Bad news for holiday operators has translated yet again into good news for holidaymakers, as holiday companies scramble to cut prices on a projected 1.5 million holidays left unsold across the industry. Even Tui, the parent company of Thomson and First Choice holidays isn’t immune, announcing last week that it still has 650,000 unsold holidays on its books that it needs to offload before the end of the year.

“Just looking at the packages we have on our site currently, we’re seeing some pretty remarkable reductions,” says Richard Bray of online travel experts Travelmatch. “While industry figures show rough 40 percent price cut across the board, some companies are already selling packages at 75 percent less their original cost. It’s a trend that can only spread throughout the remaining weeks of summer.”

These reductions come just as many analysts were predicting 2010 to be a rallying year for the long-suffering industry. Contributing factors to the cuts are thought to be many, including the World Cup keeping families in the UK, while the volcanic ash cloud and threats of strike action kept many from booking in the first place.

Meanwhile, over a dozen smaller operators, including recent failures Kiss Flights and Goldtrail, have been unable to cope with the backlog of unsold holidays this year, operating so close to the margin on their package holidays to make surviving such periods of industry turmoil impossible. Though with Kiss Flights’ collapse this week, some operators have reported that prices have begun to stabilise and margins improve.

“While it’s a buyers’ market at the moment, the instability in the industry is doing away with many of the operators that helped create these conditions in the first place. That is to say, would-be holidaymakers should book now and snag a deal, because some of the prices we’re seeing at the moment - like £150 for a week in the Mediterranean - won’t last long.”