UK tour operators: the airlines took over the package holiday

A generation ago the British package holiday belonged to the tour-operating conglomerates — Thomas Cook, Thomson, First Choice. Thomas Cook is gone, Thomson and First Choice are folded into TUI, and the companies that actually sell Britain its package holidays now are airlines. Jet2holidays books £6.06bn — over a third of the entire market by itself — easyJet holidays £1.92bn, British Airways Holidays £1.54bn; add Virgin’s and Emirates’ holiday arms and the airline subsidiaries book roughly £10.3bn of the £16.6bn that the 140 UK tour operators publishing a full profit-and-loss turn over between them. The airlines won because they own the scarce input — the seat — and a package operator bolted onto an airline gets its flights at terms no independent can match. Below them, a resilient mid-market of escorted-tour and specialist operators earns the market’s best margins the old-fashioned way: Wendy Wu Tours at 18.7%, Distant Journeys at 10.9%, Riviera Travel at 10.7% on £213M. Figures are approximate — verify against a company’s own accounts before relying on any single number.

Read this before the tables

Three things change how you read every number below.

Tour operators book the whole holiday. An operator sells as principal: the flight, the hotel and the transfer all pass through its revenue line. That makes turnover here real money handled — but it means a 5% margin on gross holiday value is a perfectly healthy business, and it means you must never compare these margins with travel agents, who book only their commission. The agency side of the trade — including TUI UK, which sits with the agents and consolidators — is mapped separately in our UK travel agents report; read the two together and the £6bn-plus TUI books there is the same kind of gross, whole-holiday revenue as Jet2holidays’ £6.1bn here.

The airline arms’ margins are set inside the group. Jet2holidays runs a 2.7% margin on £6.06bn; easyJet holidays a 13% margin on £1.92bn. That gap is not (only) operating skill — each buys its seats from a sister airline, so where the group’s profit lands between the airline entity and the holidays entity is intercompany arithmetic. Jet2holidays’ profit is also mostly interest earned on customers’ deposits before they travel (roughly £120M of the £165M), not holiday margin. Read the airline arms’ absolute profits as real, and the margin differences between them as group plumbing.

One luxury operator appears three times. Audley Travel, the tailor-made specialist, files through a stack of holding companies: the top company shows £482.0M of turnover and a £15.4M pre-tax loss, the layer below it the same £482.0M with an £11.2M profit, and the main UK trading company, Audley Travel Group, files its own company-only accounts for the same year (£330.9M turnover, £35.2M profit — a subset of the £482.0M consolidation). One business — the tables below count it once, at the top layer — and the sign-flip between its layers is the classic private-equity fingerprint: the operating group makes money, and buyout-loan interest above it turns the result red. Deduplicate those layers and the market’s combined turnover is nearer £15.7bn than the £16.6bn headline.

The giants

*Virgin Holidays’ 18 employees are an artifact of group structure — most of the people selling its holidays sit with the airline, so read its margin as a group arrangement rather than an 18-person miracle. †Audley’s row is its top holding company; a second holding layer (same £482.0M, £11.2M profit before the loan-interest layer) and the main UK trading company, Audley Travel Group (£330.9M, £35.2M — same-year, company-only accounts, a subset of the £482.0M consolidation), are folded in, as described above. The Portman Travel Group is corporate travel management — a different trade that happens to share the category — and is left out of the leisure reads below.

Two stories sit in this table. First, easyJet holidays is the profit machine: £250.0M of pre-tax profit — more than Jet2holidays earns on three times the revenue — while growing turnover +26% and headcount +22%, the most aggressive expansion among the giants. However the group chooses to price its seats internally, the strategic point stands: the marginal cost of filling an aircraft the airline already flies makes the bolt-on package business ferociously good. Second, the non-airline giants have the harder life: Audley’s operating profit disappears into buyout interest, Dertour UK is growing fast (+26%) but at a 1.3% margin as it rebuilds the Kuoni brand’s UK business, and Miki Travel — a wholesaler selling UK ground product to overseas trade buyers — grew revenue +17% and still lost £9.7M while cutting a sixth of its staff.

The shape of the market

The size distribution has a hole in it: just 5 companies between £1M and £5M. That’s a reporting artifact — small operators can file without publishing a profit-and-loss, and almost all of them do — but it makes the visible market unusually top-heavy: what you can see is 14 sub-£1M ventures (only 21% profitable — mostly young, investor-funded start-ups that publish because they must), and then a substantial, healthy trade from £5M up. The £5–25M band is 88% profitable and the £25–100M band 85% — like the agents next door, this is a post-pandemic survivors’ club. An operator that came through 2020, when revenue went to zero while refund liabilities didn’t, is by definition well capitalised and carefully run.

Where the money is: the specialists

Filter to genuine mid-market operators (£5–100M turnover, profitable, captives and mis-coded businesses excluded) and one pattern dominates: escorted and special-interest tours — the operator plans the itinerary, escorts the group and owns the customer relationship — earn the best margins in the market.

…and 6 more between £31M and £41M, including the standout Wendy Wu Tours (£40.9M at an 18.7% margin, the best genuine tour-operating margin in the map), Sports Tours International (10.0%, running-and-cycling event travel), Abbey (UK) Travel (8.7%, inbound group tours), the Leger/Shearings coach-holiday pair (£75.7M combined — two brands, one group, with staff employed elsewhere in it), and The Airline Seat Company (5.5%, the Canada specialist behind Canadian Affair).

Remember these are principal margins on the whole holiday: Wendy Wu’s 18.7% or Distant Journeys’ 10.9% on gross trip value is exceptional economics, and even the 5–8% cluster represents solid businesses. Four names we excluded from this read despite the numbers qualifying: Norwegian Cruise Line Group UK is the sales arm of the American cruise group, not an independent; Edwards Coaches is a Welsh bus and coach operator whose tours are a sideline; and Impact XM Europe (events and experiential marketing) and Lanza & Baucina (private luxury events — 16.9% on 12 staff) sell corporate experiences and celebrations, not holidays.

Growth, read with care

The whole growth table rides one wave: post-pandemic demand for organised, escorted travel — older, affluent customers coming back to long-haul with someone else handling the logistics. The signal to trust is profitable growth backed by hiring, and this market has an unusual amount of it.

The genuine article is the escorted-tour cluster: Wendy Wu (+46% revenue, +26% staff, 18.7% margin), Distant Journeys (+32%, +41% staff) and Sports Tours International (+39%, +29% staff) are all growing fast, profitably, while hiring — the rarest combination in any market we map. Great Rail Journeys is the biggest absolute grower, adding ~£27M of rail-holiday revenue in a year. The cautionary tale at the top is Flash Pack, the group-adventure brand for thirty-something solo travellers: +49% growth, +43% hiring, and a £3.3M loss — the one company in the table still buying its growth. And the +100% staff figures at Essor and The Travel Department are small-base arithmetic, not hiring sprees.

One company is a third of the market

On paper the top 5 hold 63.6% of the market’s turnover — but the real headline is simpler: Jet2holidays alone is over a third of it. The concentration curve measures the airline takeover more than anything else; the airline arms plus Audley make up the whole top five. Below the giants, the market is genuinely broad — over a hundred companies between £5M and £100M, most of them profitable specialists that don’t compete with the airlines’ beach-package machine so much as sell what it can’t: escorted groups, expedition ships, coach tours, golf.

Old brands, closed door

The vintage profile says the same thing the travel agents’ map said: this is an industry that got much harder to enter. The largest cohort was founded before 1990 (45 of 140), and only 6 companies incorporated since 2021 have reached reporting scale — consumer-protection bonding, trust-account requirements and the working-capital scar of the pandemic keep newcomers out. It’s worth remembering what that protection regime exists to police: a tour operator holds customers’ deposits and balances for months before the holiday is delivered — a float of other people’s money that makes the model attractive in good times and dangerous in collapses. About 17% of the map carries a Holdings/Group/Bidco-style name, the fingerprint of private-equity ownership; Audley’s loan-interest losses are what that looks like from inside the accounts.

What the map shows

1. The airlines took over the package holiday. Jet2holidays (£6.06bn), easyJet holidays (£1.92bn) and British Airways Holidays (£1.54bn) are the three biggest operators on the tour-operator register (TUI files on the agents’ side — see our travel agents map); with Virgin’s and Emirates’ arms they book roughly two-thirds of the market.
2. easyJet holidays is the profit machine — £250.0M of pre-tax profit on a third of Jet2holidays’ revenue, growing +26% with +22% more staff. But margin comparisons between airline arms are group plumbing: each buys its seats from its sister airline.
3. Escorted tours are the independent’s moat. Wendy Wu (18.7%), Distant Journeys (10.9%) and Riviera Travel (10.7% on £213M) earn the best genuine tour-operating margins — planning and escorting the trip is the part the airlines’ package machines don’t do.
4. The growth is real, and it’s hiring. Unusually, the fastest growers — Wendy Wu, Distant Journeys, Sports Tours, Great Rail Journeys — are profitable and adding staff; only Flash Pack is still buying growth at a loss.
5. The buyout layer is visible in the accounts. Audley Travel makes an £11.2M profit one holding company down and shows a £15.4M loss at the top, the gap being loan interest — and 17% of the map carries the same structural naming fingerprint.
6. The door is closed. Only 6 companies founded since 2021 have reached reporting scale; bonding, trust accounts and the pandemic’s working-capital lesson protect the incumbents.

Methodology and caveats

This covers only the UK tour operators that publish a full profit-and-loss — 140 of a register of roughly 385, so the long tail of small and start-up operators is invisible, and the near-empty £1–5M band reflects reporting exemptions rather than reality. Tour operators book the whole holiday as revenue (principal accounting); their margins must not be compared with travel agents’, which sit on commission — see our UK travel agents map for that side of the trade, including TUI. Where a group files through several layers — Audley Travel’s three entities here, the Leger/Shearings pair — tables count one entity and note the rest, and the £16.6bn headline sum still contains that duplication (deduplicated, nearer £15.7bn). Airline holiday arms’ margins reflect intercompany seat pricing and shared group services (Virgin Holidays’ 18 employees are the visible example) rather than standalone economics. Business-type labels are directional, and each row uses the latest accounts available when the data was assembled — newer accounts may since have appeared. Figures are approximate — verify against a company’s own accounts before relying on any single number. This is analysis, not financial advice.