BREDEMA

TOURISM : Nouvelles Frontières revives Havas Voyages 

Source: Le Figaro
Date: 03/29/2005

According to our sources, the tour operator acquired the brand name from Vivendi Universal for the sum of 2 to 4 million euros.

Charles-Louis Havas, founder in 1835 of the world’s first information agency of the same name, would blush with joy. Just a few weeks ago, before buying the Havas Voyages brand name from Vivendi Universal, Nouvelles Frontières, French subsidiary of the German group TUI, commissioned a study on the French tourist industry’s brand names. Conducted by GFK, the fallout has jostled a few generally accepted ideas. In terms of unaided brand awareness, Havas Voyages (the first agency of which appeared on the scene in 1938, avenue de l’Opéra in Paris) comes in fourth just behind Fram, Club Med, and Nouvelles Frontières. Even more surprising, according to the majority of respondents, the travel agency closest to them is… Havas Voyages! And yet the name disappeared January 1, 2004. The German owner of the agencies, Thomas Cook, made the decision to abandon it in September 2003.

The story is a bit complicated. Flash-back to the year 2000, the year Vivendi Universal, owner of the Havas group, let go of two activities: the business travel activity, which was picked up by American Express, and the Havas Voyages network of 400 agencies. These were acquired for 290 million euros by the German group Condor und Neckermann (C&N), which would later become Thomas Cook.
Even though Vivendi had sold the distribution network, it remained the owner of the Havas Voyages brand name. After much negotiation, it was even decided that the brand name would only be used until June 2004, without being purchased from Vivendi. With no action taken by Thomas Cook, Nouvelles Frontières jumped at the chance to develop a network of a hundred or so exclusively franchise-operated agencies.

According to Eric Debry, president of the Nouvelles Frontières group, the brand’s mission will be to distribute TUI France products and those of the major French tour operator brand names, with the exception of Nouvelles Frontières products, which will continue to be distributed by its own network on an exclusive basis. The Nouvelles Frontières boss refuses to disclose the amount of the transaction. He does however contend that “this investment will have no impact on the group’s debt reduction objective”. The latter of which amounted to 98 million euros in 2004, the declared objective being to reduce it by half in 2005.

A bargain of a deal

Though unconfirmed by Nouvelles Frontières, information has it that the tour operator might have paid 2 to 4 million euros for the acquisition. If confirmed, this would have been a steal since, according to the experts we solicited, the brand could be worth much more. “Havas Voyages is a brand name with close to cult status but it didn’t have 36 000 potential buyers, says Laurent Maruani, Professor of Marketing at HEC (Graduate School of Business, France). In limbo, with no other buyers in the picture, a brand name is worthless. Even in the case of a legendary brand as mythical as Havas Voyages. It’s what's called a taker’s brand. It’s worth whatever someone is willing to put on the table”. For TUI, intent on building a solid brand portfolio in France, the brand name was a significant asset.

What price did it sell for? A rule of marketing is that a brand's price tag is that of the advertising campaign that will rebuild it. “One could imagine,” went on Laurent Maruani, “that the cost of the transaction topped 5 million euros. Frankly, if Nouvelles Frontières paid 3 million euros, the man at the helm pulled off the deal of the century”. Industrial property consultant Pierre Breese thinks these estimations are too low. “Imagine the time and money you’d need to attain that kind of recognition. I wouldn't be surprised if the price was close to 10 million euros”. Alain Kaiser, consultant in brand appraisal, believes “you’d have to count on 5 to 7 years to create a brand that wouldn't even begin to be as mythical. And an annual television campaign already costs 4 million euros a year”. What would Charles-Louis Havas have said about that?

By Christine Ducros