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A package holiday is one which is arranged by a travel agent or third party provider, which gives consumers a deal covering their travel, hotel and often activities and food/drink as well – all under one primary package fee. In essence, the package holiday industry exists to provide consumers with access to the best deals which not only save them money in the long run, but also allow them to benefit from the added convenience of not having to source and book each aspect of their holiday independently.
For consumers who approach holiday bookings without agent support, it can be easy to become overwhelmed by the multitude of areas that must match up in order for the holiday to come together seamlessly. From flight times to transfers, locations and budgets, and even the choice of a hotel or resort which presents activities and options suitable for the whole family, the likelihood of these areas all coming together easily is low – and so many consumers are instead opting for the ease and assurance of a package holiday which does all the hard work for you.
What does the package holiday industry include?
As the industry has continued to grow and adapt its offerings in line with consumer demands and more of an understanding around what consumers really want from their holidays, it has become obvious that package holidays are becoming less structured in their provision – giving consumers more of a choice with regards to the individual details included within their package.
A good example of this takes the provision of flights. Once upon a time, a package holiday would have given the consumer the flight that they could take to reach their destination, with no room for altering or moving the time in accordance with their own preferences. However, if you go to book a package holiday today, the likelihood is that you will be presented with a series of flight times to choose from – each with its own dedicated transfer and often with its own cost depending on the speed and route of the flight, and how many seats are left on board.
The package holiday industry has seen changes as recently as 2018, when the legal definition changed and the terms that were associated with a package holiday were shifted and added to in order to make it clearer to consumers. The biggest change which was seen by the industry in 2018 revolved around payment terms and the contractual obligations of the third party package holiday provider and the consumer. Prior to 2018, package holidays had to be sold at an all-inclusive price with little room for expanding outside of the contractual agreement. One contract was drawn up and this detailed everything to be included in the package, under a single straight fee.
The changes in 2018 saw this open up to give consumers more freedom and to present providers with more opportunity to upsell various services and tailor package holidays according to the needs and preferences of the consumer. A package holiday by definition of the ABTA travel organisation must cover a period of at least 24 hours, including overnight accommodation, and must include at least two additional types of service across options including:
- Transport by plane, train, or coach
- Car rental
- An additional tourist service such as a tour or tickets to a local destination attraction
It is worth noting that typically transfers are not included as part of a standard package and are often available at an extra cost to the consumer. Similarly, the all-inclusive aspect is no longer relevant, and is something which will depend on the provider and the kind of package that the consumer selects.
Other things that consumers could add to their package holiday include:
- Currency exchange prior to travel
- Travel insurance
- Airport parking
- Airport hotel stays
- Flight extras such as selecting your seat in advance and receiving a meal during the flight
- Excursions from your hotel or resort
- Car hire
Where did package holidays come from?
The very first example of a package holiday came from a renowned name which is still prominent in the industry today – Thomas Cook. Through his travel company, Thomas Cook organised a bespoke train tour in the UK for captive consumers, calling this the first deal which encompassed travel and accommodation as well as entertainment and food. This was followed in 1855 by Thomas Cook’s expansion abroad, where he accompanied two parties on trips around Germany and Belgium.
The next big step in the package holiday industry came in 1872 when Thomas Cook, once again responsible for the biggest moves in the industry, created a 222 day trip to Egypt which spanned 25,000 miles and took travellers through the USA, Japan, China and Singapore as part of the journey. All of this cost the equivalent of £210 in today’s money and represented a major move in the package holiday sector which saw travellers booking an entire experience rather than just a mode of transport or a place to stay.
From there, the package holiday industry and its subsequent growth largely came from the commercialisation of travel as an industry and the ways in which travel and holidays became gradually more commonplace for the average consumer.
In 1949, a company called Horizon Holidays was founded to organise and sell trips, including flights, to Corsica. This came just a year after Thomas Cook was brought in as part of the British Railways organisation which was state owned in the UK – both moves which began a revolution in terms of the organisation of complete trips where consumers could benefit from booking every aspect of their holiday through one central provider. Throughout the rest of the mid-1900’s, package holiday companies and providers were gradually founded and launched to market various trips and travel initiatives – ranging from full routes via popular destinations, to the provision of various travel extras during a holiday.
In 1990, the EU Package Travel Directive was introduced as a way of offering protection to consumers in the event of their package holiday provider failing or coming face to face with challenges – and it was this that created a boom in consumer confidence and saw more travellers than ever choosing to book package deals in order to benefit from a plethora of deals and discounts as well as the convenience of having everything sorted by one central operator.
In the last couple of decades, business strategy and offering has been one of the biggest drivers in the growth and success of the package holiday industry – with the launch of specific package holiday companies giving consumers more of a targeted approach to selecting a package which is right for them and which delivers the kind of holiday experience that they uniquely are looking for.
Top providers in the package holiday industry
While the earliest providers in the package holiday industry tended to create packages which were targeted at everyone and anyone who had the budget to pay for them, one of the leading ways in which the industry has evolved is in the creation and formation of companies which create very specific targeted holidays for much smaller target audience groups.
An example of this is the rise in Neilson Active Holidays, a company founded in 1978 which provides consumers with the opportunity to partake in various activities and sports which are all included in the complete package price. Consumers who purchase a Neilson Holidays trip become part of a group of guests who arrive each week on the dedicated arrival day – meaning that numbers in the resort remain the same for the week, and that guests are encouraged to get to know each other through entertainment provisions, kids’ clubs, social nights and various sporting tournaments and events. The target audience for an active holiday like this is the active family or individual who wants to enjoy a sociable experience while partaking in all their favourite summer sports – with hire of all equipment included as part of the package price. For the most part, these packages are set with little room for tailored additions, though guests can upgrade to nicer rooms for a higher fee.
Another example of a targeted package holiday provider is Disney World – though the approach here is a little different. For Disney holidays, travel agents create entire experiences for consumers which include all the provisions of a standard package holiday though often with a little more freedom in terms of how the time is spent. Rather than being told which flight to get and being kept in the same resort, consumers who approach a travel agent about a Disney or other theme park holiday are often given a choice of the different flights to get and dates to go – then adding their transfer, hotel, park entry tickets and transport between the parks in as part of the package deal. Meal vouchers and other experiences can be added for extra cost. One of the leading suppliers and providers of Disney package holidays is Virgin Holidays.
Other big providers in the package holidays industry include:
- Last Minute
- On the Beach
- Virgin Holidays
- Neilson Holidays
- Mark Warner Holidays
Trends in the package holiday industry
When it comes to finding and booking a great deal, one of the major focuses for providers is on reviews and the way that a good or bad review can make or break their marketing of a particular package discount or deal. With more and more travel comparison sites popping up, promising consumers access and information to all of the best package holiday providers and deals out there, the industry is seeing a renewed focus on sites like TripAdvisor – with these comparison sites drawing the ratings for various resorts and destinations through from TripAdvisor and using them to promote and showcase consumer feelings on different offers. For those with great TripAdvisor review this is a good thing, however for those who do not have such great reviews it can really impact their completely package holiday offers and, for third party providers, can impact the number of bookings they get for certain deals.
Another distinct trend which is playing its role in the evolution of the package holiday industry is the rise in seasonality and the idea that booking last minute can be either a good thing for deals or a bad thing – depending entirely on the destination and the provider. Sites like Last Minute herald the idea that booking a holiday at the last minute can garner huge savings, however there are also sites on the market which offer early bird deals – essentially providing consumers with mixed messaging about when the best time to book a holiday actually is. For the most part, consumers will book their holiday when they can afford to, with most times of the year benefitting from some form of deal. This is because travel companies consistently have deals and discount available – they simply use each and every one to create a sense of urgency which may not be necessary all the time but which certainly encourages many consumers to book at specific times in order to snap up the deal. Whether or not a better deal later pops up is up to the consumer to decide.
The package holiday industry is one which generates and presents consumers with a multitude of savings and deals across the board – not only giving them money off by wrapping their entire holiday up in a package deal, but also providing them with that convenience that makes booking a holiday lot less stressful and a lot more enjoyable. The most successful package holidays tend to be those which market to a dedicated captive consumer audience who are interested in their specific offering, however large companies in the industry are still enjoying huge success largely by advertising the savings that consumers can enjoy if they purchase a particular holiday deal from them at a particular time. For more on the best package holiday savings that are available for next year and beyond, check out our package holiday page.