The U.K. tour operator/travel agency business is examined for the period 1989 to 1993 with the aim of investigating the nature of competition in outbound tourism. The industry is examined using the industrial organization (IO) framework and by empirical testing using econometrics. The article argues that the IO approach can be usefully applied to this tourism sector. It is suggested that the industry can be characterized as segmented on the basis of company size. Comments follow on the relevance of these findings for industry practitioners and competition policy.
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