 crore.
Roll back in time, Mercury Travels, a 64-year-old company, has a legacy of its own and a rather illustrious history. It was started in 1948 by the legendary Rai Bahadur Mohan Singh Oberoi, father of P.R.S. Oberoi and founder of Oberoi Hotels. Later, Gautam Khanna (son-in law of Rai Bahadur) managed the company. The business was strategic to the hotel business as it fulfilled the travel and service needs of inbound travellers who checked into the hotel.  Also, tourists who came to Mercury Travels helped fill rooms. It was a rather symbiotic relationship between a hotel and travel company. Mercury did fairly well for a few decades. But, over time, not surprisingly, the focus shifted to the hotel business of the Oberois’.
“PRS, who continues to be chairman on our board, is a passionate hotelier and has developed some of the top class properties around the world,” says Kakkar. “Somewhere down the line, Mercury Travels got left behind. At the time I was on the Worldwide Board of Thomas Cook and it was being taken over by a Dubai-based company. Many of us decided to part ways as the new management was not in sync with our style of working. We were looking to partner with a company and prs was also looking to bring in new people to manage the brand, as it was making losses. We found that Mercury was one of the best companies in the travel domain that had the best service culture of welcoming guests with a namaskar.”
A win-win situation for both the parties as a jv was created, with Kakkar holding 74.9 per cent and East India Hotels owning about 25.1 per cent. Taking complete control over the company, Kakkar and his team spent a few months studying the market and formulating a strategy to move forward. Mercury, then, bore a jaded and worn-out look. Along with some fresh infusion of funds, the new management also decided to bring in fresh people, to inject some youthful energy. It also meant breaking off from being an Oberoi subsidiary to become an independent entity by itself. 
With about 70 people joining Kakkar from Thomas Cook, his core management team consisted of Aashutosh Akshikar, president & ceo; Ajay Bhatia, vice-president & coo; and Nancy Castelino, vice-president, marketing & hr. “Interestingly, we have all worked together for more than 15 years at Thomas Cook and each of us knew the others’ strengths and weaknesses. So, as a team, we work well,” adds a beaming Castelino, who plays a crucial role in training new recruits for the company. Ambitious plans Once the core team was in, there was no looking back and plans were mapped out. As the company grew to 400 employees, the team embarked on a technology revamp. “We realised that there has been a sea change in the way the travel business is now being conducted. So, we got ourselves Reuters terminals for foreign exchange business, developed the rainbow software which is a custom-built, point-of-sale travel software designed to speed up the time taken to complete transactions and increase efficiency, as well as online checks/database that guarantees accuracy and integrity. This software integrates into the Oracle backend financial. We got about 350 computers for our employees. Earlier, Mercury Travels only had two business centres – inbound travels and corporate. We decided to also go ahead with ‘outbound’, ‘foreign exchange’ and mice (meetings, incentives, conferences & exhibitions). Along with this, we added travel insurance and emergency services,” says Kakkar.
Mercury Travels consciously decided to stay away from group tours and focussed only on the higher-end clients. And, with all the business centres brought together, the team chalked out an ambitious path to be a one-stop travel company. “We have created a full line service company wherein we do multiple transactions with the same customer and earn commissions at various levels from hotels, airlines, insurance and foreign exchange,” says Kakkar, elaborating further on the business model. “It’s a composite model. Hotels pass on commissions on sales. Foreign exchange, is a high volume quick-turn business, and we see a lot of growth in the long term. Also, in the business-to-enterprise section, if a company does business of, say, `400 crore with us, we charge a flat fee of about 2 per cent.”
Akshikar, who brought in a rather holistic experience of the travel business from Thomas Cook to Mercury Travels, confesses that it was a rather tough decision on his part to move to a new set-up. “After getting the right kind of people to man our various sections, the next step was to go in for optimum network to garner a good reach,” he recalls. “We went in for total repositioning of the old Mercury brand logo. After the rebranding exercise, we embarked on a major marketing and advertising campaign to be on the clients’ memory. Each year, we spent `10-15 crore on advertising across the major metros.”
Though things were falling in place, the company went through a tough time in 2008, with the major terrorist attacks at the Taj and the Oberoi Hotels. Business came to a standstill and Mercury travels bore substantial losses. “The offices were shut down and we had to operate from an external environment,” reminisces Kakkar. “It was a terrible time and we did incur losses. Clients who were supposed to come never came and we never got the dollars to pay back the bank. Lot of issues cropped up and we had to pump in a lot of money into the company. In fact, it set us back by two years. But we slowly managed to bounce back.” Mercury Travels is based on the concept: ‘Knowledge, Protection and Delivery’. These are the three pillars of the company. “People continue to be our asset,” explains  Castelino. “We spent considerable time and money helping them gain countryspecific knowledge. The detailing too is important, as our experts should know even the finer nuances of destinations. Also, since we deal with high-end clients, protection and security are important. In the first year, we just sent our customers to 20-30 places where we have our contacts. Those are called familiarisation trips, which help in building knowledge. And delivery too plays a crucial role, as a single mistake can be a big disappointment. There can be many issues cropping up, sometimes here might be unavoidable circumstances too, but despite them, you have to ensure that things get done.” Broadening horizons After getting the infrastructure and the right people in place, the challenge for the team was to get the new businesses rolling. As an outbound business strategy, Mercury Travels decided to stay away from the git (group-inclusive traveller) segment. Instead, it decided to focus on the fit (free individual traveller) segment for high-end customers. Also, it soon became one of the few players who have the authorised dealer’s licence for foreign exchange, which is coveted in the industry. “The leisure outbound travel industry has been around for more than 25 years,” says Kakkar. “In 2007, it would have been a tough and challenging task for us to get into group travel, considering that there were already players like Cox & Kings, Thomas Cook, SOTC and Kesari. Also, it required huge investments. Group travel business is a ‘numbers’ business and we would have required more branches and huge advertising budgets. Also, with the economic boom in India, the emerging global trends made us realise that the leadership slot in the individual traveller segment wasn’t occupied by anybody. So, we went ahead with the  positioning that was available for us,” he adds. “In my experience, I have seen that, after a few group tours, clients feel more confident to experiment and travel on their own,” Kakkar further elaborates, throwing light on the global scenario.
“Even at Thomas Cook, we used to get queries from people who had done seven countries in, say, 12 days, but then wished to do only France in two weeks. Globally, we have ‘charter travel’. Today, many charters are coming to Goa for, say, £480, all inclusive. But since India does not have a flexible aviation policy, we don’t have outbound charters.” Over time, the company managed to get into the loop, catering to major companies, as well as high-end clients like cricketers, participants in beauty pageants, industrialists and politicians, who travel exclusively through Mercury. Among its major corporate clients are Hindujas and their group companies, Indian Oil, Ashok Leyland, Indus bank, ,Gulf Oil, Samsung Canon and Ambit Corporation and hospitals. Along with outbound travel, mice has also made considerable progress. “Corporates spend a large amount of money on incentive programmes for their employees. Companies in sectors like telecom, pharma and consumer goods, request customised itineraries. Here, our sales team plays a crucial role in getting the business,” says Castelino. Unlike many smaller companies, Mercury has offices in Hamburg, Frankfurt, London, Buenos Aires, New Jersey and New York. These offices generate business from the region and also support clients going there. The ‘foreign exchange’ department complements the travel business, but is a business centre in itself. “In the early days, it was a challenge for us to set up a full-fledged foreign exchange department,” says Ajay Bhatia, who handled foreign exchange at Thomas Cook. “But, within a year and a half, we were able to upgrade our licence from ‘money changer’ to ‘authorised dealer’. Our team managed to get the documentation together and get a manual ready. As a money changer, we are restricted to few transactions only – such as business travel or leisure travel. But foreign exchange has two components – retail and wholesale,” adds Bhatia. The ratio of wholesale to retail in the foreign exchange business is generally two-third to one-third. Mercury, like Thomas Cook, is one of the few non-bank authorised dealers. Outbound and inbound businesses have their own pattern and seasonality. For ‘outbound travel’, the preferred period is April-June, while for ‘inbound’ travel, it is October-March. It’s a rather cyclical business, but this is where corporate travel and foreign exchange pitch in for the company to make it smoothly functional through the year. “During the recession of 2008 and after the terror  ttacks, we only survived because of our foreign exchange business,” says Akshikar. “Though corporate travel and inbound were down, our outbound travellers were taking foreign exchange from us. In the foreign exchange business, the turnover in 2007 was about `20 crore, which has grown to nearly `700 crore in the current year. It is exponential growth.” Expansion drive Now, in its second phase, Mercury has chalked out an ambitious plan to move forward. The company has embarked on a distribution drive of distinct travel products and modules to travel agents across the country. With these modules, the Class A category of travel agents are also authorised to sell Mercury Holidays.

“In the leisure outbound business, we have country-specific modules and detailed brochures are distributed to our individual customers,” says Kakkar. “These have been created with a lot of care and with the help of our country specialists. If you have a 12 day trip to Spain and Italy, then a three-day trip for you in Venice as well as three days each in Rome and Milan have all been planned out. It has also been worked out whether you want to spend $100 or $300 per day in sightseeing and shopping. The next product we’re looking at is linked to convergence technology. Everything will soon converge onto that one device – be it Internet, social media, mobile commerce. We want travel to be a part of it.”
The Mercury team is also pondering over acquisitions and mergers as a way to move forward. Recently, they acquired a small company named Teztair travel, who brought their people and specialists with them. “We are in discussion with a UK company too, with the idea of acquiring it,” reveals Kakkar. “Also, we have purchased a stake in Explore Travel Channel and have a joint venture with Mercury Himalayan Exploration (MHE), which is headed by Narendra Kumar, a retired colonel and one of India’s best mountaineers, who has many Everest exploits to his credit. We own about 40 acres near Haridwar, where we offer adventure sports, white water rafting, skiing and trekking right up to Everest base camp. In fact, we have our own cottages and tent camps next to river Ganga. Some of our programmes are popular. MHE also conducts ice hockey tournaments and Himalayan rallies.”
So, where does the company see itself three years from now? “We plan to take our annual profits to about `40 crore by then,” says Akshikar. “The scenario in the air travel arena being what it is and considering what’s happening in the airline industry, one wouldn’t want to hazard a guess. But, the stated objective is that we would like our turnover to touch `3,000 crore in the next five years. Our ambition is to be among the top three players in India – currently, we are one of the top Five – along with Cox & Kings, Thomas Cook, Kuoni India and Carlson Wagonlit.” “Actually, we’re the second player after Thomas Cook, if we take in all the four segments together,” contends Akshikar, considering another point of view. “Carlson, which is one of the biggest players in the corporate travel side, doesn’t focus on the other services; Cox & Kings is into leisure in a big way, but is small in corporate travel and foreign exchange; Kuoni exists only in outbound, has a separate division for corporate travel and are almost non-existent in foreign exchange. To add to that, for the fifth year in a row, we have been clocking a 23 per cent growth rate.”
So, does the company plan to go public in the near future? “It’s too early for us to go public now,” replies Kakkar. “Perhaps, later... maybe about five years from now, when we have grown considerably in size.” The economically volatile atmosphere and inflation does affect the inflow of tourists and their ability to buy. “With the rupee weak and the dollar and euro so strong, the propensity of people to buy goes down. A tourist may have bought $1,000, when it was priced `45, but today, he would buy just $650. Also, international airfares have gone up considerably, pushing up the package price by, say, 20 per cent. But, fortunately, since we are dealing with highend customers, we’re still clocking profits,” elaborates Kakkar. With airlines cutting commissions and people shifting to online booking, the nature of the travel business has changed dramatically. “But, at Mercury Travels, we have changed our business model by charging transaction fees and management fees to customers, and implementing better buying,” says Castelino. “As far as online booking is concerned, only simple, pointto-point travel is ticketed on the Web. Nevertheless, we have also invested in technology, which will enable us to undertake b2e (business to enterprise transactions) online. Thus, any which way the situation changes, we are geared to handle it.” In the outbound segment, Mercury plans to open up more offices in different countries. “It’s all about relationship management – which needs to be co-ordinated at various levels,” says Castelino. “The customised itinerary has to pack the best experience and, for this, we work closely with all the National Tourism Boards. We have recently done  jointpromotions  with Australia, Switzerland, Japan, Ireland, Korean, Canada, Sydney and Singapore.”
Product training continues to be an important element for the company. Employees are encouraged to attend the courses designed by each national tourism board to get certified. “People are our real assets and it’s the passion for the business that drives it. The challenge is always finding the right people, who are ready to upgrade themselves, learn, acquire knowledge and build  contacts,” contends Kakkar.