Travel Technology Show 2007

Further consolidation in the travel sector could see the first merger between a traditional operator and pure online travel company.

MyTravel and Thomas Cook announced a surprise merger last week when it was believed the two companies were among the front runners to purchase First Choice’s mainstream business.

The move has left First Choice isolated because it wanted to get out of the mass-market sector. Of the consolidated big three, it now finds itself with the weakest distribution outlets – both on the high street and the Internet.

First Choice terminated talks regarding the sale of its mainstream holiday division shortly after the Thomas Cook and MyTravel merger was announced.

On Holiday Group chief executive Steve Endacott advised First Choice to link up with online leader Expedia to give it the online distribution it needs.

“I can’t see the authorities allowing First Choice to join Thomas Cook/MyTravel now,” he said. “So in First Choice’s shoes I would try to team up with Expedia to give it distribution on the web.”

Meanwhile, Ebookers managing director Alan Josephs predicted further consolidation, with a link-up between an online agency and a traditional offline tour operator next.

“If the deal includes distribution and a brand name then it has the best change of being successful,” he said at last week’s Travel Technology Show.