New entrant Ving has charter operators gearing up to fight
The tourism market, as represented in air ticket sales, has grown annually by more than 20% in dollar terms over the past two years, said Tim Hyland, managing director of Travel Express. (See also the list, page 12.)
While the high period of growth that started in 1989 may begin to slow this year, the growth rate is expected to be at least 10% through the turn of the century, Hyland said.
"I still predict heavy growth," Hyland said. "And charters are definitely an area of strong growth."
Ving, a division of the Scandinavian Leisure Group, thinks the same. The company came to Poland in February determined to take a chunk out of this key market, said Michal Sedzielewski, Ving's sales director.
"We want to have 30% of the (charter) market," Sedzielewski added. "But we're not sure when this is going to happen - in one year, three years or five years."
Ving accounted for more than one-third of Scandinavian Leisure Group's 1997 turnover of $1 billion and sold 850,000 vacation packages with a $28 million profit. The Group holds 50% of the Scandinavian tourist market.
In February, Ving opened its first five Polish offices in Warsaw, Gdynia, lodz and Poznan and later in Krakow. Its sales goal for 1998 was 35,000 charter packages, which would give it 17.5% of the Polish charter market.
And Ving's strong words, backed by a strong financial base, have many Polish travel bureaus on their guard and complaining that they are no match for the travel super-bureau.
"Ving is much more powerful, they spend lots of money on promotion," said Grzegorz Baszczynski, vice-president of Rainbow Tours. "Medium-sized tour operators can't really compete."
While Rainbow Tours' general sales have increased 46% in the last year, the charter airline branch of its operations (which accounts for almost one-third of its business) has seen a 10% drop in sales, Baszczynski said.
"There has definitely been a big influence," Baszczynski added.
While Ving officials refused to comment on how much they have spent on promotion here, this country is their anchor in Central Europe, Sedzielewski said.
"This is the first country Ving is operating in in Central Europe," Sedzielewski said, adding that Ving runs television and newspaper commercials every day. "The most important thing is the large potential of the market, with 40 million residents."
Even the Polish Travel Bureau Orbis, which under communism had a lock on the market, believes that Ving could pose a serious challenge, said Jolanta Jedlinska, Orbis' marketing manager.
"Of course, it (Ving) is our competitor," Jedlinska said. "But we are not too afraid. We already have a well established clientele."
Orbis, which had revenue of zl. 404 million ($117 million) in 1997, plans to sell 15,000 vacation packages by the end of 1998. But Jedlinska conceded that Ving could take 35,000 packages out of Orbis' potential market if it spends enough on promotion.
Even if Ving has already made its name known on the charter market, though, tour operators not associated primarily with charter flights are unshaken.
Int Express Travel, which led the market in air ticket sales last year with more than $60 million in revenue, is not likely to be toppled from its Polish throne by Ving, said Karina Skurtys, a representative in Int Express Travel's marketing department.
"They're doing mainly tourist trips," Skurtys said, adding that 80% of Int Express Travel's revenues are from ticket sales. "This is not our main branch."
To maintain its leading position, Int Express Travel will continue to offer a 5-6% discount to all its member companies, Skurtys said. He added that the membership roll, which now stands at 1,500, has grown annually by 200 companies.
"We have both smaller and bigger companies," Skurtys said, adding that member companies account for up to 80% of its sales. "We've always been going in this direction."
Sales for 1998 are already up 30% from last year, Skurtys added.
And Int Express Travel officials warned that Ving's size alone won't guarantee it success here as the market is currently crowded and other agencies will fight the new entrant.
"Entering the market a few years back was much easier," said Dariusz Szczesny, country manager for Int Express Travel.
But Ving is confident that its late arrival will mean little in the long run. "We think that this is the most appropriate moment," said Ving's Sedzielewski.
And what Poland lacks, Sedzielewski said, is a thorough travel service that sees customers through their whole vacation, from the planning stage to their return to a Polish airport.
"We want to enter the market with a different concept of sales," Sedzielewski said. "We know what happens to our client from the very start to the very end."
But the Ving approach is not likely to work in a country where English is not widely spoken, said Rainbow Tours' Baszczynski. While Polish tour operators often promise a Polish guide for the length of their trips, Ving may be forced to group together tour package clients of various nationalities to run a full trip, Baszczynski said.
"We definitely send a Polish speaking person," he added.
And the Polish language is only one way that Rainbow Tours plans to keep Poles feeling at home even abroad, Baszczynski said.
"We try to add a personal touch," he added. "With our packages you just have contact with one person, who you like. Theirs is a much bigger organization, it's just like a machine."
And other travel agencies, like Kalinka Travel, are ducking the potential Ving threat by aiming their services at niche markets Ving does not delve into.
"They don't operate in the east," said Jozef Bryll, Kalinka's director. "We believe we're very specialized from this point of view."
More than 80% of Kalinka's tour packages are to countries such as Bielarussia, Russia, Ukraine and Lithuania, Bryll said.
"The most important market for us is Lithuania," Bryll said. "We mainly cater to health spa and resort clients. We also have sentimental trips."
While the high period of growth that started in 1989 may begin to slow this year, the growth rate is expected to be at least 10% through the turn of the century, Hyland said.
"I still predict heavy growth," Hyland said. "And charters are definitely an area of strong growth."
Ving, a division of the Scandinavian Leisure Group, thinks the same. The company came to Poland in February determined to take a chunk out of this key market, said Michal Sedzielewski, Ving's sales director.
"We want to have 30% of the (charter) market," Sedzielewski added. "But we're not sure when this is going to happen - in one year, three years or five years."
Ving accounted for more than one-third of Scandinavian Leisure Group's 1997 turnover of $1 billion and sold 850,000 vacation packages with a $28 million profit. The Group holds 50% of the Scandinavian tourist market.
In February, Ving opened its first five Polish offices in Warsaw, Gdynia, lodz and Poznan and later in Krakow. Its sales goal for 1998 was 35,000 charter packages, which would give it 17.5% of the Polish charter market.
And Ving's strong words, backed by a strong financial base, have many Polish travel bureaus on their guard and complaining that they are no match for the travel super-bureau.
"Ving is much more powerful, they spend lots of money on promotion," said Grzegorz Baszczynski, vice-president of Rainbow Tours. "Medium-sized tour operators can't really compete."
While Rainbow Tours' general sales have increased 46% in the last year, the charter airline branch of its operations (which accounts for almost one-third of its business) has seen a 10% drop in sales, Baszczynski said.
"There has definitely been a big influence," Baszczynski added.
While Ving officials refused to comment on how much they have spent on promotion here, this country is their anchor in Central Europe, Sedzielewski said.
"This is the first country Ving is operating in in Central Europe," Sedzielewski said, adding that Ving runs television and newspaper commercials every day. "The most important thing is the large potential of the market, with 40 million residents."
Even the Polish Travel Bureau Orbis, which under communism had a lock on the market, believes that Ving could pose a serious challenge, said Jolanta Jedlinska, Orbis' marketing manager.
"Of course, it (Ving) is our competitor," Jedlinska said. "But we are not too afraid. We already have a well established clientele."
Orbis, which had revenue of zl. 404 million ($117 million) in 1997, plans to sell 15,000 vacation packages by the end of 1998. But Jedlinska conceded that Ving could take 35,000 packages out of Orbis' potential market if it spends enough on promotion.
Even if Ving has already made its name known on the charter market, though, tour operators not associated primarily with charter flights are unshaken.
Int Express Travel, which led the market in air ticket sales last year with more than $60 million in revenue, is not likely to be toppled from its Polish throne by Ving, said Karina Skurtys, a representative in Int Express Travel's marketing department.
"They're doing mainly tourist trips," Skurtys said, adding that 80% of Int Express Travel's revenues are from ticket sales. "This is not our main branch."
To maintain its leading position, Int Express Travel will continue to offer a 5-6% discount to all its member companies, Skurtys said. He added that the membership roll, which now stands at 1,500, has grown annually by 200 companies.
"We have both smaller and bigger companies," Skurtys said, adding that member companies account for up to 80% of its sales. "We've always been going in this direction."
Sales for 1998 are already up 30% from last year, Skurtys added.
And Int Express Travel officials warned that Ving's size alone won't guarantee it success here as the market is currently crowded and other agencies will fight the new entrant.
"Entering the market a few years back was much easier," said Dariusz Szczesny, country manager for Int Express Travel.
But Ving is confident that its late arrival will mean little in the long run. "We think that this is the most appropriate moment," said Ving's Sedzielewski.
And what Poland lacks, Sedzielewski said, is a thorough travel service that sees customers through their whole vacation, from the planning stage to their return to a Polish airport.
"We want to enter the market with a different concept of sales," Sedzielewski said. "We know what happens to our client from the very start to the very end."
But the Ving approach is not likely to work in a country where English is not widely spoken, said Rainbow Tours' Baszczynski. While Polish tour operators often promise a Polish guide for the length of their trips, Ving may be forced to group together tour package clients of various nationalities to run a full trip, Baszczynski said.
"We definitely send a Polish speaking person," he added.
And the Polish language is only one way that Rainbow Tours plans to keep Poles feeling at home even abroad, Baszczynski said.
"We try to add a personal touch," he added. "With our packages you just have contact with one person, who you like. Theirs is a much bigger organization, it's just like a machine."
And other travel agencies, like Kalinka Travel, are ducking the potential Ving threat by aiming their services at niche markets Ving does not delve into.
"They don't operate in the east," said Jozef Bryll, Kalinka's director. "We believe we're very specialized from this point of view."
More than 80% of Kalinka's tour packages are to countries such as Bielarussia, Russia, Ukraine and Lithuania, Bryll said.
"The most important market for us is Lithuania," Bryll said. "We mainly cater to health spa and resort clients. We also have sentimental trips."
