On a global scale, travel and tourism continues to be a growth market.

The UK is ranked as the world's fifth largest travel and tourism economy and is expected to grow by 5.1% in 2005, an increase on the 4% growth in 2004.

A record number of overseas visitors - 27.54m - came to Britain in 2004, surpassing the levels reached in 2000 despite terrorism fears and a strong pound. A number of factors are fuelling this growth, including the ease of internet booking, the emergence of low-cost carriers in Europe, more visitors from EU accession countries, and the continuing appeal of London as a global highlight.

In recent years, three market developments have contributed to the sustained growth of tourism in spite of adverse international and domestic events.

These are the growing popularity of the short break, the continuing strength of the business market, and the inexorable rise of the budget hotel.

For Europeans, the answer in 2005 is just as likely to be Prague, Pisa, Ljubljana or Liverpool as it is to be 'my parent's for Sunday lunch'.

The short break is a product developed by the hotel industry two decades ago to shore up occupancy between Friday and Sunday when business travellers return home. The hotel industry, which had invested in leisure facilities largely as a differentiator to attract business customers, found that the gyms, swimming pools and spas that it had built could be used to entice visitors to spend the weekend. Hotel marketing has, therefore, been focused on packaging attractive deals that promote local attractions to encourage the weekend visitor.

In recent years, the opportunities for travellers to take short breaks have been considerably enhanced by the growth of the budget airlines and the increasing use of the internet to book hotels and flights - online hotel spend was estimated at over $10bn (£5.5bn) in 2003. Consumers have been empowered by the transparency of the information available on the internet to drive a hard bargain and now believe that low prices are a right rather than a privilege.

As a result, the balance of power has shifted from the airlines and hotels to the consumer who can research the best deals available without ever picking up a telephone or setting foot in a travel agent's. This may explain why the average spend per visit has been declining over the years even though inbound visitor numbers continue to increase.

Clearly, the short breaks offer works best in the 'must see' destinations like London, Scotland and Wales and, increasingly, the secondary cities served by the low-cost carriers such as Liverpool, Bristol, Nottingham and Newcastle.

In spite of the new technologies for video-conferencing, web seminars and conference calling, the evidence from the business tourism industry is that nothing beats doing business, building relationships and networking face-to-face.

The number of corporate events rose by 21%, according to a Meetings Industry Association UK conference market survey last year, as companies increasingly seek to motivate their staff by taking them off-site for training sessions, sales conferences and staff meetings.

The conference market was worth an estimated £7.7bn in direct spend to venues in 2003, almost 60% of which were hotels. On top of this is the individual delegates' expenditure on drinks at the bar, meals in town and visits to local attractions.

Business class hotels also performed strongly on the back of corporate travel in 2004 with average achieved room rate (AARR) rising by 7.7% to £93.80 while boosting occupancy by 2.5% and yield by 11.1% to £73.68.

The third phenomenon driving tourism growth in the UK is the rise of the budget hotel, which is now worth about £3.25bn and accounts for just under 15% of the UK hotels market. The leading players among the 18 brands (offering more than 69,000 rooms in 1,066 hotels) are Whitbread's Premier Travel Inn, Permira's Travelodge, InterContinental's Express by Holiday Inn, and Accor's Ibis.

In 2004, the smaller budget hotel chains improved their yield by 13% and their AARR by 7.6%. The combination of convenient location, good quality and excellent value for money is helping to attract new entrants to the hotel market as well as encouraging business travellers to switch from traditional mid-market hotels.

The strong performance of this sector is all the more impressive given that the main players have hoisted their flags in many locations around London in recent years instead of the more typical motorway service areas or other high-traffic locations.

The aggressive promotion of London as a domestic destination and the arrival of budget-conscious travellers from Europe brought over by the low-cost airlines are all helping to build a growing market for this industry segment.

The impact of the UK travel and tourism industry on the British economy is huge and steadily growing - although the World Travel &Tourism Council (WTTC) forecasts sluggish growth of 3.3% in the period 2006 to 2015. This year, the industry is expected to generate £184.9bn of economic activity (10.1% of GDP), and this figure is forecast to rise to £321.9bn by 2015.

Revenue generated by overseas visitors is expected to reach £34.9bn in 2005, which is 11.5% of total UK exports.

In terms of employment, the UK travel and tourism industry is expected to produce 19,440 new jobs in 2005 to bring the total to 1,075,860 jobs, or 3.5% of total employment.

While the picture painted so far is one of healthy growth and underlying strength, there is no room for complacency. There is also growth in outbound travel and tourism, which has increased annually by 5.5% for the past four years. The British are taking full advantage of low-cost travel and the strong pound to travel further and more frequently. Unlike the overseas visitors to the UK, who are spending less, the British abroad are spending more, pushing the UK travel deficit to £17.3bn by the end of 2004.

Now that European destinations are opened up throughout the enlarged European Community, EasyJet announces that it has carried its 100 millionth passenger, and a flight to Venice on Ryan Air costs less than a couple of rounds in your local. What would you rather be doing this weekend?

Robert Barnard is partner for hotel consultancy services at PKF.