Its a real problem, the likes of Thomson and Thomascook are having to shift their strategy to medium haul because the LCCs have stolen the SH market. Cyprus is probably on the start of medium haul and a major destination for the above, as well as Turkey and Egypt. Keeping the LCCs by threatening to pull out and put all of the hotels out of business is a smart threat in my book, they are only playing the same game that Ryanair do whenever anyone tries to run a route that they are on as well, eg drop prices and run it at a loss until the other carrier gives up.