Thomson Travel plans to cut price of holidays by 15%

Thomson, the UK's largest tour operator, yesterday said it planned to cut the price of its 1998 summer holidays by up to 15 per cent compared to this year. The move will mean a saving of as much as pounds 150 for a family of four paying pounds 1,000 for a holiday.

Thomson also said it was seriously considering legal action against the Association of Independent Tour Operators (Aito) over allegations it had made that Lunn Poly, the group's travel agency arm, gave its staff financial incentives to sell Thomson holidays in preference to other tour operators.

A Thomson spokesman said: "We have repeatedly said this is not the case. Anybody that says anything different is not telling the truth and there could be legal repercussions."

Aito says it has sent evidence to back its claims to the Monopolies and Mergers Commission which is currently investigating links between travel agents and tour operators.

A spokeswoman for Aito said: "All the big companies are involved in these practices. We have sent evidence to the MMC from former staff at Lunn Poly and Going Places [owned by Airtours] that they were offered payments to sell in-house holidays. They were also offered commissions to sell their own insurance."

However, Thomson yesterday launched a stinging attack on Aito in an increasingly bitter row between the big and small players in the industry.

Martin Brackenbury, a director of Thomson Travel said: "We are clear there is not a case to answer. Aito have waged a clever campaign. They have dressed their commercial interests up with claims that the consumer will be disadvantaged. In fact, they want to destroy the discounts offered by the large travel agents for their own commercial ends."

Aito reacted angrily to Thomson's claims: "This suggests that Thomson is rather worried about the MMC enquiry. It smacks of a last-ditch campaign to send the MMC off the scent."

Thomson has recently launched an advertising campaign in the trade press defending its position and its sales methods and is considering taking its campaign to the national press.

Paul Brett, chairman of Thomson, said recently: "TTG [Thomson Travel Group] is accused by so-called independents within the industry of directional selling while they portray themselves as acting impartially. This is a travesty of the true situation and we will not tolerate any further misrepresentation."

A leaked letter from the MMC recently revealed that it was considering recommending that the tour operators re-brand their travel agents to make their relationship with the parent tour operator clearer or even dispose of a large chunk of its outlets.

The MMC has now finished gathering submissions from interested parties in the industry. It expects to hand its final recommendations to Margaret Beckett, President of the Board of Trade, on 7 November.

A final decision by the Government is not expected until early next year.