By Humphrey Carter UK summer holiday sales have started to lose their momentum as fears of war in Iraq are starting to have effect on the industry. All of the UK's leading tour operators marked the New Year by slashing prices and offering huge benefits to early summer package holiday bookers, but the four leading operators are stating to reduce the number of bargains and gradually restore package prices to brochure rates as demand drops and the market gets increasingly tough. Over the next few weeks, tour operators are expected to decide on whether or not to reduce charter flight capacity for the summer, having postponed the end of January deadline, although MyTravel has already cut capacity by 15 per cent. Tour operators are expected to reduce capacity, bearing in mind that last summer saw them cut capacity by an average of 18 per cent, while increasing holiday prices. While holiday sales were brisk in January and the Association of British Travel Agents (Abta) still maintains that high street business is up on last year, alarm bells started to ring at the FITUR travel fair in Madrid ten days ago. In general, all the Mediterranean destinations are primarily concerned about the consequences of war in Iraq and according to British, Spanish and German tour operators, more and more consumers are delaying making any summer holiday decisions.

In the case of Germany, fear of war and the recession has just about crippled the holiday market, the crunch will come at the ITB Berlin trade fair at the end of the month, while in Britain, it is very much a wait and see situation with 20 per cent more holidays sold last month than in January 2002. The World Tourism Organisation is not very optimistic about this year “we're seeing the start of the most significant recession to have hit the travel industry in the past 20 years, the WTO president said. “There's a growing feeling that there are no longer any safe destinations and if this situation does not change soon, it's going to be particularly tough for holiday destinations,” Francesco Frangiali, has warned. The Spanish tourist board Turespaña is prepared to call a halt to all publicity campaigns if the war in Iraq goes ahead. Turespaña hope that, in the event of war, the conflict will be short lived and that once over, will launch a series of blanket publicity campaigns overseas to revive the market. In the meantime, the Balearic tourist industry, hoteliers etc. are waiting and watching developments, especially the hoteliers, many of which have no intention of re-opening their establishments until there are clear signs that clients are