Vertical Integration and the Effect on the Travel and Tourism Essay Example

the tourism experience will be of more use and more popular with tourists.

This Is because It would mean that a tourist could buy al the aspects of their holiday from the one company.

Some strong vertical Integration has taken place In the travel and tourism Industry since the asses. The largest travel groups such as Thomson, Riotous (now known as Moderately) and Thomas Cook own the tour operators who are responsible for putting together the package holidays. The travel agencies who sell these package holidays to customers are also owned by these travel groups, as are the airlines which take the resists to their destinations.

This means that the travel agent at places like Thomas Cook or LUHN Poly will prefer to sell their own tour operators' holiday rather than those of others. These companies may also have links with car hire companies and hotel chains. So they can get these holidays at the cheapest prices possible and make a large profit from the customer.

The four largest tour operators In the UK dominate the holiday market. Together they sell about of the package holidays bought in the K. This makes it difficult for or the customer.

The recent takeover of Thomson by the German travel giant Presage for almost DMS$6 billion (US$2. 9 billion) shows that takeovers will carry on and the larger companies will continue to grow.

This means that there will be less competition in the market. Questions: . What is integration? Explain the difference between vertical and horizontal integration. 2. Explain the difference between forward vertical and backward vertical integration.