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Big 4 to become Big 3?
ABTA Convention special report: The big four vertically integrated tour operating groups will shrink to three in the future – or the big four will only be the same size as three are now.
The prediction came from former TUI UK boss Chris Mottershead at the ABTA Travel Convention.
He warned: “Whilst the new entrants are growing apace, the big four are just scrapping over the same size pot.
“In the 1990s these were the boys dominating and moulding the market and growing aggressively. Now they have become inward-looking as they try to respond to the pace of change wrught by the internet.”
Mottershead, now chief executive of Travelzest, claimed the majors – TUI UK, Thomas Cook, First Choice and MyTravel – “can’t reinvent themselves fast enough to compete, so they can only get better at what they do”.
He added: “They are admittedly investing millions in the internet but what else are they doing? Cutting shops, cutting staff, cutting commission, cutting capacity, cutting down hotel guarantees and on top of that trying to change people’s perception of what they really are.”
The continued growth of US fims such as Expedia and Sabre with their deep pockets and expansion of no-frills carriers Ryanair and easyJet will put the major operators under even more pressure.
Mottershead went on: “I believe the big four will be the big three or ceetainly no bigger than three of the big four are today.
“Cendant and Sabre will still be struggling to make returns and will be heavily focused on re-organising and re-structuring themselves and Expedia will still be struggling to grab a share of the sun market unless they acquire a mainstream operator.”
Report by Phil Davies
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