A package holiday price war is being predicted as companies seek to capitalise on a recovering market in 2010.

Turkey is leading the way as value-conscious travellers seek to avoid eurozone holiday spots, according to the Co-operative Travel

The leading travel retailer reports that bookings across top 20 destinations for next summer have seen a 26% increase in the last three months as the market begins to recover.

Dalaman has seen an increase of 82% and has taken over from Majorca as the number one overseas destination for UK holidaymakers in 2010.

The average price of a package holiday to Dalaman is £516, £79 per person lower than the average break to Majorca (£595), according to the travel agency group.

Retail distribution director Trevor Davis said: “As the holiday sector recovers, the battle for bookers will intensify with companies seeking to increase their market share after a challenging 12 months.

“We’re offering as much as 20% off thousands of holidays or free child places, along with very low deposits of £50 per person to allow people to book early and take advantage of the deals available.”