ABSTRACT
In the autumn of 1985 a fierce battle emerged between United Kingdom holiday firms in an effort to enhance their share of the 1986 summer holiday market. This involved in particular two ‘market leaders’, Thomson Holidays and Intasun Holidays. Each began to cut prices, implicitly challenging the others to follow in a tit-for-tat sequence. Anything between 30 per cent and 60 per cent was being cut from the price of holidays. Some of Thomson’s holidays to Spain sold for only £25 a week or £35 for two weeks, and 500 Intasun Holidays were offered for £39 each. Partly as a protest at these ‘irresponsible’ price reductions NAT Travel, a smaller holiday firm, introduced a ten-day coach/camping holiday for £5 at one stage. People were seen queuing overnight outside travel agents to be able to cash in on a £20 holiday for four! The holiday sale season (some would argue ‘silly season’) was on. But behind these bravado tactics lay some intriguing and important features of the development of both United Kingdom holiday firms and of the United Kingdom economy itself. It is these features that are explored in this chapter. While the 1985/6 period forms the focus of my analysis this particular episode should not be seen as unique in the context of the United Kingdom holiday industry. In the early 1970s something of a similar competitive battle emerged in which a series of well known holiday firms at the time either collapsed or got into severe financial difficulties (Clarksons, Horizon Midland, Court Line amongst others). It was confidently predicted that some firms, particularly the smaller ones, would also go out of business as a consequence of the 1985 round of price cutting. (This was trumpeted under the holiday industry’s unofficial motto ‘if you can’t stand the heat, get off the beach’.) Indeed, in 1984 some eighteen smallish tour operators failed and in late 1984 an important firm, Budget Travel (the tenth largest at the time) also suddenly went out of business. Pundits of the travel scene were heard suggesting (and exaggerating) that as many as 200 to 300 travel firms could go bankrupt if things went badly. In the following sections the components, structure, and tendencies involved with the firms making up the holiday industry are analysed; and recent competitive battles are reviewed.
