Ten years ago the merger of MyTravel and Thomas Cook would have had a big impact on the price of package holidays, removing one of the of Big Four tour operators.

Today consumers will see little change.

Back then the UK market was dominated by Thomas Cook, Thomson, First Choice and MyTravel.

Now Thomson is part of a German-owned travel company, Tui, that spans Europe and First Choice has long made more money from specialist and long-haul travel than a package to the Costas.

The package holiday has been in a slow, but far from terminal, decline for the past decade, while all the growth has been in independent and specialist travel, virtually all sold through the internet.

More holidaymakers are booking their holidays independently, a trend fuelled by the rise of low-cost airlines, internet travel purchases, increasing foreign property ownership and the desire for more, shorter breaks at the expense of one or two seven-day or 14-day holidays.

The impact of this trend on package holiday companies such as MyTravel has been acute — last year the Big Four sent 13.8 million people on package holidays, compared with 18 million who will organise their own trips this year.

A decade ago, package holidays accounted for more than two thirds of holidays.

Loyalty to brands has gone out the window in favour of ruthless bargain hunting, be it online, over the phone or in travel agencies.

Tour operators can no longer hide behind glossy brochures, but must compete online, where prices are transparent and use reviews and video footage to put consumers in the driving seat.

Such a merger back in the mid-1990s might have produced an increase in package holiday prices, owing to reduced competition.

Now it is more about survival of the traditional operators. The deal is expected to yield cost savings of about £75 million.

However, one industry analyst believes that the phenomenon of "distressed stock" will disappear, a regular phenomenon of recent years, in which demand does not match supply and operators are forced to dump their holidays at below cost in June and July.

An estimated two million holidays went for less than they cost last summer, when the World Cup exacerabated industry problems.

"As capacity is better managed we should see a return to more natural pricing," Guy Gillon, of PriceWaterhouseCooper's travel division, said. "So there should be less of the two-week holidays advertised for £99."

Others disagree, citing examples in the past few years of incidents of consolidation among travel companies that has failed to cut the hundreds of thousands of package holidays that remain unsold every year.

Regardless of whether the industry better adapts supply to demand, one thing is clear: with holidays it is a buyer's market — if you shop around enough, and are flexible with your holiday dates, you can still buy summer sun for peanuts.

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