Consumers will be rightly concerned that package holidays out of Ireland are now controlled by what amounts to a duopoly. The purchase of Budget Travel by Thomson Holidays creates a concentration of market power which, at least on the face of it, is unhealthy. Travel agents will be pleased if the arrangement brings stability to the market because their commissions are fixed. A 10 per cent commission on a holiday costing £250 is more attractive than the same commission on the £99 holiday which Thomson offered when it entered the Irish market earlier this year. The odd situation arises, therefore, that what is good for the travel agents is not good for their customers.
The Minister for Enterprise and Employment, Mr Bruton, nodded through the Thomson purchase with an ease which contrasts strongly with the difficulties he placed in the path of the Statoil bid for Jet and Unilever's bid for Lyons Irish Holdings. Even his party colleague, the Fine Gael TD for Cork North West, Mr Michael Creed, was moved to express concern about possible market dominance in the foreign holidays business. Mr Creed said the consumer's right to the benefits of free and open competition in the market place must be of paramount importance. That, he added, applied as much to buying a package holiday as to buying a tank of petrol.
Two months ago, the Dail voted to make the Competition Authority independent. It need no longer act only when called on by the Minister for Enterprise and Employment. The Thomson/Budget deal seems the perfect occasion for the Authority to exercise its new independence. The market share figures are disputed but the consensus in the travel trade is that Thomson Budget and Falcon/JWT Holidays will control 90 per cent of the market between them. The Department of Enterprise and Employment and Mr Bruton should explain why they believe such a situation will not lead to less competition in the market. In the meantime, the Authority should carry out its own investigation.
Ms Gillian Bowler, joint managing director of Budget Travel, has said it would be "dart" to change the policy which made Budget successful in the first place, namely, the provision of good quality holidays at reasonable prices. Perhaps so, but she is now answerable to the shareholders of Thomson Holidays. If the shareholders want to squeeze more profit out of their Irish investment through higher prices, that is what will happen.
Virtually the entire holiday charter business in Ireland is now in British ownership. That is not of any great importance in itself, but it does point to an opportunity for a suitably qualified and adequately financed Irish entrepreneur. There is an obvious marketing advantage is being able to proclaim that an Irish tour operator is Irish owned. This is not chauvinism but common sense. However, any new Irish tour operator would have to demonstrate the same professional and canny marketing which led Thomson to buy Budget Travel in the first place.