AS FUEL prices drop below a dollar a litre for the first time in three years, the great Australian driving holiday is back for thousands of families.

Motoring experts predict the busiest Christmas on record in classic NSW holiday destinations.

The traditional motoring holiday, which may have been out of reach in the middle of the year when petrol prices peaked at $1.60 per litre, has become the affordable alternative for many families this Christmas.

NRMA president Wendy Machin said the annual migration of holidaymakers this Christmas will grow due to an unwillingness to travel overseas during the global financial crisis.

Ms Machin said the drop in the Australian dollar and unrest internationally means "most people aren't planning on travelling too far this Christmas".

"The drop in the price of petrol means the driving holiday which probably wasn't on the agenda a month ago is now affordable."

A survey commissioned by travel website Expedia revealed that 50 per cent of Australians would take a break over summer, with 75 per cent of them travelling domestically.

The expected increase in travellers will boost NSW's $23.5billion tourism market.