ONE in six tour operators could disappear if the current economic downturn hitting the UK worsens, a new study has predicted but Britons are still planning to go on holiday this year with the Balearics still tipped as one of the top destinations.

Industry analysts Plimsoll Publishing reports that already around 40% of companies are complaining of declining sales while more than half of the UK's top 1'000 operators are also seeing their margins fall.

With tighter lending procedures it is reckoned about half of these operators running low on ready cash could either fail or find themselves victim to aggressive take overs.

Federation of Tour Operators agreed that certain operators will go out of business because of the forthcoming economic downturn but questioned whether as many as one in six companies would be affected.

The predictions come as two surveys revealed that people are still planning to go on holiday despite the credit crunch.