This has been on the cards for a while in my opinion. The industry has been suffering from overcapcity for years, just look at all the cheap deals on teletext. Tour operators are not going to make much profit with those.
We have actually given up going abroad due to a continual fall in standards. Last year we went to Mallorca three times, once in a five star hotel and twice in four star accomodation. The treatment we received got poorer and poorer with each successive trip, and these were Thomson Al la Carte holidays. Finally we had had enough and if we do go back it will be without the services of a tour operator.
Cost has never been an issue, what is important to us is quality and position, and well away from anything "all inclusive," which seems to be what most folk want nowadays, for reasons known only to them.