Dynamic packaging will suffer in popularity next year as a result of the deaths of two children in Corfu and ongoing legal issues surrounding it.

That’s the prediction of Federation of Tour Operators director general Andy Cooper, who said 2007 will see travel agents retreat from the previously growing trend as confusion continues following the Court of Appeal’s ruling on dynamic packaging in November.

He said: “We’re getting the first suggestions that dynamic packaging isn’t all it’s cracked up to be.”

However, south west England travel agency group Swifta federation chairman Nigel Pothecary said the number of dynamically packaged bookings would continue to increase. But he admitted: “Agents aren’t terribly confident about it.”

Scottish Passenger Agents Association president Sandy MacPherson agreed dynamic packaging would continue to grow, although he added this was mainly due to market forces.

He said: “More and more agents are realising if they’re going to grow their business then they can no longer just be holiday shops selling packages.”

Association of Independent Tour Operators chairman Derek Moore agreed that only travel agents prepared to dynamically package would survive although he also predicted a growth in the number of unbonded travellers.

He warned the trade to expect further increases in Air Passenger Duty, adding: “It is so easy for Gordon Brown to do and it fits in with the green consensus.”

MacPherson added Scottish Parliamentary elections in May will slow sales north of the border and added the Scottish National Party could cause problems if it wins due to its commitment to full devolution. However, he added recent nasty weather in Scotland should drive January sales.

Cooper added Spain could do well next year if customers continue to seek out destinations viewed as safe and secure, adding: “Global events like terrorism and crises will continue to drive the success of destinations.”

Moore said Cape Verde will be the “new Canaries” thanks to Thomson’s decision to launch a summer 2007 programme while Colombia will become a hot spot. Pothecary said Italy would have a good year, particularly as couples are increasingly appreciating its romantic credentials.