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The last 12 months have been particularly difficult for the travel industry, it has been suggested.

Frances Tuke, spokesperson for ABTA - The Travel Association, believes these problems look set to continue, with many companies taking holidays off the market to make sure they do not have to cut costs too much.

"With the economic climate at the moment being so uncertain, 2010 is obviously going to be quite a difficult trading environment," she suggested.

A number of company failures have occurred in recent months, which emphasises the need for people to take out travel insurance.

For example, the collapse of Scottish firm Fly Globespan left many holidaymakers stranded, with only those who either booked a package deal or used credit card likely to see any returns on their money.

Travellers may therefore be exercising caution when they book their holidays this year, making sure they have all the necessary protection in place before parting with any cash.

Ms Tuke believes that as a result of this, travel agents are being forced to scale back so they can remain in business but without making huge losses.

The threat of strike action from British Airways (BA) staff over the festive period also put many travellers' plans in jeopardy, which may have led to some people's confidence in the industry being knocked.

At the time, John Tangney, chairman of the AITO aviation committee, suggested the BA strike plans would have put "literally millions of people into chaos".

Nonetheless, findings from a recent Travelzoo survey found that more than a third (42 per cent) of people plan to travel more in 2010 than they did last year.

Wherever they choose to holiday and whichever company they choose to travel with, people need to make sure they have travel insurance in place to cover all eventualities.

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