Within the past two months, four of the country's busiest tour operators have merged, creating businesses with more muscle, increased buying power and, perhaps more importantly, the ability to stand their ground in the face of competition from operations such as Budget Travel, owned by the German TUI group Falcon and JWT, part of the First Choice group and the MyTravel-owned Airtours.

In September, Kerry-based Slattery's Travel acquired Dublin-based Stein Travel, to create a group that will generate turnover of 70m next year. Less than two weeks ago, two Dublin-based firms merged, Sunway Travel and Omni Tours, which was owned by Dublin businessman Bernard Healy.

Sunway managing director Tanya Airey expects the combined group to report revenue of 100m for the 12 months to the end of October next year.

But don't expect a wave of consolidation, say those in the industry.

There are too many small players that don't have the scale to produce any meaningful synergies through merging with competitors.

"There's only so much more can be done in the trade, " said Airey. "There's only a small number of Irish-owned tour operators. Many of the others are foreign-owned, so you'be be waiting for moves on a wider scale there."

Airey added that the acquisition of Omni Tours will expand Sunway's footprint to markets, particularly Turkey, where it has not previously had a presence. Much of the business to the country is on a repeat basis, she added, which made Omni an attractive proposition. Airey expects her customers to fill about 120,000 airline seats over the next 12 months. But as competition remains steady, margins have been coming under pressure across the industry.

"That's why we needed to grow. We really needed quantity as well as quality, " according to Airey.

"For the first five years, all Sunway did was operate a charter to Morocco. You couldn't do that in this day and age.

But the bigger we get means we can add on new destinations and not have to hire more staff and absorb more costs."

Two Sunway entities . . . Sunway Ltd and Sunway Holidays reported a combined operating profit of over 366,000 last year.

The competition has come not only from within the tour operators but from external pressure exerted in Ireland by Ryanair and Aer Lingus.

The latter rebounded from near collapse after 2001 by adopting a low-cost model and aggressive expansion to destinations that were traditionally the bread-and-butter of operators such as Stein Travel.

The operator had to work hard to combat the industry changes. Last year it reported an operating loss of over 500,000, after posting an operating loss of over 5.1m in 2004.

"Michael Stein was blazing a trail years ago in terms of internet bookings, " said Slattery's Travel managing director David Slattery, who points out that Stein had an online presence by about 2001 that had been in development since the late 1990s. But Stein only sold seats. That made it more difficult to meet the challenge from Aer Lingus, which began to eat into Stein's sun-destination business. Slattery points out that the merger creates welcome synergies, but that it wasn't a case that without it the Kerry firm would have been in any danger from bigger rivals.

"You really have to keep coming up with new destinations, " said Slattery, whose firm was the first in the country to operate charter flights to South Africa. In total he expects to fill about 90,000 seats in the 12 months to the end of October next year.

The increased need to innovate in what agents and operators say remains a very competitive market, will surely result in fallout, but Slattery is optimistic about the outlook.

"I think there's an opportunity for everyone in the travel business to stay in it, " he said.

"But travel agents have to reinvent themselves to be advisors rather than just sellers.

They can't just wait for the phone to ring. If they're sticking to that sort of principle of doing business, they might just find themselves in trouble."

And despite the boom in internet travel, many customers still prefer to pick up a telephone or visit a retail outlet to complete their booking.

Tanya Airey believes that just 20% of its business is generated via online bookings, while Slattery said the total figure at his company is just 15%. About 65% is generated from sales by travel agents and the remainder from its call centre. So would Slattery consider cutting commissions paid to travel agents? A move last year by Budget Travel to eliminate the commission it paid to agents prompted outcry in the industry and many agents boycotted Budget Travel's products. But Budget Travel could fall back on its own sizeable retail network.

"Travel agents work hard for the 10% they get from us, so reducing it is not something that's on our radar at the moment, " said Slattery.

Interesting too is the impact already being felt from SSIA accounts. Both Slattery and Airey said they've noticed an increase in the number of couples spending as much as 10,000 each to go on dream holidays. The average, however, remains about 2,500 each.

President of the Irish Travel Agents' Association, James Malone, who also runs Rathgar Travel in Dublin, said there has been a "huge" interest in holidays for 2007, the year when the majority of SSIA accounts mature. Malone adds that there's a lot of opportunities for niche players in the market, as more people opt for holidays that involve obscure countries or a combination of destinations. Many travel agents have "redefined" their product offerings, he says.

The ultimate irony is that as Irish operators consolidate to bolster their presence, they must undoubtedly become interesting takeover candidates for the foreign-owned competition they seek to brace themselves against.

But Slattery says his company, for one, isn't for sale, just yet at least.

"We're family owned and we'd like to stay that way. But you can never say never."