More than a million fewer holidays costing under £600 have been sold in the UK this year.

But this isn’t bad news according to Sarah Smalley of GFK Ascent-MI.

“This is positive news for the industry because it means many of the loss-leading sales have been taken out thanks to capacity cuts," she said.

“And in comparison trips costing £800 to £1800 have created £100m more revenue this year”

Smalley also revealed that retail agents are faring better than online players. She said this trend may be down to people wanting the security of talking to someone face to face when discussing a serious outlay of money.

She said: “Aito members should keep in mind that agents are also proving far better at upselling holidays thereby increasing profit margins.

“They are outperforming the market and most operators find it hard to launch new products without them.”

Smalley’s statistics also show that summer 2009 was down 10% but summer 2010 was faring even worse at the moment at 12%, although not as badly as winter holidays.

The family market has been hit the hardest but cruise and all-inclusive have been the winners in the last year.

She added: “These type of holiday allow holidaymakers to budget but also give operators more of the holiday spend.

“All-inclusive trips were 20% of all holidays booked this summer, whereas self catering was down 20% this summer and is so far down 30% on last year’s figures for 2010.”

Smalley expects Tunisia to do very well next year because average selling price is £300 less than Egypt and numbers are already rising. It also falls into the mid-haul bracket which has apparently been very successful this year, especially Turkey.

Other revelations included the demise of the 14-night trip which is being replaced by 8-13 night stays, Kenya is doing well as are a few long haul destinations such as Australia and New Zealand.

Her last words of advice via video to the Aito delegates was that the days of being able to rely on entrepreneurial spirit and getting away with a couple of mistakes on the way are over.