Thomson has responded to the challenge by strengthening its sales division and moving all its holiday marketing operations to its main London base at Greater London House.
The transfer of its Birmingham operation, acquired when it bought Horizon four years ago, is expected to result in 50 redundancies in the Midlands.
Among other changes revealed yesterday is the appointment of Peter Rothwell to the newly-created post of sales director. Mr Rothwell previously ran Thomson's travel agency chain, Lunn Poly.
Thomson has also created a holiday service department, designed to improve holiday quality. In addition the company has set up a new purchasing division to ensure that it gets the best possible prices in its contracts with hoteliers and other suppliers.
Charles Newbold, managing director, described the changes as 'fine tuning' and added: 'We are placing total focus on holiday quality and ensuring that we run our business at the lowest possible cost.'
The changes reflect Thomson's concern about the renewed threat to its long-held supremacy in the package holiday business. It has been the biggest tour operator since the collapse of Clarksons and Court Line 18 years ago.
The company knows that even if the Airtours plan falls through Owners Abroad is certain to be acquired by one of the four big German travel companies keen to gain a foothold in the UK market.
Thomson's main worry at the moment is promoting sales of its 1993 packages. Special offers from travel agency chains encouraged a boom in package holiday sales between Boxing Day and New Year's Day.
But, with many of these offers having ended, sales have fallen off, increasing the likelihood of further price-cutting this year.Reuse content