Since September 11, staff at the Stratford Tourist Information Centre have seen a 20% slump in visitors coming through their door.

This reflects a national downturn in numbers of overseas visitors of between 20 and 25%.

Given that it is the US market that has been most acutely affected, and that one out of every three overseas tourists to Stratford is American, it is clear that the slump is going to hit the town's tourist industry hard.

So it is perhaps surprising that Alex Holmes, director of South Warwickshire Tourism (SWT), remains so upbeat about future business.

"This coming year is going to be difficult but we are going to be in a better position than most areas to compete for business," said Mr Holmes.

His confidence lies in the prospects for the domestic tourist market, which he predicts will show signs of healthy growth next year, as people think twice about flying to places such as Florida in favour of experiencing some home-grown heritage.

"Four out of five visitors are domestic visitors. Some of them are coming for the day but it's important to our restaurants and shops," said Mr Holmes.

With £46billion a year being spent by Brits on holidays abroad, it would only take 1% to change their mind and holiday at home for £46million to be redirected back into the UK economy. For Stratford district, which in 1997 earned £135million from 3.8million visitors and has a tourist industry employing 7,500 people - 17% of the labour force, getting a slice of that action is vital.

It is for that reason that Mr Holmes and his colleagues are looking to expand marketing activities and are in discussion with Stratford District Council, which along with Warwick District Council provides 44% of the tourism authority's funding, to stump up some extra money.

In addition, SWT will be looking at ways of boosting the already-flourishing short break market, which has grown in the past five years.

But the emphasis on domestic tourism does not mean that the tourist trade is neglecting the potentially-lucrative overseas market.

"No-one can afford to take their foot off the pedal in terms of the overseas market. We have seen these blips before with the Gulf War but they will come back," said Mr Holmes, whose team will be flying the flag for Stratford at the annual round of travel trade fairs in the States early next year.

Over in the Cotswolds the tourist industry was dealt an early blow with the cancellation of the Cheltenham Gold Cup race meeting, due to foot and mouth, which robbed the area of thousands of visitors.

Since then the season has been a struggle for many hotels and visitor attractions.

Tourism managers say the impact of foot and mouth and the terrorist attacks have contributed to a fall of about 20% in hotel bookings in the area, although Gloucestershire Tourism's Chris Dee said: "The cheese awards were helpful for Stow."

The Cotswold Farm Park, which has seen a 30% fall in visitors, is among the worst hit attractions as many of its animals were not on show for much of the year because of foot and mouth. "We are just hoping that next year will be a bonanza," said manager Adam Henson.

One bright spot was the fine autumn weather, which did encourage some new autumn visitors.

In Evesham, tourism chiefs say that although Evesham does not rely on overseas visitors to the same extent as Stratford and the Cotswolds, world events were having an affect

John Stych, an Evesham trader and chairman of the Vale of Evesham Tourism Association, said: "If we are realistic, the year has not been as good as last year," he said.

"We are getting a lot of visitors from the Midlands and it is noticeable that they are coming for the day," he said.

"I think the fear of flying is going to be to our benefit because a small town like Evesham does not rely so heavily on foreign visitors and so hopefully we are not going to be hit as dramatically as some others."

Christmas is normally a time when traders get a smile on their faces, but Mr Stych is cautious about this year. "Because of the international happenings, I don't think I can recall a more uncertain Christmas in the 10 years I have been here," he said.