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Agreements in the Package Holiday Industry and Market Opportunities Essay Example

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Agreements in the Package Holiday Industry and Market Opportunities

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Agreements in the Package Holiday Industry and Market Opportunities. Considering that package holidays contain different holiday elements, then it is accurate to state that different companies involved in traveling and tourism have to be involved in the holiday package industry. These companies could be flight companies, hotels and accommodation service providers as well as rental service providers. Different companies that deal with different aspects of the travel and tourism sector team up to provide all inclusive holiday packages to holiday makers (Ryan, 1991).These companies normally have to come to a certain level of understanding before they come up with a holiday package. For instance, a hotel or hotel chain may come to an agreement with a certain airline to offer certain holiday elements through a third party: a tour operator.

The economies of scale determine the buying power of tour operators. The same economies of scale also allow the tour operators to have a considerable level of control in the sale and distribution of holiday packages to travelers (Davies and Downward, 1998).Most of the agreements in the UK package holiday industry are collusive in nature. These agreements normally depend on the homogeneity of the products or services on offer, frequency of interaction and minimal uncertainty (Ryan, 1989). This means that if companies offering different elements of holiday services think that they can work together and get maximum benefits from the collision, they normally form a kind of a merger. These kinds of mergers are what give rise to tour operators who then offer services from different companies in a single package (Sheldon, 1986).Since there are different kinds of tour operators, the market is also divided according to the kind of holiday packages that they prefer. In the UK, the market is divided as follows: UK residents who tour within the country, UK residents who travel out of the country for their holidays, and non-UK tourists who tour the country (Davies and Downward, 1998). The largest tour operators in terms of market share include Thomason Travel Group Ltd, Airtours, first Choice Limited, Thomas Cook Group and Carlson Leisure (Gratton and Richards, 1997). The table below shows the market share for various travel and tour groups offering package holidays in the U.The UK market is both oligopolistic and competitive. This is because the market has both large companies and small ones offering the same kind of services. The big companies are the ones that are. Agreements in the Package Holiday Industry and Market Opportunities.

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Aguiló, E, Alegre, J and Sard, M. “Market structure of the German and British tour operators’ industry through the analysis of the package tour prices in the Balearic Islands”. Tourism Economics, Vol. 9, No. 1, pp. 46-72

Davies, B and Downward, P, 1998, “Competition and Contestability in the UK Package Tour Industry: Some Empirical Observations”, Working Paper, 98.3

Evans, N.G and Stabler, M.J, 1995, “A Future for the Package Tour Operator in the 21st Century”, Tourism Economics, Vol 1, No. 3, pp. 245-263

Gratton, C and Richards, G., 1997, “Structural Change in the European Package Tour Industry: UK and German Comparisons”, Tourism Economics, Vol. 3, No. 3, pp. 213-226

Ryan, C, 1989, “Trends Past and Present in the Package Holiday Industry”, The Service Industries Journal, Vol. 9, No. 1, pp. 61-78

Ryan, C, 1991, “UK Package Holiday Industry”, Tourism Management, Vol. 12, No. 1, pp. 76-77

Sheldon, P.J, 1986, “The Tour Operator Industry: An Analysis”, Annals of Tourism Research, Vol. 13, pp349 – 365

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preview essay on Agreements in the Package Holiday Industry and Market Opportunities
  • Pages: 7 (1750 words)
  • Document Type: Essay
  • Subject: Tourism
  • Level: Undergraduate
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