Who owns what?

Such has been the interest shown in my blog about All Inclusive (AI) holidays, it has become clear that there is a great misconception regarding holiday companies where what holidaymakers think are separate companies are in fact little more than ‘brands that are owned by a very small number of conglomerates.

     The story of the UKs holiday air travel business has become so convoluted over the years for a long time it was almost impossible to know who actually owned what. Both holiday companies and in-house holiday airlines were ‘re-badged’ or ‘re-branded’, merged, taken over and or disappeared, it is worth having something of a ’bring up to date’.

            The big tour operators had grown larger through aggressive acquisition and also moved into foreign markets. Consolidation raised new fears among small companies, whose campaign for what they saw as fairer competition, supported by consumer lobbyists, finally prompted a reference to the Monopolies and Mergers Commission in November 1996. The cause was vertical integration, the ownership of travel agencies, charter airlines and tour operations by the same parent group. The Office of Fair Trading had already looked at this issue in 1993, and decided a reference was not justified. But power wielded by the major groups had rapidly intensified. Five companies found themselves under the scrutiny: Thomson, which had some 24.6% of the foreign package market in 1996; Airtours, which had 15.9%; First Choice, with 10.1%; Sunworld, which had just been bought by Thomas Cook; and Inspirations, which had 2.3% and was also destined to be swallowed up by Cook’s. Of these, only First Choice did not at that time own a chain of agencies, though Thomas Cook held a stake in it.

            The Commission’s report was made public in December 1997. To the dismay of many it concluded there was still plenty of competition in the industry and that there was no need to sharpen it by forcing the big groups to shed any of their component parts. Players came, it said, and players went. There was no significant barrier to entry either as a tour operator or retailer.

            There were some minor items that needed to be put right. The Commission stated that the practice among agents of tying high priced compulsory travel insurance to bargains was likely to mislead customers into thinking they were getting a bigger price cut than was really the case. It also criticized ‘most favoured customer clauses' in agreements between operator and agent. These obliged the retailer to cut the price of that operator’s packages in line with discounts from other tour firms. The Commission decided they could discourage agents from discounts which they would otherwise be prepared to offer. And it urged that the big groups should make clearer to consumers exactly which operators were linked with which agents. The Government said it would take action on all three, but while the first two practices were quickly outlawed, the third, ensuring greater transparency of ownership, proved stubbornly difficult to achieve.

            The report caused a few minor difficulties but it blew open the doors for a rush of takeovers. Cook’s linked up with the Carlson Leisure Group, with over a thousand owned or affiliated agencies, tour operations including Inspirations and its airline, Caledonian. Airtours bought Panorama and two other operators. Thomson’s shopping spree included the Simply Travel and Magic groups, Headwater and ski operator Crystal Holidays. First Choice acquired long-haul operator Hayes and Jarvis and  winter sports firm, Flexiski.

            Foreign ownership was not new to the industry. Thomsons had a Canadian parenthood. Inghams and Cosmos were Swiss owned. However, when the Midland Bank sold Thomas Cook for £200 million to LTU in June 1992, it seemed a turning point. LTU was Germany’s third biggest tour operator with 17% of that country’s package market. Thomas Cook was a symbol of a things British. It was not long before UK companies were operating in other European countries. Airtours moved into the German market, then Scandinavia, Belgium, Holland and France, with a large slice of the organisations owned by the American Carnival Cruise Lines. First Choice bought the Spanish company, Barcelo, then announced it would target markets so far left untapped by its rivals, such as those in Greece and Italy.

            Thomsons launched operations in six other countries - Germany, Ireland, Sweden, Norway, Denmark, Finland and Poland. Its move abroad helped to make it, like Cook’s, a target of German interest. Still Britain’s biggest tour operator, it had been through difficult times since its flotation on the London Stock Exchange in 1998. In April, 2000, German travel company C&N Touristic, jointly owned by Lufthansa and the stores chain Karstadt Quelle, approached Thomson with an offer of 130p per share. The UK firm, 23% owned by the Canadian Thomson family through its Woodbridge holding company and roughly 20 per cent owned by small shareholders, many lured in by the prospect of cut-price holidays, rejected the approach. But it left the door ajar for C&N should the Germans come back with a better bid. C&N eventually raised its offer to l60p, valuing Thomson at £l.6 billion. Its management thought it had sealed the deal, but it was beaten to the post by German rival Preussag, the former industrial conglomerate which owned TUI, Europe’s biggest tour operation, and which had acquired a controlling stake in Thomas Cook. Preussag agreed to pay £1.8 billion.

            The deal created a giant. Between them they operated 106 aircraft and over 4000 High Street travel agencies. Preussag had to agree to sell its 60 per cent stake in Thomas Cook in order to secure approval from the European Commission. Westdeutsche Bank, owner of one-third of Preussag, was also obliged to sell its state in Cook’s.

            And so to details.

Lunn Poly

Lunn Poly was at one time the largest chain of travel agents in the United Kingdom. The company originated from two successful travel agencies established in the 1890s: The Polytechnic Touring Association and Sir Henry Lunn Travel. Both firms were acquired in the 1950s by the Harold Bamberg’s British Eagle airline group, and combined into Lunn Poly during 1965. It became a nationalised industry as part of the Transport Holding Company (THC).

            In June 1971, Sunair bought Lunn Poly from the THC for £175,000. The next year, the company became part of Thomson Travel Group, along the way it acquired ten John Camkin Travel shops in the Midlands -which increased the number of shops from less than 30 to nearly 500 by 1990. It is now owned by TUI Northern Europe, a subsidiary of the German conglomerate TUI AG.

            When TUI UK rebranded Britannia Airways as Thomsonfly in November 2003, the company insisted that there were no plans to rebrand Lunn Poly. That ‘promise’ lasted a year, when on 2 November 2004, the announcement was made that Lunn Poly was to be rebranded as Thomson in order to create a so-called ‘powerbrand’. TUI UK announced that all 780 Lunn Poly shops in the United Kingdom would be renamed to Thomson before the peak holiday booking period started on 26 December 2004.

Thomas Cook & Son

The company's name was altered from Thomas Cook & Son, Ltd, to Thomas Cook Ltd around 1974, and the company's Publishing Office was moved from London to Peterborough in July of the same year, where locally it is still known as ‘TC’.

            After restructuring the company and re-entering the traveler’s cheque business the company prospered again. During the 1980s Thomas Cook had its most visible business presence in the U.S., including robust travelers cheque sales to regional U.S. banks. The company had enough business critical mass to set up a computer centre near Princeton, New Jersey. Robert Maxwell bought substantial holdings in the company in 1988. He was expected to sell his holdings quickly as he was a publisher rather than a travel agent. However, when Crimson/Heritage purchased the U.S. division of Thomas Cook for US$1.3 billion in 1989, he still maintained a substantial interest in the company until his death.

            In June 1992, following the acquisition of Midland Bank by HSBC, Thomas Cook was sold to the German bank Westdeutsche Landesbank (WestLB) and the charter airline LTU Group for £200 million.

            In September 1994 American Express (Amex) bought the corporate travel interests of Thomas Cook Travel Inc. which represented about ten percent of the British company's total revenue. However Amex was not able to buy the venerable Thomas Cook name; an American Express affiliate, Cook Travel Inc., had been operating under that name since 1991 in the United States.

            Due to contractual difficulties LTU Group sold its 10% shares to WestLB in May 1995. During 1996 the company bought short-haul operator Sunworld and European city-breaks tour group Time Off. Within three years the company had combined Sunworld, Sunset, Inspirations, Flying Colours and Caledonian Airways into the JMC (for John Mason Cook) brand.

            On 2 February 1999 the Carlson Leisure Group merged with Thomas Cook into a holding company owned by West LB, Carlson Inc and Preussag Aktiengesellschaft (‘Preussag’).

            However, in mid-2000 Preussag acquired Thomas Cook's rival Thomson Travel and was forced to sell its majority 50.1% stake in Thomas Cook by regulatory authorities.

            In 2000, the company announced its intention to sell its Financial Services division, to concentrate on tours and holidays. In March 2001 the Financial Services division was sold to Travelex, who retained the right to use the Thomas Cook brand on Traveller's Cheques for 5 years.

            After the market depression, particularly following the 2001 September 11 attacks, the company started a disinvestment programme, disposing of subsidiaries and business ventures.

            In 2002 Thomas Cook was acquired by the German company C&N Touristic AG, which later changed its name to Thomas Cook AG.

            In February 2007, it was announced that the Thomas Cook AG and MyTravel Group plc were to merge. The companies announced they expected to make savings of over £75 million a year in savings following the integration of both businesses. Under the terms of the merger, the owners of Thomas Cook AG, KarstadtQuelle (later Arcandor), owned 52% of the new group. The shareholders of MyTravel Group owned the remaining 48% share. The merger was completed in June 2007, and took place through the formation of 'NewCo' which effectively purchased MyTravel and Thomas Cook and was then listed on the London Stock Exchange under the name of Thomas Cook Group plc.

            On 14 February 2008, Thomas Cook bought booking website Hotels4U.com for £21.8 million. On 6 March 2008, the company bought back its licence to operate the Thomas Cook brand in the Middle East and Asia from the Dubai Investment Group for an amount estimated to be around 249 million euros. In April 2008 Thomas Cook bought the luxury travel firm Elegant Resorts from its founders Geoff Moss and Barbara Catchpole for an undisclosed figure. The company took over Preston-based Gold Medal International, owner of NetFlights, in a deal worth £87 million in December 2008.

            On 8 March 2009 Thomas Cook signed a deal with Octopus Media Technology to host, upload, and provide an online video player for Thomas Cook TV. In Spring 2009 Thomas Cook UK signed a deal with International Entertainment Supplier The E3 Group, to exclusively supply entertainment to the group.

            In June 2009, Thomas Cook's majority shareholder Arcandor filed for bankruptcy, although the group was not affected. Arcandor's shares in Thomas Cook were sold by its creditor banks in September 2009.

            In July 2010, Thomas Cook Group bought German tourism company Öger Tours, which was owned by Vural Öger.

            It was announced on 8 October 2010 that Thomas Cook Group was to merge its branch network with that of The Co-operative Travel to create the UK's largest travel network. The deal saw the new network 70%-owned by Thomas Cook and 30%-owned by Co-operative Travel. Thomas Cook's Going Places branded branches were rebranded under the Co-operative's label.

            On 22 November 2011, Thomas Cook shares lost about three quarters of their value on the London Stock Exchange after the company announced it was in talks with its banks about increasing borrowing by some £100 million but the shares recovered somewhat the following day. There were also reports that the company was planning to close 200 of its 1,200 travel agencies and foreign exchange offices.

            On 1 July 2013, Thomas Cook announced that it would cease publishing the Thomas Cook European Timetable, along with closure of the rest of its publishing business. The final edition of the timetable was published in August 2013.

            Thomas Cook Group operates in five main divisions, UK, Central Europe, German airlines, West Europe and Northern Europe.

            With a joint fleet, at merger, of 97 aircraft, 2,926 stores, 32,722 employees, and over 19.1 million annual customers, the new group became the second largest travel company in Europe and the UK, behind TUI Travel.

Club 18-30

In 1991, International Leisure Group -  the then-owners of Club 18-30 collapsed and was taken over as a management buy-out backed by venture capitalists County NatWest Ventures, Grosvenor Capital and Causeway Capital. After being briefly rebranded as The Club due to regulatory rules precluding the use of the name for three years, it reverted to the original name in 1994. In 1995 the company was sold for  £9.75m as a part of a ‘bimbo’ with various venture capitalists including Royal Sun Alliance and others and incorporated with Sunset Holidays and the newly formed airline Flying Colours. (Total deal £40m) In 1998 Thomas Cook acquired Flying Colours for £57.5m.

            Club 18-30 was subsequently incorporated into Thomas Cook’s JMC brand of travel companies which included the operating brands Flying Colours, Sunworld, Sunset, Inspirations and Caledonian Airways. In 2002, following a strategic review of the business, the management company UP Trips, was formed to ensure that Club 18-30 retained its dominant position in the youth market by providing dynamic package offering. However, by 2008, the UpTrips Management company dissolved with Club 18-30 once more a key product within the Thomas Cook portfolio.

MyTravel

MyTravel Group PLC was a package holiday company based in the United Kingdom. The group included brands such as Airtours, Aspro, Cresta, Direct Holidays, Escapades, Manos and Panorama in the UK and Ireland, Sunquest Vacations and ALBA Tours in North America, and Ving, Always, Tjæreborg, Spies, Skibby, MyTravel Tango, Bridge and Saga Solreiser in Scandinavia. The company included an in-house airline, MyTravel Airways, however, following the merger of MyTravel and Thomas Cook AG on 19 June 2007, these brands passed to the new combined Thomas Cook Group plc.

            The Group was a FTSE 250 listed company with a retail estate of over 700 shops and a total ownership of 31 aircraft, 81 hotels and resorts, 14,600 employees and a customer base of over 5.7 million people worldwide.

            The group was founded under the Airtours brand in 1972, when David Crossland purchased a series of small travel agencies in Lancashire, United Kingdom.

            Crossland  had started work for Althams, a travel agency in Burnley, the town of his birth in 1963. After leaving school with three O-levels, his choices were limited. He stamped brochures and made the coffee. At 18 he was made manager of another Burnley agency called Central Travel.  After a couple of years with a company called Silver Wing, which operated holidays to the Channel Islands, he joined a start-up firm called Travelplan. His big break came on Christmas Eve, 1971, when an elderly childless couple offered to sell him their two travel agency shops. Travelplan wanted to buy them out but the couple said they would rather he bought them.  

            David Crossland purchased Pendle Travel Services, a travel agency business consisting of just two stores in Lancashire. A second travel agency business was acquired shortly after from Albert and Ivy Roberts who had registered it using their initials, A.I.R. Tours. Thus the Airtours name was born.

            Throughout the 1970s he bought shops from elderly agents who were similarly childless, or whose children were not interested in carrying on the business.  By the end of the decade he had a dozen or so, all around Manchester Airport, and was beginning to break into tour operating. His first motive was to provide holidays for customers who could not get what they wanted from existing tour firms. By 1986 his company was carrying some 250,000 passengers a year. He realized that this was about as far as he could go as a one man band, and decided to bring in professional expertise to run his finances, and his marketing, for example. Within three years the firm's client list had leaped to 750,000.

            Everything now seemed to be happening in a blur. The company was floated on the London Stock Exchange in 1987 with a market capitalization of £28 million. Airtours persuaded hoteliers in Barbados and Jamaica to accept British holidaymakers in summer, instead of relying heavily on the American market in winter, and then closing. It began offering long haul holidays to the US West Coast and Hawaii. It played a huge part in developing package tourism to the Dominican Republic. Some observers muttered that it was growing too fast. They saw as a symptom the continual problems of a Boeing 747, chartered for its long haul business, which the press dubbed the ‘Flying Pig’ because of an appalling sequence of mechanical failures.

            It was partly the problem of the Flying Pig which persuaded Airtours to launch its own airline in 1990. Not only did the company want another source of profit - it wanted tighter quality control.

            In 1992, Airtours launched a hostile bid for the Owners Abroad group, which was twice its size and already quoted on the Stock Exchange. A long verbal battle ensued as Owners tried to retain its independence. In the end its shareholders opted to stay as they were.

            Crossland was not happy but he had an alternative strategy. It bought leisure travel agencies from Pickfords and Hogg Robinson and a tour operation called Aspro, which was strong in Cardiff and Belfast. With it came an airline, Inter European, which was absorbed into Airtours.

            The Owners Abroad group rebranded itself as First Choice in 1994. Airtours was to make a second attempt to acquire it in 1999, a bid which was thwarted this time by objections from the European Commission.

            During the 1990s, Airtours purchased Scandinavian Leisure Group (SLG) including award winning tour operators such as Ving and the airline Premiair.

            In 2002, Airtours Group plc, rebranded under the new company-wide banner of MyTravel Group plc. This included a name change for Airtours International and Premiair to MyTravel Airways. Shops throughout Northern Europe were rebranded to MyTravel however, UK retail outlets remained under the banner of Going Places due to the immense brand awareness and popularity. In November 2003, MyTravel sold off its North America Cruise Division to NLG (National Leisure Group) of Woburn, MA.

            In 2004 and 2005, MyTravel took 5.7 million people on holiday of which 3.4 million were from the UK, 1.5 million from Northern Europe and 0.8 million from North America.

            On 12 February 2007, MyTravel Group plc announced that they had agreed terms on a merger with Thomas Cook AG. The merger was given shareholder approval at an Extraordinary General Meeting on 29 May 2007.

First Choice

The airline started operations on 11 April 1987, launched by the Owners Abroad Group under the name Air 2000 with two Boeing 757 aircraft and a flight from Manchester to Málaga. The fleet doubled a year later, with one aircraft being based at Glasgow International Airport. 

            Long haul services to Mombasa in Kenya were introduced during the 1988/89 season. The 757s were re-equipped for extended range and flights to the United States began in 1989. The airline was granted a licence for scheduled operations by the CAA in 1992, which commenced in 1993, initially between London-Gatwick and Paphos, Cyprus.

            Expansion saw new bases in the UK established, with Dublin becoming the airline's first overseas hub in 1996. Leisure International Airways was fully integrated after the acquisition by First Choice of Unijet in June 1998. This included the entire fleet of aircraft, and an order for four Airbus A330-200 aircraft, which First Choice immediately cancelled in favour of the rival Boeing 767-300 aircraft. Air 2000 received a new colour scheme, however in March 2004 the Air 2000 branding was removed and First Choice Airways branding added.

            The airline carried 6.5 million passengers during 2002. The 2005 total was 6.0 million - fifth highest passenger figures of any UK airline. In 2004 it announced plans to refurbish another six Boeing 767-300 aircraft to expand its long haul operations. The airline was the first in the UK to use the Boeing 777-style interior on their 767 fleet. The company had six aircraft flying long haul in 2007, in a two class layouts. All seats featured Panasonic seat back entertainment and mood lighting in Star Class Premier.

           

On 23 April 2007, First Choice confirmed it is to close its bases at London Luton Airport and Cardiff from 1 November 2007. However, due to the merger with Thomsonfly who also operated from these bases, the combined airline would operate from these bases.

            In March 2008, the tourism division of the airline's parent group TUI AG, merged with First Choice Holidays PLC, forming the new company TUI Travel. Both Thomsonfly and First Choice Airways were merged as Thomson Airways.

            Thomsonfly Limited changed its name to Thomson Airways Limited in November 2008 and the Thomsonfly operating certificate was changed to Thomson Airways with effect from 1 November 2008. On that date, Thomsonfly and First Choice Airways both rebranded their operations to Thomson Airways, merging with a fleet of 75 aircraft, with a number of new Boeing 787 aircraft on order for the fleet. Then, in May 2015, the TUI Group  confirmed it was to phase out the Thomson and First Choice holiday brands as it sought to bring its operational names under one roof. The company said that its travel offering would come under the TUI name but it would take up to three years for the Thomson and First Choice names to disappear.

            The pair catered for 5.2 million holidaymakers last year, with the Canary Islands, Balearic Islands and Greece among the most popular destinations.

            The ditching of brands was part of the group's efforts to simplify its operation and came hot on the heels of its announcement to combine its tour operating, hotel and cruise ship businesses into one unit.

            Joint TUI chief executives Fritz Joussen and Peter Long insisted in a statement that they were pleased with the company's progress on restructuring. They said: "Our post-merger integration process is ahead of our original plan. Our growth phase is gaining momentum." 

All photos Graham M Simons.

Article from 'Sun-Seekers'

by Graham M Simons. 

The Changing ‘Habits’ Of A Nation

The holidaymaking public in the United Kingdom have constantly sought out new destinations, that were usually further and further afield -and usually at the lowest possible price.

            What started off with 36-seat piston engined airliners that took a day just to reach Corsica in the 1960s had evolved into 119 seater jets in the 1960s. These machines could ranger further afield much more quickly, and while the western Mediterranean was the early destination with the piston-engined aircraft, with the jets the eastern Mediterranean came within range.

            The boom in leisure air travel brought forth demands to get more passengers out and to keep the price low - Efficiencies of scale meant larger aircraft - so the short-range BAC 1-11s and early model Boeing 737-200s were replaced with Boeing 707s for long haul and Boeing 757s, 767s and TriStars.

            The number of passengers carried per trip may have gone up dramatically - after all, a Britannia Airways 737-200 carried around 136 passengers whereas an Air 2000 757 carried 236 - but the aerodynamics of the aircraft put weight restrictions on many of the smaller airports they could use.

            This was not a problem for the UK operators, as the market was changing - there was less interest in the Mediterranean - The Red Sea area and further afield beckoned. Aircraft like the 757 and 767 were perfectly capable of flying that distance. And with the use of ETOPS - Extended-range Twin-engine Operational Performance Standards -  trans-Atlantic and trans-Pacific flights with twin engined aircraft were allowed.

      Improvements in aerodynamics and flight control computerisation - especially with the A320 family - saw a greater number of passengers carried into the smaller airports.

     It was here that UK operators began to diverge from some of their northern European neighbours. In the UK it tended to be ‘get em out - get em back’ - in other words, direct flight out, direct flight back.

      Some of the Dutch, Belgian and Scandinavian charter airlines had other ideas - they were prepared to fly multi-sector flights. For example, Transavia of Holland and Thomas Cook Belgium flew from Amsterdam and Brussels respectively into Omiros National Airport on the Greek island of Chios.  From here they flew to either Samos, Lesvos or Thessaloniki before departing back to their home airport.

     With all these changes - and the introduction of e-commerce on the internet - the holiday companies foisted a whole raft of subtle ‘revisions’ on to the travelling public. Printed, hard-copy holiday brochures have almost become a thing of the past, they are all now websites - as are the High Street Travel Agents.

     By all accounts, the traditional ‘Inclusive Tour’ holiday has all but become a thing of the past - it has evolved into the ‘All Inclusive’ deal.

     But isn’t ‘All Inclusive’ the same as ‘Inclusive Tour’? No, not at all.  An ‘Inclusive Tour’  got you out to your destination, and made things easier for the traveler by providing ‘reps’ who knew the local area, and provided transport to and from the accommodation from your destination airport. Once there, you were ‘free’ - if you could resist the sales pitches from the Reps - to do as little or as much additional ‘arranged’ activities as you wished. ‘All Inclusive’ on the other hand is totally different.

            As a typical e-brochure describes: ‘With an All Inclusive holiday, all of your food and drink is included in the price, so you won't have to fork out to enjoy dinner. You'll also find that most hotel activities and entertainment are included too. So from the day you arrive to your flight home, you can indulge in as much or as little as you like. Some of the activities available include windsurfing, kayaking, cycling, and tennis. For those quieter days you can enjoy the likes of movies, dance shows and cookery demonstrations. And the best bit? It's all included in the price.

            Our All Inclusive holidays are ideal for anyone looking for a break from their wallets, especially if you're travelling as a group or family. And with top destinations across the globe to choose from, you'll soon see why...

            For full details of what's included in your All inclusive holiday, check the hotel description.

Why choose an All inclusive holiday package?

            ▪            Unlimited local alcoholic drinks

            ▪            All meals

            ▪            Snacks, soft drinks, tea and coffee

            ▪            Activities and entertainment’

As the UK travel tour industry says, they are just responding to the demands of the tourist market - everything the holidaymaker could need is arranged for and provided within the price.  But think about it - they say you can do as little or as much as you please - and that clearly includes drinking and eating, so the ‘price’ must be set at at least some form of average that provides them with a profit. Drink, eat and use the facilities lower than this esoteric ‘average’ and you are paying over the odds and putting even more into their coffers.

      On the face of it, ‘All Inclusives’ are just an extension of the vertical integration concept Tom Gullick of Clarksons pioneered back in the early 1970s taken to the extreme. Clarksons and Court Line owned the airline that took holidaymakers out to the Spain and Caribbean where they stayed in group owned hotels, eating food provided by group owned farms in group owned restaurants and carried around on group owned coaches!

     Clearly, there is market demand for all inclusives: we all want holidays and in the current difficult economic times, all-inclusives offer  the opportunity to feel assured that we can afford such a holiday. When evaluated from the customers’ perspective, the guarantee of a fixed travel budget is understandable. By choosing all-inclusive travel packages, tourists know they are in safe hands and there will be a quality product for a manageable price. Operators can enhance their control over the quality of the end product, and hotels can increase their efficiency and predictability of demand.

     Indeed, tour operator First Choice, part of TUI, switched all its holidays to all-inclusive. Thomas Cook reportedly increased the number of all inclusives holidays it offered by 10%. But what does the emergence of the all-inclusive model, where tourists are invited to ‘...leave their wallets at home’, mean for the destinations we visit?

     The words of the marketing men  ‘leaving your wallet at home’ does not sit well with many local economies. The phrase was coined by Johan Lundgren, the UK and Ireland managing director of TUI, but has now been disowned. "It was a PR phrase that we used. We don't advertise on that basis. If that's a phrase that we've used before then perhaps that doesn't help with the local area and we need to be mindful of that," said Christian Cull, director of communications for TUI UK and Ireland.

     Today, in 2015, First Choice trade under the banner of the ‘Home of All Inclusive’. But they are by no means the only tour company operating in this manner.

     The effect of the all-inclusives has been felt in many holiday destinations. In Majorca, Spain – all-inclusive holidays were blamed for loss of local businesses. Things got so bad, that in September 2011 local businesses organised a day of protest against the all-inclusive hotels

      On a number of Greek islands open to direct flights from the UK, many local communities claim that the all-inclusives have not only wrecked the local holiday economy, they decimated them! Many Prefectures and hotel associations reported an ever-increasing groundswell of local anger at how not only were the all-inclusives actively discouraging tourists from leaving their gated resorts by keeping the gates closed at all times, they were also shipping in ancillary staff – that is waiters and waitresses, cleaners, maids and the like – for the season from eastern Europe, employing them at rates lower than local wages, thus depriving the local economies of income. There was also indications that bulk buying of food and drink was being made on the mainland and then being trucked over by the container-load instead of being purchased locally.

     In Turkey, there were many reports conveying anger, frustration and distress from mayors and hotel associations describing how they had to succumb to pressure from UK operators to transform their hotels into all-inclusives. Analysis of an all-inclusive Holiday Village in Fethiye, Turkey, found that just 10% of the tourist spend reached the regional economy, with economic benefits to the neighbouring Sarigerme village put at even less. For example, estimated average guest spend in the village shops was put at just one Euro per guest per day according to the BBCs ‘Fast Track’ programme of 2 September 2011.

      Further afield, in Mombasa, Kenya, the World Bank stated all-inclusive beach holidays contributed the least economic benefit. In Jamaica – all-inclusive hotels attracted tourists in the short term but blocked development of other types of tourism. In the Dominican Republic there were numerous reports that all-inclusive holidays were blamed for restaurant closures and increased negative attitude towards tourists. In Goa, India there were reports of ‘enclave tourism’, where local taxis and guides were losing business to all-inclusive resorts.

     There is a whole raft of hidden dangers where local economies can suffer: for example, tipping is an important source of revenue for people working in the hospitality business but the ‘leaving your wallet at home’ all-inclusive business model results in fewer tips and therefore reduced income for many workers.

     Other local businesses, such as restaurants, shops, taxi drivers and small guest houses, all lose out to the all-inclusive model, as guests are deterred from leaving the hotel or complex grounds. In some destinations, countless businesses have been forced to close, which in turn deters other tourists holidaying on bed and breakfast packages, as the destination has less to offer. Local entrepreneurs from Spain, Greece and Cyprus, from The Gambia to Kenya, and from St. Lucia to Jamaica have all complained of being unable to run their businesses any longer because the footfall of tourists coming out of the all-inclusives is so low.

     All-inclusives can alienate tourists from the destination they are visiting and the people who live there. This can hamper positive cultural exchange, while allowing resentment to build amongst local people who are blocked from being able to benefit from the tourism economy. This can lead to a vicious circle, in which tourism harassment levels increase - itself an issue that is frequently capitalised upon by the hotels themselves - which in turn further deters people from leaving the hotels.

     Then, following the General Election in Greece in January 2015, the new  left-wing  Prime Minister Alexis Tsipras appeared to declare war  on the country’s all-inclusive resorts.

     All-you-can-eat buffets and unlimited drinks by the pool are under threat as Alexis Tsipras, leader of the triumphant anti-austerity party Syriza, believes such deals ‘alienate tourists from the local economy’ by keeping them in resorts and away from small businesses. He has promised to curb the type of mass tourism that Greece has developed in the last few decades despite that sector of tourism brings in £1.5billion a year for the Greek economy.

     Deals to sell public land to mega-resort developers could be banned and VAT rules are likely to be changed to hit existing holiday developments with higher taxes. Mr Tsipras said: ‘We do not want to continue the current saturated model of intensive exploitation of tourism.’

     The new regime says it does not support an outright ban, but wants to encourage a move away from the all-inclusive resorts back to the traditional holiday model where visitors use local bars, restaurants and attractions.

     Michalis Kritsotakis, the Syriza MP responsible for the party’s tourism policy, told The New York Times: ‘For the all-inclusive, our view, as well as that of the tourism industry, is that it’s not the best thing.’

The Association of British Travel Agents said this would drive holidaymakers to other Mediterranean countries. A spokesman said: ‘The Greek government will have to consider the impact of any restrictions. All-inclusive holidays continue to grow in popularity, particularly amongst the family market. The Greeks should consider that they might risk losing this slice of the holiday market to other countries such as Turkey and Egypt. Even though all-inclusives can be seen as a controversial option, there are pros and cons and many all-inclusives are a vital source of employment for local people, both directly and indirectly.’

Any changes made by the new Government will not affect the cost of package holidays that are currently being advertised by British tour operators as the contracts and prices have already been agreed. 

While this is true, one has to wonder while many travelers loathe the concept of All-Inclusives and all they stand for, one has to ask if legal steps are the right idea, for usually what the market wants, the market usually gets – even if it means going elsewhere.

From the authors unpublished

Sun Seekers!

The story of the United Kingdom’s Holiday Airline Business