I have a Californian friend who always books his holidays where the best deals are. There's nothing unusual about that. Except that the lowest-priced holidays tend to be to places the most people least want to go. It's a bit like the stuff left in the bargain bin in funny sizes and colours in the January sales. It suits the minority magnificently - but not the masses.

So when the Gulf war broke out in 1991, Mr California booked a Club Med ski holiday to France (to the astonishment of his facelifted friends). He is an accident and emergency surgeon, so he is well used to drama and more daring than the average American traveller. He claims his plane was practically empty and that the week-long break cost him $500 (about £331), including return flights, ski passes and all his food and drink.

It probably seems odd to think that Americans were fearful of holidaying in France when the fighting was a long distance away, but if you remember, one of the main reasons people boycotted flying at that time was fear of Saddam Hussein planting bombs on planes.

Europe is still suffering from American travellers' post-11 September nerves. You can actually get a room at hotels that are favourites with Uncle Sam's citizens, such as the Hotel Splendido in Portofino, the Villa San Michele in Florence, or even the Cipriani in Venice. This is normally unheard of at this time of year, and it is because the Americans are still not travelling in full force. Add the threat of a new war against Iraq, and things are going to get even quieter.

Already the travel business is getting jittery about possible military action by the US and Britain. British travellers are booking their winter sun holidays later than usual (a habit acquired post-11 September) which means that tour operators are discounting to encourage us to get going. If you are thinking of booking a bit of sun anywhere within Scud missile range of Iraq such as Egypt, Cyprus or Turkey now, you are likely to get a cheap deal.

Thomas Cook has predicted that an Iraq war could have an even worse effect on the travel industry than the Gulf war (which also means it will be pretty dire for you and me). A lot of holiday companies may go bust, leaving people stranded abroad, struggling to find alternative transport home and having to make lengthy claims for reimbursement of the extra cost. People booked with scheduled airlines could lose their money altogether if they lack travel insurance or didn't pay by credit card.

The Gulf war saw one of the biggest travel-company collapses in history. ILG went down, taking with it a scheduled airline and big brands, including Intasun and the former Club 18-30, though this has since been resurrected.

The Association of British Travel Agents plans to hold its annual congress in Cairo next month, and some members have been slow to sign up because they are worried about the safety of the venue! If they won't travel to the Middle East, how can they possibly expect punters to? Which is why this event must go ahead.