Our guide to a year of great holidays

Don't let the puny pound and faltering economy ruin your plans. Whether it's a bargain-priced sunshine break in the Med or the luxury of a flat-bed flight to Sydney, there's never been a better time to book, says Simon Calder.

Are these the best of times or the worst of times? In travel, it depends whether you are a buyer or a seller. Much of the tourist industry is facing a toxic combination of collapsing consumer confidence, slumping sterling and global turmoil. A perfect storm? No, a perfect holiday, at least for travellers with a bit of cash to spend and a backpack of aspirations to fulfil.

Never have conditions coalesced to produce such an ideal time for days and nights to remember, whether on the Sussex coast, under canvas in Africa or in dreaming your way in flat-bed luxury to Sydney. This year is likely to be the most rewarding ever in terms of choice, price and experiences; from next year, things can only get worse.

For evidence of the opportunities, look no further than last Saturday's edition of The Independent Traveller. Not the editorial (you will judge whether or not we made it informative and inspiring), but the ads.

"See the real Seychelles from just £899." Don't mind if I do; return flights, private transfers and five nights in this seductive tropical archipelago are yours for the price of a new sofa or plasma TV. And we're only at page five. By the time you have scoured the remaining few dozen pages, you will feel spoilt for choice between crossing the Channel to Dunkirk for under £10 per person return for a car and four occupants, and flying to the far side of the world in a Jumbo with 400 other occupants for £600 return.

You would be forgiven, if you read the travel news story in one story in a Sunday newspaper, for thinking that our addiction with adventure abroad is at an end: "Last-minute holiday deals will disappear over the next two years as travel companies cut almost one in every five of the flights and holidays they sell."

Happily, predictions of the imminent demise of holiday bargains are premature. Certainly, the price of a traditional Mediterranean holiday is likely to rise significantly this summer because the big tour operators are offering a couple of million fewer packages than last year. But Thomson and Thomas Cook cannot control the activities of the no-frills airlines: easyJet and Ryanair continue to receive a couple of new aircraft from Airbus and Boeing respectively every month, and the planes are likely to be deployed on sunshine routes. And the Irish national carrier, Aer Lingus, is branching out from its home turf this summer by setting up a new base at Gatwick serving the Mediterranean.

Meanwhile, the Pigs (the main southern European holiday destinations of Portugal, Italy, Greece and Spain gather in a convenient porcine acronym) are squealing. They have all seen a decline in the traditional package market from the UK, with many Brits heading east towards the cheaper destinations of Egypt and Turkey. And that was before events of recent months turned sterling into the world's new comedy currency.

A good way to avoid exposure to the ridiculously weak state of the pound, and the ridicule of traders across Europe and America, is to holiday at home. Last week, Christopher Rodrigues, chairman of Visit Britain, told The Independent he feared up to 50,000 job losses as domestic tourism slides into recession. Yet everything is pointing towards the best year in a decade or two for UK tourism. The unstoppable rise of budget hotel chains will provide many more low-cost options for exploring Britain's cities, countryside and coastline, and put pressure on other accommodation providers to provide better value.

Faced with losing business to UK B&Bs – not to mention Egyptian hotels on the Sinai peninsula – the average Mediterranean hotelier is unlikely to sit back and say "Oh well, the Brits aren't here but they'll be back in a few years." They will slash rates, even in school summer holidays, to fill their beds. Collectively, the British comprise the second-biggest holiday market in Europe (after Germany), and purveyors of everything from sangria to self-drive cars will have to work hard to win our currency, however puny the pound. Right now, your passport may look about as much use as a 2008 diary, but this will be the year for travelling cheerfully. Here are 10 good reasons why.

1. The best of British

However badly the travel industry suffers in the year ahead, the UK will continue to possess the most dynamic and competitive air travel market in the world. Wherever you're going, Britain is usually the best place to start for maximum value. Even in the downturn, opportunities continue to expand – with Aer Lingus moving in to offer flights from Gatwick to holiday hotspots such as Malaga and Faro.

Long haul, the drastically reduced cost of aviation fuel will work through to provide bargains that we thought had disappeared for ever; we may even see the return of the sub-£500 return flight to Australia, and New York fares for under £200. Even now, if you earn the national minimum wage of £5.73, over a 41-hour working week you will accrue £235 – just what you need for a flight from London to New York and back on KLM, departing next Monday. (And, if you practise austerity tourism, you will also be able to afford to stay there: start by using the subway from the airport into Manhattan, not the JFK bus, and certainly not a taxi.)

2. Go east for snow

Ski resorts across Europe are reporting the best early-season snowfalls for decades; even if it doesn't snow again this winter, the Alps have plenty to see skiers through till Easter. And the Russians are staying away, reducing demand and therefore prices. Go east, and you can benefit from low costs in all senses. Example: any week between now and Valentine's Day, Inghams has a half-board deal to Borovets from Gatwick for £244 – accommodation is allocated on arrival, but will be reasonable quality. The price includes flights, breakfast and dinner; lift passes and so forth will cost more – but with the Bulgarian lev about the most benevolent currency in Europe, a week all in for under £500 looks a reasonable prospect.

3. Cheap rail – by text

Britain's rail network is in better shape than ever – and from March, the full Eurostar service will be restored through the repaired Channel Tunnel to Paris, Brussels and Disneyland. It used to be that the French and Belgians got the very best fares; expect that situation to reverse this year.

Domestically, the UK used to have the most expensive rail services of any country in Europe (and we still hold the prize for the priciest of all – the Heathrow Express). But the slump in sterling means that we are merely mid-table now, in terms of walk-up fares. And for canny advance bookers, Britain offers cheaper rail travel than anywhere west of India.

Riffling through my wallet reveals distressingly few euros or dollars, but plenty of cheap train tickets: London to Lincoln for £10, for example, or the capital to Bath for £9.50.

Investigate my mobile phone, and the deals get even better. Increasingly, train operators are cutting out the high cost of issuing tickets – and doing everything online or by SMS. First ScotRail has sold me a one-way ticket from Inverness to London in March for £19, and almost unbelievably will throw in a bed for the night on the Caledonian Sleeper, plus a nice hot cup of tea in the morning when I wake up at Watford. National Express East Coast has texted me a barcode in return for £9 for a trip from Leeds to London, while that nice Sir Richard Branson is offering one-way London-Manchester tickets for as much as £123.50 or as little as £1 – the latter only if you accept your ticket by SMS to your phone.

On Virgin Trains, and increasingly other train operators, a combination of planning, commitment and everyday technology are the keys to bargains that will amaze the world.

4. Ferry good deals

Last week a ferry company, SpeedFerries, went bust. Yet even though the feeble pound has put paid to "booze-cruising" – because prices in hypermarkets in Calais are now about the same as Tesco in Dover – the surviving ferry operators are offering new routes and new ships. So, will they have to slash fares to fill them? Probably. It's going to be a splendid year on the high seas. Ferry operators are bringing in new ships and new routes – and, with the feeble pound putting paid to "booze-cruising", they will have to offer great fares to entice drivers to get on board.

5. Spend less for more fun

The pound's fall will prove beneficial to practically everyone: the time has come to celebrate austerity tourism. If you choose not to change your holiday spending behaviour, you are likely to have a dismal time – by the time you have made your third visit to the ATM to replenish your dwindling supply of foreign currency, it will not feel like so much of a dream trip.

Luckily, as anyone who went to Europe or the US in the Seventies and Eighties will confirm, it is perfectly possible to enjoy a holiday abroad even when in possession of pounds. Trimming holiday spending abroad has the potential to bestow on you a more enjoyable trip. You will be obliged to seek out the local places to eat and drink, and probably have a lot more fun as a result; travelling on public transport is a better way to meet local people than renting a car or hiring a taxi; and exploring the market for fresh produce is a more enriching experience than going for the tourist menu.

6. Drop the shopping

The slump in sterling should see the end of the holiday as retail frenzy: shopping in chain stores is the opposite of what travel should be about. If you are priced out of Zara in Zaragoza, so much the better: spend your time, not your money, falling in love with the destination, not what it sells.

7. Let your feet do the walking

Humdrum, perhaps, but true: more Brits will choose to walk or cycle rather than drive while on holiday – saving cash, getting fit and benefitting the planet.

8. Flights with frills

If you could not care two euro cents for your carbon footprint, this is also the year for living luxuriously at 37,000 feet. With business travel slumping, airlines and top hotels are having to cut prices to lure leisure travellers. British Airways and Virgin Atlantic will charge you under £1,100 return from London to New York for flat-bed, business-class comfort. And on BA's longest route, to Sydney, you can sleep your way from Heathrow to the harbour bridge for under £3,000 return. Incidentally, anything that enhances diversity amid the Blackberry-clutching travelling executives has to be a good thing.

9. Be bold

If you think things are tough here, try making a living abroad – especially in the tourism industry in one of the countries where political strife made headlines last year. Twelve months ago, Kenya was in disarray following disputed elections. Thousands of holidays were cancelled, even though not a single tourist was harmed in the conflict. This year, the tourist industry is going all out to tempt travellers back in. You can have a week's safari in the Masai Mara, followed by a week of half-board luxury on an Indian Ocean beach, for £1,642 per person with Somak, including scheduled flights. The company says it can offer the best prices in the market because it has contracted in sterling, rather than the more usual (for East Africa) US dollars.

Across in Thailand, the travel industry is desperately seeking to rebuild confidence after a disastrous end to 2008: the closure of the airport by demonstrators. With the upmarket operator Kuoni, prices for a luxury Easter holiday on the lovely island of Phuket are surprisingly low: £813 per person, including scheduled flights from London via Bangkok, private transfers and a "superior family room", including breakfast. All this for barely more than the standard air fare.

To India, competition is up, while demand is down due to the appalling terrorist attacks in Mumbai in November. Don't feel mercenary about planning a trip to a place so recently visited by tragedy; people working in tourism need you more than ever.

10. Be a culture vulture

Try "tactical tourism", making the most of the world with a little creative thinking. For example, don't go to this year's European capitals of culture, Linz in Austria and Vilnius in Lithuania – make your trips, instead, to last year's cultural cities – Liverpool or Stavanger in Norway. You will find the dramatic improvements in those cities' infrastructure along with permanent artistic enhancements – but without the crowds and the inevitable high prices. So, get smart and get packing.

Alexis Ashman hits the streets to find out who's going where this year

"I have actually booked two holidays so far. I'm going to Istanbul to see my family and New York to see some friends and because I love it there. Money is generally a bit tighter, but I'm still going to go on holiday." Melissa Isaac

"I'm going to South Africa for the Lions tour. I haven't been massively affected by the economic downturn, but there are some very good bargain holiday deals on at the moment that I am taking advantage of." Oliver Gregson

"We're going to Italy and we're not hugely worried as it's not going to cost a lot. That said, I'm from Italy and I've lost lots of money through the credit crunch as you can't get as many euros for your sterling as I used to. So my savings are now worth less." Micol Benassi and Yu Su Michi

"I haven't booked my summer holiday, but that's not because of the credit crunch. I just haven't got round to it yet." Vomic Nupshah

"I'm from Scotland, but I have a property in Spain, so I'm not going on a holiday apart from to go out there. On the whole I tend to take lots of long weekends as opposed to one big holiday, but things have become a bit tight." Joyce Stevenson

"Although money is a bit tight at the moment, I do aim to take a holiday, I just haven't got round to booking it yet." Sarah Palmer

"I have actually just booked one to Senegal. I suppose I am personally being a bit cautious, but there are some good deals to be had and I managed to negotiate for a fairly good price." Tony Hanley

"I haven't booked anywhere yet, although I am off to a wedding next year. I just feel that in the current recession, money that may be used for holidays is used with a different priority, for example, saving up for a house." Marie Sripah