New research predicts that UK holidaymakers’ spending on overseas holidays is to increase between 3% and 4% a year, taking the total from £23.8 billion in 2007 to £27.3 billion by 2011.

However the research, by business-to-business data firm Market and Business Development, also predicts that spending on  overseas package holidays will fall this year.

Market and Business Development expects package holiday sales to reduce by £100,000 to 10.1 billion in 2007, making up only 42% of overall sales.

By 2011, package holiday sales will peak at £10.8 billion. However, the package sector’s overall percentage of the market will reduce to 39% of sales.

Overall spend on overseas holidays increased by 24% to £23 billion from 2002 to 2006.