Holiday Rivals Join Forces

First Choice Holidays has joined forces with one of its rivals, German company TUI Travel in a merger designed to combat the fall in sales which has resulted from the demise of the traditional package holiday. The two giants of the travel industry confirm they will save around £100 million a year through the link-up, which is expected to be completed by the third quarter of 2007 and create anticipated revenue of more than £12 billion a year.

TUI which operates Thomson Holidays already employs around 8,000 British staff, from a total of approximately 730 branches nationwide. The merger creates a new company which will be known as TUI Travel and will be based in London. Existing shareholders at TUI will own 51%, whilst First Choice shareholders will have 49%.

The industry has had to take notice of families now preferring to put their own holidays together with budget airlines and their own hotel bookings. As a result, only 31% of people now take a package holiday, the lowest ratio in 30 years. Package holiday sales have fallen by 14 per cent in four years in contrast to 45 % rise in people making their own plans.

In a joint statement, TUI and First Choice admitted that travel tastes had changed. “Consumers demand flexibility and choice, seek new life experiences and look to access travel content through a number of points of sale, most notably the internet.” It is the internet where most holidaymakers will now make their plans, with companies like directline-holidays.co.uk leading the line in offering customers millions of holidays in a single search from a number of different tour operators.