Temperature rises in the holiday market

A BITTER dispute has broken lout between tour operators since last week's launch of an aggressive advertising campaign by Thomson Holidays, the major "tour operator newly arrived on the £140 million Irish package holiday market.

Market leaders Budget Travel and Falcon have reacted strongly to a £250,000 Thomson advertising campaign which induced claims that Thomson holidays were cheaper than holidays offered by Falcon and Budget Travel. The advertisements quoted prices by Budget and Falcon which compared unfavourably with prices quoted for Thomson Holidays.

Falcon bags taken out news paper advertisements disputing Thomson Holiday claims. Budget Travel this week issued a brochure that travel agents believe is a response to Thomson Holidays.

Thomson Holidays, a Canadian company, is the market leader in Britain. Budget Travel is owned by the British group, Granada, and Falcon/JWT is owned by the British group First Choice.

Thomson Holidays has been preparing to enter the Irish market over recent years, according to its Irish general manager, Mr Kevin Dufficy. He says the massive volumes of holiday traffic handled each year by Thomson give it a buying power that Budget and Falcon cannot match.

"We were surprised by how much cheaper we were compared to other operators, as can be seen by their relaunches. There seems to be a fairly hysterical reaction from the other side", he said.

The joint managing director of Budget, Ms Gillian Bowler, has objected strongly to the Thomson advertisements, which she says misrepresent the prices offered by her company. Solicitors for Budget have written to Thomson Holidays, and she has also written to the Director of Consumer Affairs.

"I have no problem with their coming on to the market and making a lot of noise, because they need to do that if they are to survive, but I am extremely annoyed that the prices they quoted Budget packages were not correct", said Ms Bowler.

Tour operators expect to sell 400,000 sun holidays this year, with the average holiday costing around £350. Before the arrival of Thomson Holidays on the market, Budget Travel accounted for just under half of all packages sold, while Falcon (which recently bought Joe Walsh Travel) sold around 35 per cent.

Thomson Holidays is hoping to win about 10 per cent of this market in its first year operating here. The company sees great scope for an increase in the market. In Britain the number of sun holidays sold each year is equal to 20 per cent of the population, whereas in Ireland the figure is" equal to about 10 per cent of the population.

The market here is currently growing by about 10 per cent annually.

Mr John MacNeill, chief executive of Falcon/JWT, says the Thomson Holidays campaign is very aggressive, and is based on lead prices only and is therefore misleading and confusing".

Travel agents who spoke to The Irish Times said there was a lot of interest in Thomson Holidays, but that people were being very cautious and reading the brochures carefully. One agent said potential customers feared they might end up in a development where the bulk of the people were British.