The growing market in niche holidays should not result in online pay-per-click advertising costs reaching untenable levels, according to a new report.

Speaking today at the launch of the company’s Niche Travel Report, Travelzest chief executive Chris Mottershead said there were growing complaints in the industry that the cost of purchasing generic words like “holiday”, “beach” and “ski” has become so expensive they are no longer financially viable for mass market operators.

However, although the cost of purchasing niche holiday terms may also grow it is unlikely to be such a problem, he said, as they are far more likely to guarantee a sales conversion.

“The fact that people are already searching under these specialist terms means they are have already got an interest in acquiring that holiday and so are more likely to do so,” he said.

Mottershead also predicted that the UK travel market would grow from £34 billion last year to more than £40 billion by 2010, fuelled by the booming property market which has led to increasing numbers of people releasing equity from their homes.

He also forecast that the drop in traditional package holiday sales, which fell 8.9% between 2002 and 2006, would continue.