What Is Vertical Integration in Travel and Tourism?

Vertical integration in travel and tourism can mean, for example, that the various products or services involved in a single vacation are all owned by the same parent company. A tour operator acquires a travel agency that makes arrangements for flights, hotels and cruises all owned by the tour operator.

Vertical integration in travel and tourism comes with risks. When a travel agency expands to include other products and services along the travel supply chain, the company moves beyond its area of expertise. The agency also makes large capital investments that can lead to potential financial issues and conflicts of interest.