Families opt for summer holidays at home as credit crunch hits foreign travel

Travel agents are reporting a significant drop in sales of foreign holidays compared with last summer. At the same time, there has been a surge in requests for information about trips closer to home.

The strength of the euro could also be putting people off. In some bars in Paris, a pint of beer can cost £8.

Statistics released today by internet search engine Kelkoo show the number of people looking for UK holidays is up by 39 per cent compared with last year. Searches for information about over-seas trips were down 12 per cent.

Popular British options included self-catering cottages in the Lake District, Cornwall and Dorset, with searches up 21 per cent. The number of people looking for walking holidays and short breaks in Britain was up 18 per cent.

Harry Kyrillou, a director of travel agent Planet Holidays, said bookings for this quarter were down by 10 per cent compared with last year.

He said: "I think business has slowed down due to the fact there is a lot of economic uncertainty and that is worrying people. A lot of people don't know if they will have a job in three months' time and holidays are the first to go."

Countries that use the euro would be worst-hit. He said: "We are at a great disadvantage because of the devaluation of sterling against the euro. There is more demand for Egypt and the US, where people can use American dollars.

"A lot of people are deciding to holiday in the UK who would normally go to Spain or Portugal. If they are going abroad they are leaving it later to book, thinking they will get a bargain, but they may be disappointed."

Bruce Fair, managing director of Kelkoo, said: "The trend for people to holiday at home seems to be driven by the credit crunch and the underlying lack of confidence in consumer spending.

"European countries with the euro are so expensive now - I was in Paris and was charged the equivalent of £8 for a pint of beer - which is bound to put people off."

For those still determined to holiday abroad, the Post Office has named Thailand, South Africa and Egypt as the cheapest overseas destinations this year. Its holiday costs barometer, based on the price of holiday essentials overseas, also found the US was cheaper than many European destinations, with a bottle of Coca-Cola costing £1.60 in Florida, compared with £2.94 in France. In Spain, renting a car costs £58.87 a day, while in Florida it is £28.06.

Sian Branchley, spokeswoman for Visit Britain, said: "The feedback we have been getting is people are taking another look at holidaying at home because of the current financial climate. We have destinations that rival overseas."

She said more people were visiting Liverpool and the North-West this year, while seaside towns such as Whitstable and Southport were also doing well.