Thousands of holidaymakers across Europe have been forced to cancel or rearrange holidays planned for the immediate future due to air travel restrictions caused by the volcanic ash cloud.

Leading budget accommodation website budgetplaces.com has re-booked or cancelled more than a thousand hotel and apartment reservations since airspace was restricted last week. The company has also taken a raft of last minute enquires from tourists still unable to return home, with Barcelona, London and Madrid seeing as much as a 200 per cent increase in same day bookings.

For those unable to make their holiday, the firm is cancelling or rearranging bookings free of charge, a policy that applies to all trips due to take place before June 2, 2010.

“Even though restrictions have been lifted across much of Europe, the challenge remains of getting the long haul passengers home, many of whom still have no idea when they will be able to travel. We’re finding that many people who have not left their home country yet are looking to make alternative arrangements for their time off work,” said John Erceg, founder and managing director of budgetplaces.com.

“Holiday time is precious, so it’s no wonder travellers are making a proactive decision to perhaps look closer to home. Our aim is to make this as easy as possible by waiving any cancellation fees that may apply.”