The Changing Face of FIT Packaged Vacations

Modern vacation packaging began in the early 1950s when a retail travel agency saw an opportunity in the marketplace for easy, convenient vacation arrangements pre-selected and packaged by experts and offered at economical prices.

Fred Kassner and Gil Haroche, the founders of Liberty Travel, offered basic travel components packaged together, and their innovation was so successful that they found a market selling the packages to other retailers, thereby becoming wholesalers. In 1951, they started Keystone Tours to sell wholesale vacation packages.

“We revolutionized the travel industry by introducing the vacation package concept,” said Kassner. “By combining hotel accommodations, airfare and ground transportation to our initial two destinations, Puerto Rico and Florida, we became your neighborhood wholesaler.”

While Keystone Tours (today known as GOGO Vacations) was not the first to package vacation components, it did establish a new market. The packages that existed at the time, according to Kassner, were mostly for European travel and targeted to affluent travelers.

“Our innovation was doing it mass market as opposed to luxury,” he said. “In the ’30s and ’40s traveling was for the rich, students and teachers. The blue collar workers went to the Jersey Shore or Wisconsin Lakes. They didn’t go on cruises or to Miami. Our packages took that market and got them to travel. They didn’t know they could get all that for that price.”

Keystone was a great success, and no great idea remains secret for long, so in the ‘50s, ‘60s and ‘70s, many other companies emulated Keystone’s model and tried to claim a share of the vacation packaging market. Each one brought its own style and individual variations to the vacation packaging concept. They varied across a broad range of differences in destination, price range, hotel style and inclusions.

Growth of a good idea
The titans of vacation packaging grew up and took their places in a competitive market through the ‘50s, ‘60s and ‘70s: Pleasant Holidays, Apple Vacations, Funjet Vacations, Travel Impressions, and a host of others that have come and gone over the decades.

By the 1970s, when airline deregulation was put in place, the age of vacation packaging was rolling full tilt, and individual operators were applying the concept to a variety of destinations and trying different kinds of combinations of components. Independent packages started in the most accessible destinations, such as Florida and the Caribbean, and gradually the concept has spread to destinations all over the world.

Avanti Destinations was one of the first to take independent travel far beyond the North American beach destinations. Founder Harry Dalgaard said, “I started this company for people who like to travel the way I do, independently.”

Avanti was on top of the growing wave of people wanting to travel independently. Founded in 1981, Avanti got the jump on competition in the 1990s with a proprietary technology that made it easy for travel agents to assemble packages from a list of individual components. The technology enabled the company to seamlessly connect multiple destinations with air, hand-picked hotels and sightseeing. Avanti started selling packages to Europe, then expanded to Latin America in 1990 and to Asia in 2015.

A highly competitive market
Once the public got a taste for how much travel they could get for an affordable price, the demand climbed and the market grew. Though the market has its ups and downs, overall demand remains strong and continues to grow year after year.

The public’s insatiable desire to travel has fueled a huge, healthy market for independent travel. Because the demand is so strong, competition is fierce as many players try to claim a share of the market. It’s a diverse market and competition drives it and keeps it fresh with ever-new innovations.

In such a competitive market, no vacation packager can afford to sit still. They have to constantly seek ways to improve their products and services to ward off competition. It makes for a rich selection of choices for travelers.

Novelty and innovation
The public’s desire for novelty goes hand-in-hand with its desire for travel, which makes vacation packaging a very innovative market. The various packagers are always seeking to secure an advantage over their competition by offering the latest new destinations, styles of travel, and specific inclusions.

It’s a never-ending battle for primacy in a dynamic, ever-changing market full of players who compete to be the best at anticipating what the public will want next, and what new trends will dominate the market.

Independent travel has continued to grow in popularity as the traveling public has become increasingly sophisticated and confident in traveling independently.

Authenticity and immersion
Along with the evolution toward greater independence today is a growing demand for more authentic experiences, immersion in the destination and contact with locals. Independent travel packagers have responded by trying to find ever-new ways to accommodate those wishes through inclusions in independent packages.

Vacation packagers find novel ways to give clients immersive experiences. Many of them focus on food in response to the wave of culinary interest that has swept America over the last couple of decades. Cooking classes and tastings of wines, beers or spirits have become among the most popular inclusions.

Although independent travelers do not want to travel with groups, an independent package may include some guided or group experiences as inclusions, such as a guided city tour or a tour of a winery.

The range of popular inclusions today is virtually infinite and caters to practically every special interest. Popular inclusions are such activities as: Broadway shows, museum visits, bungee jumping, whitewater rafting, canoeing, kayaking and many others.

Variations on a theme
As travelers continue to become more sophisticated and world-wise, independent travel has continued to grow in popularity. As independent travel has eaten into the guided tours market, no tour operator can afford to stay out of the independent travel market. So traditional escorted tour operators have responded by offering their own versions of independent travel. Tour operators continue to look for ways to combine the advantages of guided travel with those of independent travel.

The Travel Corporation (TTC) – which includes classic escorted tour operators Trafalgar, Insight Vacations and Contiki – offers independent travel on a custom basis, building programs to the tastes of individual clients, rather than offering pre-formed packages off the shelf. TTC offers independent custom programs for the mid-market under its Brendan Vacations brand and luxury independent programs under the Insight Gold brand.

For some clients who have traveled with pre-formed packages off the shelf, the custom tour arrangement takes independent travel out of the pre-packaged mode and gives clients the freedom of individual choice.

“Personalization and exclusivity are important decision-making factors for luxury travelers when choosing a private bespoke journey with Insight Vacations or Luxury Gold,” said Jon Grutzner, president of Insight Vacations and Luxury Gold. “Many of our clients have traveled previously on mass-market trips, and are ready to try a more elegant, tailored style of trip. They may only have a couple weeks of vacation a year and they want to do it right, so they are increasingly choosing the luxury bespoke option. This allows them to choose the type of transportation that suits them, whether it be coach, car, or van, and allows for a larger degree of personalization based on their particular interests, whether they be culinary, historical, golf, or nature.”

The Globus Family of Brands blends the advantages of guided travel with those of independent travel in a hybrid product called Monograms. It provides an independent travel experience but takes advantage of the tour operator’s network of contacts, its bulk buying power and its hands-on experience and knowledge of the destination.

The Monograms product includes meet-and-greet at the airport, transfers to hotel, some basic tour inclusions and local hosting and on-call assistance. The idea is to make independent travel packages easy to purchase and also take advantage of the support of the tour operator’s destination management team, while remaining fully independent.

No one can predict precisely how independent vacation packages will evolve in the future, but it’s certain that they will continue to be popular and innovative as travelers continue to seek new experiences.