The situation is so grim that the launch of summer 2000 holiday brochures, expected this week, has been postponed because of poor sales this season.
Optimistic forecasts within the travel industry have been confounded by recent events. Demand for holidays in Croatia and the Ionian islands of Greece has fallen sharply because of the conflict in the Balkans. In Turkey, the threats by Kurdish separatist guerrillas against tourists have deterred many holidaymakers.
Further afield, a Foreign Office announcement on Wednesday advising against travel to Jamaica has also hit bookings. The government warning came after demonstrations against increased fuel tax on the Caribbean island spread into violent conflict. Roadblocks were set up on several main highways, including the only link to the airport in the capital, Kingston. The first British Airways flight from the airport since last Sunday touched down at Gatwick yesterday.
As if this wasn't bad enough, Richard Branson's latest enterprise, Virgin Sun, has cut flight-only fares to pounds 99 return to a range of Mediterranean destinations in May. Other operators are offering self-catering deals for as little as pounds 129 for a week. Prices are likely to fall still further in the remaining days before peak season schedules begin next Saturday.
Britain's biggest holiday company, Thomson, is trying to weed out customers hunting last-minute bargains from those who book higher-priced holidays from brochures. The company has begun charging late-bookers a pounds 10 fee for coach transfers between the destination and the resort, and reduced their baggage allowance by 5kg to 15kg. If last summer's pattern is repeated, the move will milk an extra pounds 4m from 400,000 last-minute holidaymakers.
Upmarket operators have also been left with unsold holidays. Simply Tuscany & Umbria, a villa specialist recently taken over by Thomson, has cut prices in half to fill flights and accommodation in Italy during the first half of May.
Thomson is determined not to lose in the battle for market share, even if this means slashing prices still further. It has warned its nearest rival, Airtours, that it will cut holiday prices if necessary.
Airtours, meanwhile is considering a bid for another big tour operator, First Choice. If successful, the resulting company would become the UK's market leader.
t Virgin Trains is cashing in on the total eclipse in south Devon and Cornwall on 11 August. The rail company has more than doubled some rail fares to the South-west for the week of the eclipse. Low-price tickets are being removed from sale, leaving Supersaver fares as the cheapest available. Travellers between Birmingham and Penzance will have to pay an extra pounds 45.Reuse content