Where there may be lots of holidaymakers affected by it in south-east (8)
I believe the answer is:
campsite
'where there may be lots of holidaymakers' is the definition.
(people might go to a campsite on holiday)
'affected by it in south-east' is the wordplay.
'affected' becomes 'camp' (camp can mean exaggerated or affected).
'by' is a charade indicator (letters next to each other).
'in' is an insertion indicator.
'south east' becomes 'SE' (abbreviation).
'it' put inside 'se' is 'site'.
'camp'+'site'='CAMPSITE'
(Other definitions for campsite that I've seen before include "Location for pitching tents" , "Ground for tents" , "for temporary accommodation" .)