Travel Reference
In-Depth Information
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Check out this website for more
information on Thomas Cook.
www.thomascook.com
VERTCAL INTEGRATION AT THOMAS COOK
Thomas Cook UK & Ireland is the second largest
leisure travel group in the UK with around 19,000
employees. It is now part of Thomas Cook plc which
was formed in 2007 by the merger of Thomas Cook
AG and MyTravel Group plc. Thomas Cook is a
vertically-integrated organisation since it operates
at different levels of the distribution chain in travel
and tourism, as follows:
Vertical integration of this sort, when a tour operator
controls the sales policy of its own travel agencies,
is thought by some people to be against the public
interest, since it could lead to a company selling its
own products above all others in a travel agency, a
process known as 'directional selling'. Also, customers
may not always realise that there is a commercial link
between a travel agent and a tour operator. In certain
circumstances, the Competition Commission can be
asked to investigate if the public are indeed being
disadvantaged. This sometimes happens when a major
airline or holiday company tries to take over one of
its competitors. Since 2000, all vertically integrated
travel companies have been obliged to make their
links to other travel companies clear by, for example,
having notices in their travel agencies and printed in
brochures.
•
It has a network of retail travel agencies (Thomas
Cook and Going Places)
•
It owns a variety of tour operating businesses,
e.g. Club 18-30, Neilson, Thomas Cook Signature,
Tradewinds, Thomas Cook Sport, Cresta, Bridge,
etc.
•
It operates its own airline - Thomas Cook Airlines
- with a fl eet of 45 aircraft.
Horizontal integration occurs when a company owns
or controls other businesses at the same level of the
distribution chain, e.g. a multiple travel agency chain
taking over an independent travel agent in a town
or the merger between the tour operators Thomson
Holidays and First Choice in 2007.
The company also has its own television channel
Thomas Cook TV and offers a range of fi nancial
services, including foreign exchange and travel
insurance.
Thomson is a vertically integrated company
