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Exchange rates 'may wreak havoc'

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Holidaymakers are being warned that the weak pound "may yet wreak havoc" on their short breaks, ski holidays and shopping trips abroad.

The unstable nature of the economy is making it all the more important to get travel insurance as people may no longer be able to make planned trips abroad due to redundancies.

According to a holiday money report, ferry-based holidays may steal market share from flight-inclusive ones, putting luxury bookings under threat.

It also warns that short breaks may be the first to be hit by the downturn, as holidaymakers opt to have just one holiday this year.

The report from Post Office travel services said: "If predictions prove accurate, the short breaks sector could come under serious pressure in the coming year as consumers limit themselves to one major holiday.

"The first test of this is likely to come at Easter, traditionally the start of the holiday season when UK tourists head to European cities."

However, the report has some good news for tourism companies offering all-inclusive packages "where tourists know in advance what their outlay will be".

It suggests that coach tours and camping holidays will also continue to do well despite the changing exchange rates.

© Press Association 2009