As one firm starts offering holidays from £100, independent travellers look further afield for best destinations

THE HOLIDAY price war intensified yesterday as Britain's largest tour operator slashed its prices, offering packages for £100.

THE HOLIDAY price war intensified yesterday as Britain's largest tour operator slashed its prices, offering packages for £100.

Thomson Holidays, which is suffering diminished profits and disappointing millennium sales, launched its range of no frills holidays called "Just". The budget brand offers customers the "real essentials" of a flight and hotel room. "Unnecessary extras" such as food on the flight, transfers from airport to resort, and tour guides must be paid for on top of the package.

"It's a reduced holiday package, but not an inferior one," said Shaun Powell, deputy managing director of Thomson. "It's for people who only want the bare essentials - just a flight, just a room, just a beach."

The concept was inspired by the success of easyJet and British Airway's carrier, Go, which offer basic flights without food or in-flight entertainment. But Jeremy Skidmore, editor of Travel Weekly, said yesterday he doubted the concept would work for holidays. "You're going to end up paying extra for just about everything except flight and hotel room," he said.

"You may not realise it, but you get an awful lot for your money when you buy a package holiday. If people think they are getting an all-in package holiday with 'Just' they are sorely mistaken. This is not a package holiday as we know it."

Mr Skidmore emphasised that flight supplements mean what may appear like a £100 holiday could end up costing double. "If you fly from airports in Scotland or Northern Ireland on a Friday, Saturday or Sunday between 5am and 7pm you have to pay a £80 supplement. That's a sizeable increase on what looks like a very cheap holiday."

Should the "Just" holidays prove successful, he said they were still not a solution to Thomson's present problems. The company has issued two profit warnings in two months following a dire half-year performance which led the City to revise its year-end profit forecast from £110m to £85m.Keith Betton, head of corporate affairs at the Association of British Travel Agents , said the new brand signalled a return to the price wars of last decade.

"One of the problems in the 1980s was that there were very cheap holidays, but they were not backed up with quality," he said.

The millennium is not proving to be the goldmine that travel companies had hoped. "Demand for short-haul destinations has not lived up to expectation," Mr Betton said. "All the travel companies are trying to build in a bit of extra profit, but in reality the demand does not really justify it."

After an initial rush for Thomson's millennium packages, which were launched 14 months ago, interest died down. "The millennium holidays sold exceptionally well initially," he said. "Then there was so much hype that the vast majority of people thought there was nothing left. We need to get people to realise that they can still go."

t Most adults in Britain are still undecided as to whether they will do something special to mark the dawn of the new millennium, according to a survey published yesterday.

Only one in 10 of the 1,000 adults polled by NOP said they intended to visit either a pub, club, restaurant, show, or take a holiday.