An increasing number of European travel agents say they're beginning to see the start of a pick-up in sales for summer holidays. Tui, Europe's largest tour operator, has announced that its revenues from tourism are expected to increase this year from 14.1bn Euros to 15bn Euros. It said it expected the market to grow by between 3 and 5%. Tui believed sales in its three major markets - the UK, France and Germany - would increase this summer, particularly after the FIFA World Cup, to be held in Germany in June.

Some travel companies are suggesting prices for destinations other than Germany in June might actually be lower than last year - precisely because of the World Cup. Tour operators generally dislike global events such as the Olympics and World Cup because a higher number of people prefer to spend their time at home.

Manny Fontenla-Novoa, the Chief Executive of Thomas Cook, said he believed the Eastern Mediterranean would be his company's holiday hotspot this summer. "Over the past two years, Spain has had a declining number of visitors from the UK. We thought this was to do with Spanish hoteliers putting up their rates, which made Greece and Turkey look cheap by comparison.
"Now the Spanish have dropped their hotel prices, so it's back in favour. Sales of holidays to Majorca are 5 per cent up, for example, so we think Greece is where the bargains will be," he said.

ABTA, the Association of British Travel Agents, announced in April it expected record numbers of travellers to head off to European and worldwide destinations over the Easter break - a record 2.4 million people. That number is substantially ahead of the figure for the same period last year, at 2.2 million passengers.

Overall, however, although the number of people booking traditional package holidays has increased over the last ten years, they make up smaller proportion of the total holiday market. And packages have in fact declined this year for the third year running. Across the board, bookings for packages are down five per cent over the year, though it's believed this figure is more than offset by the number of people who are constructing their own ‘DIY' holidays - buying flights and accommodation separately, particularly in Spain.

A spokesperson for Thomson said, "Spain is doing very well, but that is largely because we are putting more no-frills flights on. You can fly from Gatwick to Alicante for £30, and a lot of people are buying their own accommodation to go with that."

As for the hottest destinations this year - not those with the highest number of visitors, but those with something a little different to offer, ask ABTA and they say: Brazil.

A spokesman said: "A number of major tour operators have put on direct charter flights to Northern Brazil. The country has so much going for it, including a rich and vibrant cultural heritage, amazing beaches, and the biggest rain forests and rivers in the world. Your money will also go far and who knows, you may even get to see the world's best footballers play."