It's going to be a blue Christmas for the big cheeses at MyTravel Group who reported a whopping £910 million loss last week.

While the travel company, formerly known as Airtours, has blamed structural problems, its predicament has not been helped by a general downturn in demand for traditional package holidays. Bookings for summer 2004 are down around 30 per cent on last year and a report published last week showed the number of high street travel agents has dropped for the first time in 10 years.

Tour operators insist that the package holiday is not dead, but it's certainly not looking too healthy either. Last year, for the first time, the number of Britons travelling to Spain independently overtook the number arriving on package holidays, while bookings are drifting away from high-street travel agents at a rate of 3 per cent a year.

At the Association of British Travel Agents conference earlier this year there was a frenzy of finger-pointing as everyone looked for someone else to blame for this state of affairs. The tour operators blamed the media for 'encouraging' people to put together their own packages, while the travel agents blamed the tour operators for 'encouraging' people to book direct. British Airways came under fire from travel agents for undercutting them by offering cheaper fares on the internet while BA blamed the no-frills carriers for offering unrealistically low fares.

In the past the mass-market tour operators' response to hard times has been to slash prices. But even 55 per cent discounts last January failed to give MyTravel the boost it needed so perhaps it's not the price that is wrong, but the product.

The reason people put together their own holidays rather than buying 'off the peg' is because it gives them the freedom to tailor-make a trip that suits their requirements. They want to choose the length of their holiday, which airport they fly from, which time of day they travel and exactly which hotel they stay in.

Unless the big holiday companies and travel agencies can keep pace with their increasingly sophisticated customers they are going to be left behind.

I was interested to note last week on a flight to Asia that the airline had gone to the trouble of providing an educational video about how to reduce the risk of DVT. We were treated to lots of little diagrams showing us how to rotate our ankles and reminded to drink lots of water.

But it struck me as a slightly meaningless gesture when absolutely everything about the flight seemed geared to making you pass out in an alcoholic stupor moments after folding up your meal tray. Despite the fact that it was a daytime flight, as soon as lunch was served - accompanied by copious offers of wine - the lights were dimmed, the window blinds pulled down, the air-conditioning switched off and the cabin crew disappeared behind closed curtains. The plane was soon a mass of inert figures slumped in front of flickering TV screens and enveloped in a stifling fug.

I was trapped on both sides by semi-comatose bodies and unable to escape to get some water or stretch my legs. I can see why it might suit the crew to have us unconscious for most of the flight but judging from the whey-faced complexions of my fellow travellers when we disembarked 10 hours later, it certainly doesn't suit the passenger.