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Last Updated: Thursday, 28 February 2008, 00:01 GMT
Is holiday fever going to spread?
By Kevin Peachey
Personal finance and consumer affairs reporter, BBC News

Beach scene
Millions of UK holidaymakers will seek the sun this summer

Perhaps it is the winter chill, or maybe the fast disappearing memory of Christmas, but at this time of year our thoughts turn to summer holidays.

Booking season starts in earnest after the first pay packets of the year arrive.

But will families be digging deep for a place in the sun as rising fuel bills start to land on the doormat, credit is harder to come by and house prices stall?

They already have been, according to Frances Tuke, spokeswoman for Abta. She says Abta members have been reporting a very busy January and February, although there are no figures yet to back this up.

"People will find a way to pay. They tend to cut back on things on home improvements and still go on holiday," she says.

She predicts that spending on foreign travel will stay around the same this year as in 2007.

'More adventurous'

In the 12 months to December 2007, there were 70.1 million visits abroad by UK residents, according to the Office for National Statistics. This was a single percentage point rise from 69.5 million during the previous 12 months.

4.2bn - amount spent by overseas residents on visits to the UK in the year to December 2007
16 million - number of visitors to London in 2007
Five - other countries more popular than Britain for overseas tourists
33% - level in a poll of the UK inbound tourist industry who thought a carbon-trading scheme would work for them
133 - number of countries whose residents will have to provide a digital finger scan to travel to the UK in 2008

Visits to Europe remained broadly the same (at 55.1 million), to North America they decreased by 2% (to 4.6 million) and to other parts of the world they rose by 7% (to 10.4 million).

Places such as Turkey, Egypt and Morocco are proving popular destinations for package deals, with no-frills airlines serving travellers to France and Spain, says Ms Tuke.

"People are becoming very demanding in their holiday choices. They want to be a bit more adventurous," she says.

Climate change

Flooding crippled parts of the UK last summer, and 2007 saw the wettest July on record in the UK.

While memories of soggy holidays might push some families abroad in search of guaranteed good weather, this would be balanced by those showing less enthusiasm about flying owing to environmental concerns.

Liverpool's year-long tenure as European Capital of Culture will add to the temptation to holiday at home, but there is some concern that visitors from the USA are less likely to top up the numbers.

UK tourism's biggest and most influential market is visitors from the other side of the Atlantic, but the credit crunch and the weakness of the dollar means US consumer confidence is extremely fragile.

In contrast, the pound has fallen in value by 11% against the euro in the past year.

Aircraft in the sunset
Package tourists are becoming more adventurous

The strength of the euro means that US visitors might be replaced by holidaymakers from the eurozone, but this would hit revenue for the UK tourism sector.

"European visitors generally stay for shorter periods and spend much less than long-haul visitors," says trade organisation UKinbound.

Its latest "business barometer" showed a dip in visitor arrivals and forward bookings for stays in the UK in the last quarter of the year compared with the same period in 2006.

The biggest drop in forward bookings was the 4.8% fall in December.

"The prospects for 2008 do not look promising," the report says.

Yet a new report from PricewaterhouseCoopers (PwC) suggests that UK hotels are well placed to cope with the economic slowdown.

While new projects might be delayed, existing hotels - often offering specialist services - will see revenue grow by 4.1% this year and 3.6% in 2009, PwC predicts.

This growth would push up the average room rate in London to 127 a night in 2008.

Elsewhere in the UK, the PwC report says hotel guests are more aware of their carbon footprint. This should give urban hotels with public transport links and a range of commercial, conference and leisure facilities a competitive advantage.

Eastern promise

While travel from the west to the UK starts to dry up, many are looking to the east.

New York skyline
The weakening dollar means the US is a cheaper destination for UK visitors

According to tourism group VisitBritain, the number of inbound visits to Britain from China increased by 27% in the first 10 months of 2007.

The handover of the Olympic torch to London at the end of this summer's Games in Beijing would promote Britain to the increasing numbers of middle class Chinese able to afford international travel, the group says.

But UKinbound fears that the time it takes overseas applicants to get a visa, as they must now provide biometric data, and the cost of a visa compared with Europe are putting off potential Chinese, Indian and Russian visitors.

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