Dynamic packaging commoditised the trip. Now it is commoditising the brand.
The package is thriving, but the operator is arriving too late.
The package holiday is having its best years. The CAA expected around 4.5 million people to book an ATOL-protected package in January 2026 alone, 200,000 more than the year before, summer 2026 bookings were up 18%, and Gen Z books packages at a higher rate than millennials or Gen X. Demand is not the problem.
The problem is where the holiday company now sits in the decision. The first question, "where should we go in October with two kids and a budget of three grand?", is asked of Google's AI Overviews, ChatGPT or Perplexity, and the answer comes back as a shortlist of places with whichever brands got cited attached. By the time the customer reaches a holiday company's search box the destination has been chosen, and most holiday brands had no part in choosing it.
They show up once the comparison has started, which is the point at which the same flight and the same hotel sit on five sites at similar prices. The operator arrives late and competes on product and price, with a product that is no longer its own. That is a budget problem before it is a content one, and it shows up in five places a board already watches.
What this costs, line by line
It is tempting to file this under SEO and hand it to the content team, but it is essential that it belongs in the budget conversation for these key reasons.
Acquisition cost. A brand that is absent when the destination is chosen has to buy its way back in once the comparison starts. That is the most expensive moment in the funnel, because every competitor is bidding on the same destination and hotel terms for the same undecided customer.
Paid media dependency. The demand that used to be created by the brand is now rented from a search engine, quarter after quarter, with no asset left behind. Turn the spend off and the volume goes with it. Nothing compounds.
Differentiation. When the components are shared, the only differentiators left are price, protection and service, and two of those are table stakes. Being the brand that recommended the place is the one differentiator the components cannot copy.
Conversion. A customer who arrives with the destination already decided, and your brand already attached to that decision, converts on confidence rather than comparison. A customer who arrives from a price-comparison click converts on price, and churns on it.
Margin. Put those together and the pattern is familiar: rising cost to acquire, a bigger share of it paid to intermediaries, and a product sold on price. Dynamic packaging moved the yield risk to the supplier. It did not remove the margin pressure. It moved it to marketing, where it is harder to see and easier to normalise.
None of this appears in the budget as a line called "AI visibility". It is hidden among media inflation, flat conversion and a brand that struggles to differentiate itself.
How things got here
Twenty years ago a holiday company sold something nobody else had: charter seats and hotel beds committed months ahead, printed in a brochure and marketed as that specific combination. The product was proprietary and the brand was the product. It also carried the yield risk, and dynamic packaging removed it. The package is now assembled at the moment of booking from scheduled airline seats and third-party hotel inventory, and the supplier carries the capacity. TUI has been the most open about the shift: its own targets have the wholesale package growing at roughly 1% a year against low double digits for dynamic, dynamic volume rose 17% in a single year, and Ryanair and easyJet seats now sit inside TUI packages.
On the commercial logic this was sensible and every serious operator in Europe has followed. What nobody priced in was that when the flight is an easyJet flight and the hotel is on Booking.com, the package has no proprietary component left. The brand's historic job was to make a specific product desirable, and the product is no longer specific. What remains is the fulfilment layer: the booking, the protection, the rep in resort. Valuable, but outside of loyalty it is not a reason to choose you before the price is known.
The brochure page died with the brochure, and nothing replaced it. That page was never really about the hotel. It was the operator's answer to "why here, and why with us?" When the product became a search result that content became an afterthought: the destination list grew tenfold and the content budget did not. Most holiday brands now have thin, generic or absent content for most of the places they sell. The brand stepped back from the one part of the decision where it could still be preferred.
Brands are only half ready for this change
Earlier this year we scored 100 travel brands on whether an AI assistant could find, read and cite their sites. Tour operators did better than any other part of travel, averaging 52 out of 100. Airlines scored 27. Holiday companies are the best prepared part of the industry but still only halfway there.
The shape of that score matters more than the number. In practice it describes sites an AI assistant can usually access but rarely has a reason to cite, because the content it finds there is about packages and prices, and the question being asked is about places. An assistant answering "where should we go in October" has nothing from a holiday brand to quote. So it quotes someone else.
Search did this once already, when destination queries went to Google and operators learnt to compete for them. The difference now is that the AI answer does not return ten blue links. It returns one shortlist and, often, one recommendation. There is no page two to recover on.
The destination is the product now
If the components are commodities, the only thing left to own is the reason to go. The package becomes the fulfilment of a decision the brand helped make, rather than the thing being sold.
That changes what the marketing function is for. Marketing a package means pushing a price and a hotel at someone who has already decided where to go, which is conversion work. Marketing a destination means being the brand that helped them decide, and then being the obvious place to book once they have. That is demand work, and demand is where preference lives.
It also fits where the big operators are already investing. TUI is adding hotels under its own brands, growing cruises and building an experiences business through Musement. Those are the parts of the package that are still differentiated. Destination content is the thread that pulls a customer who arrived on a generic Spain query toward a TUI Blue property and a TUI excursion, rather than toward a price comparison.
Some operators have worked this out. In conversations with us, the reasoning from the largest of them has been simple: they used to market the package; now they have to market the destination. The ones who have not reached that conclusion are still spending their budget at the bottom of a funnel somebody else now controls the top of.
Why nobody does it, yet
The reason most operators have not marketed the destination before now is that it is hard at the scale dynamic packaging created. A brochure programme covered forty or fifty destinations, and a content team could write a decent guide to each. A dynamic model sells every destination on every scheduled route, which runs to several hundred for a large operator and more once you count the towns and regions around each airport.
Written the traditional way, a good destination guide takes a writer days, costs hundreds of pounds and starts going stale within a season. Multiply that across several hundred destinations and you get a programme measured in years and a budget no marketing director will sign. That is why the content went thin in the first place, and why it has stayed thin.
Four things have to be true for destination content to do the job described above.
- It covers every destination you sell. Not the top twenty. If a customer can book a package to it, there needs to be a reason to go there on your site, in your voice, before they ask an AI assistant. At dynamic-inventory scale that means a system for producing content rather than a team writing it by hand.
- It is the kind of content AI assistants cite. Specific, local, current, structured and crawlable. Generic inspiration copy does not get cited. Content that answers the question a traveller actually asked, with named places and practical detail, does. The brand has to read like the local expert for every place it sells.
- It is affordable at full coverage. The cost per destination has to be low enough, and production fast enough, that covering the whole range is a sensible line in the marketing budget rather than a multi-year programme. If the economics only work for the top of the range, the brand stays invisible for everything else it sells, which is most of it.
- It routes to the booking. Destination visibility that does not connect to the package is a brand exercise. The content has to carry the customer from "why here" to "book this" without handing them back to a search engine in between.
None of this requires abandoning the package. It requires putting the destination in front of it, which is where it sat when the brochure was the product.
The question for leadership
Dynamic packaging was a good decision. It moved the risk to the supplier and let holiday companies grow without betting the balance sheet on next summer's demand. The bill is arriving now, in media cost, flat conversion and a brand that a customer asking an AI assistant where to go in October never hears named.
The brochure used to answer "why here, and why with us?" Something has to answer it now, and whoever does will own the decision that everything else depends on.
For the people who own the budget, the practical conclusion is this. Destination content has moved from a nice-to-have in the marketing plan to the thing that decides whether the brand is present when the customer chooses. The constraint was never whether it mattered. It was that producing it across the breadth dynamic inventory demands was too slow and too expensive to be worth doing. That constraint has changed.
Where we sit in this
Obvlo exists because of that constraint. We build destination content for travel brands at the scale dynamic inventory demands, engineered to be found and cited by AI assistants and to route the reader to the booking. The research above is ours, and some of the operators mentioned are ones we work with. We have spent the last several years inside exactly the problem this piece describes, which is why we can be specific about what the content has to be and what it has to cost.
One question to take back to your leadership team
How visible is your destination portfolio to AI? Not your brand, and not your top ten resorts. The full range you sell, as an assistant would see it when a family asks where to go.
Most operators have never checked, and the answer is usually uncomfortable in a useful way. We score travel brands on exactly this, and we are happy to run the number for yours. If you would like to see where your portfolio stands, simply input your url to our free checker here.
Until then the question is worth asking in plain terms. When the package is no longer the product, what does your company sell?