The biggest issues currently facing the trade are volatile fuel price and foreign currency markets, according to TUI Travel chief executive Peter Long.

Long was speaking at the Institute of Travel and Tourism’s Odyssey Supper at the House of Commons last night where he was presented with his second ITT Odyssey award. He is the only person in the industry to receive the award twice.

He said: “Consumer demand is nowhere near as big an issue as volatility of fuel prices and now what we are seeing for foreign exchange.”

The recent increases in the cost of fuel were “scary” and of far greater concern than any drop in consumer demand for holidays because of the economic downturn, admitted Long.

He added: “We saw soaring fuel prices go to a level I had never thought I would see. When we were looking at fuel at $150 a barrel the banks were saying it might get to $250 barrel.”

Long said the group was now taking a “cautious view” of the market but was confident consumers would choose trusted and long-standing brands to go on holiday with next year. He added the industry should exploit this opportunity to win back market share from the no-frills airlines.

Meanwhile, Long added that the collapse of XL Leisure Group had exposed the “fundamental flaw” of the industry’s financial protection system, in which all consumers assume they are protected even when they are not. “It shows the flaw we have got in our bonding system. We have got to do something about it,” he said.

He is to meet transport secretary Geoff Hoon next week. “I am seeing Geoff Hoon with a view to getting a reaction on what they [the government] might do. I think it’s completely unacceptable that some passengers on the same flight are protected and some are not.”