Exotic and expensive locations in demand

Holiday companies have seen an increase in demand since the windfall money started to flood into the economy with travel agencies detecting a trend to more exotic, expensive locations, writes Nigel Cope.

Airtours, Britain's second-largest tour operator, said bookings for August holidays had been strong even though the company had increased prices by pounds 20 across the board.

Tim Byrne, deputy group finance director, said: "We've also seen a very high pick-up in summer 1998 bookings, though whether we can link that to the windfalls, I don't know."

Long-haul holidays, to the Caribbean in particular, were selling well. "People are trading up," he added.

Official figures show the price of package holidays increased 5 per cent overall in June. First Choice confirmed a strong level of bookings but was more cautious about the windfall factor. "Many had pre-booked anyway so it is difficult to judge the windfall impact. But we are seeing people who've had a summer holiday asking themselves whether to take a winter holiday as well," the company said.

Separately, it seems there is a surprise beneficiary of the Woolwich and Halifax factor - dentists. Mr Byrne says a dentist friend is snowed under with patients looking for bridgework to be done.

"They tell him it's not the sort of thing they could normally spend that amount on. But as it is `money for nothing' they are booking themselves in."