Package tourism is an important component of tourism. The package holiday has been a mainstay of the tourism industry for decades, and although people book packages differently today, package tourism is here to stay- in fact, demand for package holidays grew strongly after the COVID-19 pandemic, partly because of the financial protection they offer.
So what is package tourism and what does it mean for the face of the tourism industry? This article explains this important part of the tourism industry.
What is package tourism?
Package tourism is when elements of a holiday are grouped together and sold as a package by a tour operator at an inclusive price. Typically, a package holiday will include the three core elements of; transport (e.g. flights), transfer (e.g. coach or car) and accommodation (e.g. hotel).
Package tourism is traditionally associated with the production of mass, standardised holidays, for example beach holidays to Europe. However, in recent times tour operators have been promoting a wider range of package holidays that facilitate niche tourism and allow for tourists to design their own personalised tour packages.
Video: How does the package holiday market work?
The history of package tourism
The growth and development of package tourism is largely down to one (famous) name in travel and tourism– Thomas Cook. Thomas Cook wasn’t just a company- there was a face behind the name!
In 1841 Thomas Cook organised the first package holiday as we know it today. It may have only been a short trip between Leicester and Loughborough, but it was revolutionary in terms of the growth and development of tourism industry. In the following years, Cook took many tourists on similar trips, which were becoming more varied and exotic. Increases in disposable income, having paid time off work, an increasing desire to explore new destinations and significant developments in transport and technology meant that Cook’s business grew and grew. You can read a detailed account of the history of Thomas Cook here.
In the years that followed, other tour operators and travel companies opened up, hoping to offer services similar to Thomas Cook, and while many succeeded, few could rival the scale of Thomas Cook for many decades. In 1990 the EU Package Travel Directive was introduced, offering protection to travellers if a tour operator or airline failed (it was updated in 2015, and in the UK the rules are now set out in the Package Travel Regulations 2018) and by the mid 1990’s more than half of all holidays taken by UK citizens were package holidays.
Package tourism was an easy way to book a holiday. It wasn’t until the growth of the Internet that package tourism started to decline in popularity. The advent of Web 2.0 meant that tourists could now do their own research about their holidays and they no longer had to rely on the advice of a travel agent and for a tour operator to package together their trip for them. The growth of travel blogs, comparison websites and online travel agents all contributed to the gradual decline in the number of tourists booking package holidays.
Whilst package holidays do continue to be sold around the world, many of them are now known as dynamic packages, whereby the tourist selects the elements of the package and puts it together themselves, with the assistance of an operator, usually an online travel agent.
Major package tourism tour operators
There are many different travel and tourism companies around the world that provide package tourism services and package holidays.
For many years, Thomas Cook and TUI were the two major players in the UK package holiday market, together dominating the industry. Thomas Cook ceased trading in September 2019, and today the UK market is led by TUI and Jet2holidays, alongside online operators such as easyJet holidays, loveholidays and On the Beach.
However, there are also other companies that offer package tourism products. These include:
- Independent tour operators
- Online tour operators
- Niche tourism tour operators
Types of package tourism
Traditionally, package tourism is based on a holiday to a beach destination that includes a flight, transfer and hotel room. You can have all-inclusive package holidays, half-board package holidays and self-catering package holidays.
Travel agents will also often sell extra services in addition to the core package, known as ancillary products and services. This could include insurance, tickets to tourist attractions, car hire etc.
Nowadays, there are many more options for package holidays than a sun, sea and sand holiday. A tour of the Galápagos Islands, for example, might be sold as a package that includes several hotel stays, internal flights and a cruise. With the growth of niche tourism, many tour operators- and travel agents- now offer bespoke, tailor-made packages to suit the needs of their customers.
Another popular way to book a package holiday is on the Internet. Many tourists choose to use an online tour operator to book their package holiday. There are plenty of companies that offer this, such as Expedia, loveholidays, On the Beach and easyJet holidays.
Benefits of package tourism
Package tourism has been a popular type of tourism for many years, and for good reason!
Package tourism is easy and convenient for the tourist. There is no need to do any research, no need to research flight times or bus timetables and and little to do before departure except pack. Prior to the 2000s, this was perfect for many people. However, with the growth of the Internet, many people felt that they no longer needed this help and that they could now research and book these elements of their holiday themselves.
Package tourism is often cheaper than other forms of tourism. This is based on the basic rule of supply and demand- tour operators, using the traditional Fordist model of mass production, create standardised package holidays in bulk. Because they are putting together a large number of holidays, they are able to offer them at a cheaper price to consumers.
Booking a package holiday also comes with added financial protection. In the UK, packages that include a flight are protected by the ATOL scheme, run by the Civil Aviation Authority, and many travel companies are members of ABTA, which provides financial protection and a code of conduct. Under the Package Travel Regulations, the organiser of a package is also legally responsible for all of its parts. This protection proved very important when Thomas Cook collapsed in 2019 and during the COVID-19 pandemic.
Disadvantages of package tourism
There are also disadvantages of package tourism. One of the major disadvantages is that package holidays often have few economic benefits of tourism to the local destination, especially if the package encompasses an all-inclusive hotel. This is because much of the money paid by the tourist will be retained by the tour operator and other foreign organisations- this is an example of economic leakage in tourism. This is a negative impact that hinders the ability for sustainable tourism to take place.
Another major disadvantage of package tourism is the association that package tourism has with mass tourism. Because package holidays are typically mass produced, the result is large amounts of tourists all visiting the same place often at the same time. This causes many problems, from environmental degradation to negative social impacts of tourism and more.
From the tourists’ perspective, package tourism isn’t always the best type of tourism either. This is because it is not personal and it is not (usually) tailored to the needs of the specific tourist. In recent years we have seen consumer desires change- people want to see new things and explore new places outside of what the traditional package holiday model typically offers. People are more interested in niche tourism than ever before. Whilst there are some packages that cater for this, these can be more expensive.
The death of the package holiday
Many people have suggested in recent years that the package holiday is dying- and the collapse of Thomas Cook in 2019 seemed to support this view. However, while the traditional, brochure-based package holiday has declined, there is still a strong market for package holidays- they just look different nowadays.
Many people are opting to book dynamic packages. This is when the tourist can select their own elements of a package (i.e. which flight they prefer, which hotel they like the look of) and combine them together to create a package. People tend to prefer this because they can tailor their holidays to better suit their needs and requirements, yet still have the ease and protection that comes with booking a package holiday. Many people do not realise that they are booking a package holiday when they book a flight and hotel together through websites such as Expedia or easyJet holidays, but in many cases they are.
Alongside this, niche holidays are also growing in demand. A person may be interested in painting or diving, for example, but they don’t know where the best place to go for their specific interest is or how to organise their trip. This is where a niche tourism tour operator comes in, who can develop a package for them. Many travellers also use a travel agent- including the growing number of independent, home-based travel agents– to put together a protected package for them.
Package tourism: FAQs
Below are answers to some of the most common questions about package tourism.
What is package tourism?
Package tourism is when elements of a holiday, such as flights, transfers and accommodation, are combined and sold as a package at an inclusive price by a tour operator or travel agent.
Who invented the package holiday?
Thomas Cook is credited with organising the first package tour in 1841, when he arranged a rail excursion from Leicester to Loughborough for around 500 people, including travel and food, for a shilling each.
What are the benefits of a package holiday?
Package holidays are convenient, often cheaper than booking each element separately, and come with financial protection- in the UK through ATOL and the Package Travel Regulations- if the company fails or something goes wrong.
What is a dynamic package?
A dynamic package is a holiday in which the customer chooses their own flights, accommodation and other elements, usually online, which are then combined and sold together as a package with the same legal protection as a traditional package.
Is the package holiday dying?
No. While traditional brochure-based package holidays have declined, demand for package holidays grew strongly after the COVID-19 pandemic, and companies such as TUI and Jet2holidays carry millions of package customers each year.
Further reading
If you found this article on package tourism useful, you may also find these articles helpful-
- Types of travel agents
- What is a tour operator and how does it work?
- Association of Independent Tour Operators: Purpose and responsibilities
- Mass tourism explained
- The history of Thomas Cook
- How to become an independent travel agent
- Are airlines the new tour operator? Dynamic packaging in aviation
