A 14-night break in the Canary Islands was being offered for pounds 139 yesterday by JMC Holidays - a saving of pounds 528. Thomson cut the cost of a Majorcan package by half to pounds 230 for two weeks.
Thomson and rival company Airtours both indicated last month that end- of-year holiday sales had proved sluggish.
Companies have gradually been bringing prices down as a combination of cost and fears of the millennium bug kept end-of-year bookings low. A spokeswoman for the Association of British Travel Agents said: "There has been a lot of discounting on some holidays and this has indicated that some prices for millennium holidays were fixed too high.
"Many short-haul European holidays are still available for last-minute buyers who want to go away over the Christmas and New Year period."
Tour operators are now counting on bookings picking up during next year, with many people planning a special holiday some time during the year to mark the millennium.