I think it's also due to lower capacity. There's far fewer aircraft flying holiday passengers now through airlines going bust and mergers resulting in aircraft retirement, so that's bound to lead to price increases if the demand is there. The exchange rates are also having a big impact. I wouldn't say it's just the lack of competition, but I would agree it's a factor.

Darren

There is a limit on how far they could jack up prices even if they did collude. They don't have a monopoly because they can't stop DIY holidays with people booking direct. Everyone has a point at which they will say we're not paying the extra for the "one-stop" booking and turn to DIY. There are many times more beds available in the open market than the Tour Ops can control and the low cost airlines (and even some of the conventional ones) have always been flexible in matching the market. It may be true that these mergers will reduce the amount of choice in packages but the alternative will always be there.

Majority of people book via a tour op and the tours can by beds cheaper than we can, I have price up DIY this year . If the prices are staying hi I will back to doing DIY and its come out more expensive.

There is a monopoly in the package holiday market made the size of the 2 tour ops and the lack of compitition.

Are you saying that you've priced up a DIY and it's come out more expensive than the equivalent package? If you are, this suggests that there is still a lot of competition between the major TOs or else they are not exploiting any near monopoly they might or might not have. I'm with Darren on this one - I think the current higher prices are due to cutbacks in capacity. The TOs don't want to end up with too many holidays that they have to shift at the last minute at a knockdown price, or even worse, be left unsold on their hands. I suspect that their lower take-up of beds with hoteliers will eventually filter through in lower prices for us DIYers - an empty bed is a loss-making bed for them too.

But I also suspect that flights will hold their prices for the reasons that Darren suggests. Not only has the demise of carriers like Excel greatly reduced capacity but I think that a number of operators are likely to have learnt a lesson from that debacle and are operating with higher margins on their flights. I don't think this a necessarily bad thing - a colleague booked to fly to Tenerife in October with Excel and not only lost his flight but lost his holiday because they couldn't find alternative flights. I paid more for our tickets with Monarch but we still got our holiday even if we did have a desperate taxi dash to make our original ferry time. I'd like to say it was due to foresight on my part but I mainly made the decision on the basis of the suitability of the flight times for connecting with the ferry to La Gomera and Excel's poor punctuality record. In the event we suffered delays anyway but if we'd booked on price alone we'd have lost our whole holiday too. I'd prefer to pay a bit more (and it was only around £15 per head) and be more confident that the airline was balancing its books and remained commercially viable, than have aggressive pricecutting resulting in more collapses in the industry.

SM

I believe the present sky high holiday prices are down to the strangle hold thomson and TC have on the UK package holiday market.

They have a monopoly as the holiday business is now a battle for survival and only the fittest will survive. The reason they have a monopoly is simply because so many operators have gone out of business because of unfeasibly low profit margins caused by consumers wanting everything they can get for as little as possible. I also want my hols as cheap as poss, but not to the detriment of the business involved. Thomsons and Cooks are almost the only recognizable names compared to when I started in travel. I am going this year to the same place as last year and I have had to pay about 35% more for the same thing. However I am prepared to do this as I want my holiday and I want kids clubs etc which I dont get if I diy.
Look at it this way if there are 20 companies offering a holiday its a buyers market, there is competition and therefore you can get the lowest/ best offer because there is that competition. If there are only 2 companies, no competition,it becomes a sellers market, because believe it or not more people travel with a recognized operator than dont.

peakta

First Choice could of survived without thomson and airtours trouble started when they bought a tour ops who had big losses, but the worst was over. If the tour ops were private business's like they used to be before the dash to float would of never merged with thomson or thomas cook.

Its called a merger but it was a take over by thomsons and thomas cook, the share holders of airtours and first choice agreed because most of they would of mode a nice little profit and the main reason behind the mergers. The directors of both companies would of had share options they would of made a killing on and no doubt good a nice cosy job at thomsons or thomas cook.

Too many look at simplistic veiw behind the merger and it was nothing to do wioth survival. Other companies only went bust because of the credit crunch and i would imagine most would of had a good business plan, it was the high oil prices and the banks calling debts or not willing lend due to the credit crunch.

They are using their large market share to hike up prices. We will see what the prices are like for 2010, thomson doubled prices on some holidays this year.

On the flights I can find cheaper prices with BA on different flights compared to the charters. How many of the mytravel and first choice planes have been taken out of service to reduce capacity and keep prices high.

Airtours, believe me, were on their last legs, thats why Cooks took them over. The fact still remains that there are many fewer operators now than before because they have gone out of business, due to making little or in some cases no profit, and that is customer driven. I said this would happen 10 years ago when the whole 'pricematch' culture began to gain momemtum. You have now got to the situation that there is no-one to pricematch against so prices will remain high. Some people are happy to DIY and fair play to them, but it doesnt suit everyone and those that still choose to go with an operator are now stuck with very little choice. And OK, sometimes you might get a cheaper price with BA but they dont fly where I want to go.
The directors might have made some money from the mergers/takeovers, thats business. The problem is that the consumers are lead to believe by the media that they are the only ones allowed to be winners by getting this and that extra knocked off...it doesnt look like it now does it.