Local tourist industry concerned over buy-out

The chief executive of Thomson Holidays, Charles Gurassa, arrives in Majorca today just 24 hours after Balearic hoteliers were rocked by the news that the tourism industry could become dominated by three big tour operators in the wake of Europe's top tour operator Preussag, which owns German tourism giant TUI, winning the battle for Britain's second biggest tour operator, Thomson Travel Group Plc. Local hoteliers and the Balearic government yesterday expressed their concerns over another major corporate purchase in the international tourism industry. The big three are now Britain's Airtours, and Germany's C&N Touristic, who lost its bid for Thomson, and Preussag which owns TUI. Balearic hoteliers have been forced to watch a series of substantial corporate changes in the travel industry over the past few years and each time their bargaining power has been pruned. Now the Hoteliers Association fears that, with just three main players dominating the Balearic's two principal markets, the UK and Germany, they will be unable to exert sufficient influence when negotiating new contracts. The new TUI travel group will account for two million tourists to the Balearics - 20 per cent of the global market. Balearic Tourism Minister Celesti Alomar said yesterday that, while the “process is unstoppable” he is worried about the impact the merger will have on the market. However, he said that the only “road to follow” is the push for better quality and better company co-operation. Similar sentiments were echoed by the chairman of the Iberostar travel group, Miguel Fluxá who said that, now more than ever, there is a need for better co-ordination and communication between hoteliers. Preussag's £1.8 billion counterbid to C&N's was accepted in weekend negotiations by Thomson's board and by Woodbridge International Holdings BV, a vehicle for the Thomson family with a 22.7 percent holding. “The directors of Thomson unanimously recommend that all Thomson shareholders accept the Preussag offer,” Hanover-based Preussag said in a statement.