Britons shun millennium holiday deals

Travel trouble: Tour firms slash prices on New Year packages as everyone want to stay home for turn of the century

AS ONE AND A HALF million British travellers leave the country for the last bank holiday weekend before Christmas, plans by Britain's travel industry to cash in on the millennium are in disarray.

Some holiday companies are reporting dismal bookings and falling prices. A Scottish hotel that two years ago announced a three-night package for over pounds 8,000 has been obliged to shave one-third off the price. And while British Airways is boasting of reservations that are 50 per cent higher than usual, its partner Qantas has cut fares for travel to Australia in December by a quarter.

One tour operator reports overseas sales for the end of 1999 running at less than half the levels for the last New Year. "The initial hype about crazy prices has frightened off much of the travelling public," said John Bennett of the North American specialist Ski Independence. "While the rest of the winter is 24 per cent up on last year, over the millennium our bookings are down 50 per cent or more. People simply won't pay the prices airlines and hotels are demanding."

Bookings for traditional Christmas and New Year destinations, such as Florida and the Caribbean, are strong, but locations that have set themselves up as party venues are far from full. "In Rio, hotel rates are 10 or 15 times the normal levels. Combined with air fares around pounds 300 higher than the usual Christmas peak, bookings are sluggish," said Andre de Mendonca of South American Experience.

Discount travel agents are reporting the first signs of panic among airlines that they may not fill all their seats at a time when profits are usually maximised. Qantas this week cut the fare for flights in December between the UK and the main Australian cities by 25 per cent.

Early bookers who paid more than pounds 1,700 for a return flight from London to Sydney are likely to find themselves sitting next to passengers who have paid less than pounds 1,300.

They could also find themselves flying on a BA aircraft, even though BA claims its bookings are running at 50 per cent more than usual. A survey carried out by The Independent of 20 airlines found passenger increases of between zero and 6 per cent were the norm. One long-haul travel agent said: "The crucial time is approaching. A few airlines are starting to free up seats at lower fares, which looks like the first sign of panic."

Closer to home, a four-night break in Bruges offered by the Yorkshire-based operator Ferrysavers has not been selling well, despite being priced at below pounds 300. David Barber, the company's marketing manager, said: "The take-up hasn't been particularly good for the millennium period."

At the Balmoral hotel in Edinburgh, the price of hogmanay packages has been cut from pounds 8,500 to pounds 5,700. A spokeswoman for the hotel, which is offering three-night stays in the Scottish capital over the New Year, said reservations staff have been "inundated" with inquiries, but only one-third of available rooms have been booked.

Airlines are having to offer large inducements to persuade staff to keep planes flying; BA is giving staff who work thatnight four free tickets to anywhere in the world.

Travellers are also being deterred by uncertainty over the effects of the millennium bug. Holiday companies have inserted a standard exclusion clause in brochures disclaiming any responsibility for problems that might occur. Anxieties are likely to be heightened within the next two weeks: the International Air Transport Association is to circulate members with the results of its survey into the readiness of airports and air traffic control, but aims to keep the information from the travelling public.

"The millennium is going to be about as exciting as the eclipse," said John Bennett. of Ski Independence. "If I were a customer, I'd sit tight and be ready to pick up the bargains."