Common Ownership.

Common ownership is where different companies are all owned or controlled by the same company. For example Thomas Cook has travel agent shops or you can book online. They are also a tour operator which means they work with hotel companies to put together a package which they then sell in their own shops. They also have their own aircraft on which their customers fly from the UK to place around Europe (short haul). Thomas Cook are a private company who focus their business operations on the outbound tourist market. This is an example of vertical integration.

Vertical integration:

Travel businesses may be large enough to be able to take over other smaller businesses that offer other travel products and services. For instance, if an airline was taken over by a tour operator, this would be an example of vertical integration; the tour operator would be looking to benefit from lower costs in allocating customers their air travel services.

This would mean that the tour operator should be able to make more profit from its overall business. The same tour operator might also take over a travel agency in order to find a more profitable way of selling its travel products and services.

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Other companies that have vertical integration are easy and Virgin

Another example of common ownership is Merlin entertainment which is an example of horizontal integration.This is where a company buys other similar companies that attract the same sort of target market. Merlin en entertainment has bought companies in the family entertainment business which makes them the second largest in this business after Disney

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Unlike Thomas Cook and other companies such as Easy and Virgin, Merlin markets their companies with their own brand image so that the customer doesn't realise that they are all owned by one single company. They are able to offer annual passes so the customer can visit all the different attractions as many times as they like for a one off payment. This benefits the customer because they get better value for money as visiting the attractions will not cost as much.
Horizontal integration benefits the company as they are able to promote other attractions they own at each of the sites. If a family visit Chessington they will see adverts for Madame Tussauds and may decide to go there at a future time if they have a good experience at Chessington.

Horizontal integration:

easyJet took over Go! in 2002.
easyJet took over Go! in 2002.

Image: easyJet took over Go! in 2002 - an example of horizontal integration. Copyright: easyJet airline company limited

This is where a business offering one travel product takes over another that offers a very similar travel product or service. For example, when easyJet took over Go! in 2002, it was a case of one budget airline taking over another no-frills airline. Although the two companies became one, they could have retained their different brand names. In fact in this case, easyJet very quickly re-branded all of Go!'s planes with their own distinctive livery.