The UK air inclusive‐tour industry: a reassessment of the competitive positioning of the ‘independent’ sector

Abstract

This paper investigates the increasing concentration in the UK air inclusive-tour (AIT) market and the behaviour of the dominant companies (Thomson, Airtours, First Choice and Thomas Cook) operating in the sector. Arguments relating to the theoretical organisational structure of the industry are explored and regulatory investigations that have taken place are discussed. Research evidence as to the competitive position of independent tour operators in the overall UK AIT market is provided. The research indicates that a key area of dif®culty for the independent sector relates to the provision of charter airline capacity although access to distribution channels and the ability to contract accommodation are viewed as further concerns. The paper concludes that regulatory authorities are faced with trying to ensure that diversity is maintained while at the same time ensuring any economies of scale derived from consolidation of the sector are passed on to consumers. In order to properly understand the true effects of industrial concentration the assembled package must be dissembled into its component parts and an increasingly a panEuropean perspective is necessary.

The perception of small and medium sized tourism accommodation providers on the impacts of the tour operators’ power in Eastern Mediterranean

“…For instance, the British market, which is one of the main generators of intra-European leisure tourism flows, experiences a marked polarisation in the tour operation industry (Bywater, 2001;Evans, 2001 This can be mainly attributed to the fact that large TOs, through their subsidiaries charter airlines, controlled in 1999 almost 94% of the international charter airline traffic from the UK in terms of passengers carried (C.A.A., 2000). In Greece, where the field study took place, statistics reveal that the five largest British TOs control around 70% of the British tourism flows to almost every Greek mass tourism destination ( Figure 1).…”

Airline business strategy

“…The air inclusive-tour industry's success in using charter flights is attributed to the ability of operators to control the distribution channels, either through physical stores (still predominant in the UK even in the current age of electronic distribution channels) or online reservation systems. This provides them with buying power, used against smaller accommodation providers based in less-developed countries in Europe or overseas and a deregulated air transport environment fostering the flourishing of a myriad of different types of airline business models (Evans, 2001a). In a number of countries, charter flights have also been offered in isolation from other tourism products, nearly competing with LCCs in the budget leisure travel segment.…”