The parent companies of the two largest tour operators in the State are to merge, raising fears of job losses and reduced choice for holidaymakers.
The decision by Europe's largest and third largest tour operators, Tui and First Choice, to join together in a new organisation with combined revenue of over €18 billion means their respective Irish operations, Budget Travel and Falcon/JWT, will be owned by the same company.
It follows a separate merger last month between two other industry giants, Thomas Cook and My Travel, which control two other leading Irish tour operators, Sunworld and Panorama AirTours respectively.
Between them, Budget and Falcon control up to 60 per cent of package holiday sales and are the only tour operators to have a substantial retail presence.
With their merged parent companies now planning to concentrate on internet holiday sales, this chain of over 60 shops may be rationalised.
It is likely, given the size of the companies and their dominance in the market, that the Irish end of the deal will first have to be approved by the Competition Authority.
The deal will not have any effect on holidaymakers' plans for this year, as the merger of Tui and First Choice is not due to be completed until the latter part of the year.
However, the choice available to holidaymakers in future years may be reduced. The Irish Travel Agents' Association said the merger of the two leading companies raised concerns about market dominance which it believed the European Commission would have to consider.
ITAA chief executive Simon Nugent described the Tui/First Choice announcement as unsurprising.
"This is a highly competitive industry. Tour operators' margins are very tight and we also saw the merger announcement of Panorama AirTours and Sunworld just a month ago."
Mr Nugent said three out of four Irish holidaymakers now opted for holidays which were not a traditional package. ITAA Travel agents spent most of their time building tailor-made trips for consumers combining scheduled low-cost flights, trusted hotels and entertainment elements.
Asked if the merger was good for consumers, Mr Nugent replied: "We will just have to wait and see. It is clear that saving costs is what is driving this marriage. That does not normally imply increased choice for the consumer.
"However, if the merger goes through and the new company offers more direct destinations out of Ireland that could be exciting and keep Aer Lingus, Ryanair and other airlines on their toes," Mr Nugent said.
