Of course, there maybe several smaller firms too but the overall trend in the industry is consolidation through buy-out and acquisitions. The rationale for the travel industry (especially the holiday travel market) is an end-to-end delivery system, starting from inquiry, planning, hotel reservation, plane ticket, sightseeing, sports activities and the return trip. Towards this end, big travel firms are well positioned to take advantage of their wider geographical reach and global delivery systems. The worldwide travel industry can be considered as a generic product in many sense. Although anybody can offer an exotic or out-of-the-way destination, any tourism or travel holiday product can be easily duplicated by any tour operator as the industry has low barriers to entry of new players. This means another tour operator can offer essentially the same type of holiday experience that renders holiday packages more like a commoditised product. It is hard to maintain a competitive advantage for long periods when there are no differentiating factors or price advantages except through discounting. Along this line, the only competitive advantage left is the ability to deliver all the travel-related products like inquiry, planning, ticket and hotel reservations and bookings from only one vendor called vertical integration. The Virgin Companies.
Papworth, B. “Crisis? What Crisis?” The Buying Business Travel Magazine. The Interview. (May – June 2009). Accessed 20 August 2009 from http://www.carlsonwagonlit.com/export/sites/cwt/en/global/news_and_media/cwt_in_the_media/print/cwtpress/200905_interview_anderson_bbtm_en.pdf
Kim, Chan W. & Mauborgne, Renée. Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant. Boston, MA: Harvard Business Press, 2005.
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