Price war led to holiday firm's collapse

INTENSIVE competition and price cutting in the sun holidays market led to the collapse of the Classic Choice tour operating company, one of its directors said.

The director, who did not want to be named, said yesterday that "fundamental changes" in the business this year had led to the collapse of Classic Choice.

The market was now dominated by the three large foreign owned tour operators to such an extent that smaller Irish owned specialist operators were not able to survive.

Classic Choice, which ceased trading on Thursday, was established in November by Mr Freddie O'Neill, formerly of Falcon, and Ms Gabrielle Malone. Their intention was to provide quality sun holidays in the Mediterranean to Irish holidaymakers, families in particular.

The fact that they were Irish owned and Irish staffed was to be to the company's advantage.

However, conditions in the market changed dramatically this year, the director said.

Customers were not booking early and the huge glut of holidays available meant prices during the peak period, July and August, were being reduced below what was profitable.

"We did reasonably well up to June, but we could not sell July and August holidays at prices that would enable us to be profitable. So we decided we wouldn't trade," he said.

While the current fighting for market share by Thomson, Falcon and Budget Holidays was good for the consumer, this was only so in the short term, the director said.

Thomson Holidays is Canadian, while both Budget and Falcon are British.

Classic Choice has some "600 odd" people on holiday at the moment, in Majorca, Menorca and the Algarve. About 300 customers will be brought home this Saturday and Monday, and the rest a week later.

A further 1,000 people have deposits with the company or have paid for holidays with it, the director said. These people are entitled to refunds.

Members of the public should contact their travel agent or the Department of Transport at (01) 604 1614.