Overseas property looking good

Property investors who depend on rental returns from tourists for income will be buoyed by new estimates on the outlook of the holiday industry for 2008.

The rising cost of travel is not putting off UK citizens from booking their trips abroad. Bookings and currency sales show 2008 could be an even better year than 2007, according to the travel industry.

And the current slide of sterling against the euro is prompting more interest in long-haul destinations.

The number of holiday bookings over the first three months of 2008 is up 40% on the same period last year according to one travel search engine, Multicom.

'Years ago, holidays abroad were seen as a luxury for the few who could afford them. Now it seems they are being seen as more and more essential,' said Chris Nourse, general manager of Multicom.

Mr Nourse added that while the travel industry may experience some difficulty as consumers face further financial constraints, it is much less vulnerable than some other sectors in the economy.

According to travel firm Thomas Cook, the British public feels the need to take holidays in order to enjoy some respite from their busy lives.

The weakening pound may lead to many people choosing to visit long-haul destinations this year, analysts have suggested. According to the Post Office this has prompted more interest in holiday destinations where people's money could go further, many of which are outside the eurozone.

Dubai was highlighted as one good-value destination for British travellers, although it also flagged up Turkey as an option for short-haul holidaymakers.

Commenting on recent economic developments, the Post Office's Helen Warburton said currency sales in the last few weeks show that people are still determined to go abroad. 'People want to hang on to their holidays, despite the credit squeeze,' she said.

Ms Warburton added that currency sales went up by 20% last month, which she said shows that holidays 'remain a firm priority' for Britons.

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