10. Read and sum up the article “Package holidays close to extinction as more travel companies merge” in 8-10 sentences.

What problems are raised here? What reasons are given?

What is the future of package holidays?

Package holidas close to extinction as more travel companies merge

By SEAN POULTER

The Daily Mail

19th March 2007

The traditional 'sun, sea and sand' package holiday faces extinction with a disastrous fall in sales that has forced Britain's tour operators to merge or die.

First Choice is being taken over by Thomson, which is owned by TUI of Germany, it was revealed today.

Separately, the German-owned Thomas Cook is about to merge with MyTravel, which is based in North West England.

The mergers will see the loss of hundreds of jobs and travel agent shops from high street as more people book their holidays via the internet or Teletext.

The consolidation of Britain's package holiday giants from four to just two comes amid a 14 per cent slump in sales in just four years.

During the package holiday hey-day of the late 1990s more than 20m package were being sold every year but this year it is likely to be less than 16m.

The industry is haemorrhaging bookings as families and others switch to putting together their own holidays with budget airlines and their own hotel bookings.

As a result just 31 per cent of people now take a package holiday, which is the lowest ratio in 30 years.

Industry analysts report that the only way package holiday firms can survive on what are very thin profit margins is to merge.

Separately, they are also changing what they offer, moving away from the traditional sun, sea and sangria of the Spanish costas and Greek islands to long-haul trips to the Far East and the USA.

MyTravel, for example, has begun offering packages to China and even a round-the-world holiday in 23 days, starting at £4,499.

Travel industry analyst, Jeremy Skidmore, said: "We are seeing a sea-change in consumer behaviour. The bottom line is that people are turning their backs on package holidays and doing their own thing.

"The package holiday, once a desirable goal, is now something that millions of people are turning their backs on.

"It is very sad for traditionalists, but tastes have changes. I guess it is what people call progress."

He said travellers are now far more independent and no longer value the hand-holding offered by a package holiday, including reps and organised excursions.

"Going to Spain or the Canary Islands doesn't hold any mystery any more. People are happy to book their own flights and find their own way round," he said.

Mr Skidmore said: "It has become increasingly difficult to make a good profit out of selling a package holiday. The firms have had to cut prices to sell them, but prices have become ridiculously low. "It is no exaggeration that at some points of the year they are selling holidays at a loss, particularly when you get down to deals of £99 a head.

"There just isn't room any more for four package holiday firms when an increasing number of bookings are made through the internet. It is a case of merge or slowly die."

Mr Skidmore warned that prices are likely to go up, although this will be capped by the competition from budget airlines.

The British Market Research Bureau has charted a decline of the package holiday.

It says sales have fallen by 14 per cent in four years. The proportion of people making their own plans is up ten per cent to 45 per cent over the same period.

It has registered a 300,000 drop in British visitors to the Canary Islands in four years.

By contrast, Malaysia, Singapore, Thailand, Australia and New Zealand have all seen big increases in visitor numbers as people venture further.

A BMRB spokesman said: "Online holiday booking has seen a dramatic increase and the ease of booking one's holiday online makes it a cheaper and quicker alternative than visiting a travel agent.

"With Britain embracing low cost airlines, it is now possible for people to visit alternative holiday destinations such as eastern Europe.

"Whereas people previously were holidaying in Spain and Portugal, now people have more choice and may opt to travel to Poland, Estonia or Latvia instead."

Thomson has been the UK's leading tour operator since 1974 and has about one third of the UK market. Its budget airline, Thomsonfly, operates to more than 80 destinations.

The company has more than 650 travel agent shops and sells around five million holidays and flights a year. Its brands include Simply Travel, Headwater Holidays, Crystal Holidays, Thomson Ski and Snowboarding, and Jetsave. Thomson's parent company TUI will own 51 per cent of the new business, while First Choice will make up the remaining 49 per cent. The new holiday company will be based in the UK. First Choice has been operating in various forms since 1973 and started under the name of Owners Abroad.

The companies claim the merger will generate savings of £100 million a year, with much of this likely to come with the closure of holiday sales call centres and the merger of administration.

Announcing the deal, Tui and First Choice, admitted that travel tastes had changed.

In a joint statement, they said: "The leisure travel environment has changed significantly over the last few years as consumers demand flexibility and choice, seek new life experiences and look to access travel content through a number of points of sale, most notably the Internet."

Here is on of the comments sent to the newspaper. Comment on it.

Package or DIY? There's no competition really is there? I book budget airline flights. They offer low prices and total flexibility. The use of a hire car can be as low as £60 a week; petrol's much cheaper. I can rent a nice apartment for £150 upwards a week. Brilliant for families. Total control, mobility, and affordable. What surprises me is that regimented package holidays are still sold. I suppose though there are some bargains to be had. - Michael Walsh, Liverpool