Predictions that 2010 will prove to be a better year for the trade are likely to be wrong, warned Hoseasons chief executive Richard Carrick.

“Every day an announcement comes from one of the major overseas operators saying that ‘2009 hasn’t been a bad year’, and that things are ‘going to return to normal in 2010’. Much of this is, at best naive and, at worst, unsubstantiated,” he said.

Some companies that have survived did so by cost cutting and reducing capacity to compensate for margin erosion from discounted late bookings, he said.

Although economic commentators feel a severe recession had been avoided, consumer confidence had been irreversibly affected, Carrick said.

“We are likely to continue to see an increase in unemployment, a reduction in public spending and a rise in tax and interest rates in the next 12 months.

“Many people also have personal debt, and their focus will be to cut back and clear debt, rather than spending more. This means people will travel and spend less. They are also less likely to fly, as costs increase and frustration with air travel continues,” he said.