A continuing downturn in the number of Americans travelling to Europe is forcing many hotels and villas to drop their prices to encourage Brits to fill empty beds.

Tour operators say bookings from the US have fallen even more sharply than immediately after 9/11.

'I think the effect is to do with the war in Iraq and its inconclusive end. When the previous Gulf War started bookings dried up but they kicked off again when it was over because it was a war with an end, unlike what we are seeing now,' said John McNeill, managing director of Kirker Holidays.

'In France, many of the high quality, small chateaux and farmhouse hotels in Provence and the Cote d'Azur are feeling the pinch and are now chasing the British market.'

A spokeswoman for Active Hotels said: 'Prices are being forced down, particularly in Paris and the Riviera.' The company is offering rooms at the Hostellerie du Vallon de Valrugues, Bouches du Rhône, for £67pp per night, 80 per cent off the standard rate, until the end of October.

'Hotels this year have been deserted by Americans to a large extent, it seems to be the smarter hotels which are most affected, and quite likely to do deals as a result,' said a spokeswoman from River Running Holidays.

Leisure Direction, which sells villas and hotels throughout Europe, is offering second or third nights free in many Paris hotels. Peter Horrocks, director of The Villa Company, which rents European villas, predicted next summer's prices would continue to be affected. Meon Villas, for example, has dropped all its French properties for 2006.

Kirker (0870 112 3333; kirkerholidays.com)
Active Hotels (0870 240 7060; activereservations.com)
River Running Holidays (00 33 555 281716; riverrunning.net
Leisure Direction (0870 442 8955; leisuredirection.co.uk)
The Villa Company (01756 770100)