A travel industry body has suggested British people could be banned from going on package holidays due to false sickness claims.

The Association of British Travel Agents (ABTA) say since 2013, there has been more than a 500% increase in the number of compensation claims for holiday sickness.

However during the same period, reported sickness levels in resorts have remained stable.

ABTA say the problem is only associated with UK holidaymakers.

"Evidence suggests many of these claims may be exaggerated or fraudulent", it says.

"Some unscrupulous Claims Management Companies (CMCs) have been witnessed encouraging holidaymakers to submit fraudulent or exaggerated claims and coaching people on what to say to make a claim.

"This is similar to what they did around whiplash claims, which caused car insurance premiums to rocket.

"The CMCs take a cut of any award made and the firms of solicitors they work with also add their legal fees, further driving up the costs of claims," ABTA explains.

An information board in Terminal 5 of London's Heathrow Airport | Image: Steve Parsons/PA Archive/PA Images

It says the cost to tour operators, insurance companies and overseas hotels is substantial.

A hotel association in Mallorca recently revealed the cost to their members alone was stg£42m (€47.8m) last year.

While hoteliers in Spain and Turkey have said they may have to stop offering all-inclusive package to British tourists because of the financial impact fake claims are having.

There can also be severe financial consequences.

A Greek hotel is currently pursuing a counter-claim for stg£170,000 (€193,682) against a British couple, where they say have evidence which proves the couple have submitted a fraudulent claim.

"Tour operators and hotels are increasingly aware of the tell-tale signs of fraudulent or exaggerated claims and are taking steps to challenge and defend these claims", ABTA adds.