Plimsoll predicts further tour operator mergers – 16 April 2007

Mass consolidation among tour operators is inevitable, according to the latest research by Plimsoll Publishing.

Following hot on the heels of the TUI / First Choice and Thomas Cook / MyTravel mergers the report predicts around 200 companies could be involved in further consolidation.

The report states at least 71 tour operators are prime targets for a takeover, while another 127 businesses could be sold off by their parent companies.

Plimsoll Publishing senior analyst David Pattison said the 71 take over targets are “privately owned in financial difficulty with owners approaching retirement”.

“I’m fairly certain conversations are going on behind closed doors about their futures,” he said.

Pattison added there is a trend in the travel industry of defensive acquisitions – buying companies not because they offer good value for money and an extra foothold in a market but just so competitors can not buy them.

“Against a backdrop of over capacity, rising costs and failing margins consolidation in the UK tour operators market is inevitable in 2007,” Pattison concluded.

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