Retirees are the most financially secure and the consumers least likely to be affected by the cost of living crisis, according to a new report.

They are the ones most likely to have emerged from the pandemic with savings, so they’ll have cash to splash on holidays.

Crucially, they most probably make up the bulk of the 20% of people who have yet to return to foreign travel since COVID.

This pent up demand could fuel bookings from the older market next year, assuming there isn’t a new virus.

Conversely, younger people and especially those on lower incomes are most likely to be hit by rise in living costs, said PwC Travel Director Eleanor Scott, presenting the firm’s Consumer Outlook report at the ABTA Convention.

She said incomes aren’t rising in line with inflation so we should brace ourselves for the same level of decline that we saw during the financial crisis of the late noughties, but in a shorter period of time, which will make it more painful.

“High income groups are going to be relatively well-insulated, so depending on which segment you serve, your customers are going to feel this very differently,” added Eleanor.

The Consumer Outlook report found that two-thirds of the population were feeling ‘okay’ about the future, but a more recent ABTA survey found that 35% are planning to spend less on holidays due to the cost of living crisis.

“On balance, people in higher income groups are feeling better than low-income groups,” added Eleanor.

Retirees are likely to be less affected by the cost of living crisis due to the savings they’ve accumulated, she said, but added: “One common theme is that everyone is worried about what the cost of living is going to do to their finances.”

She said this consumer sentiment is expected to filter through and be reflected in consumer spend in about six months’ time.

Richard Singer, CEO of Ice Travel Group which owns price comparison sites Icelolly and Travelsupermarket.com said average booking values have already fallen 20% since the start of the year.

During a panel discussion at the Convention, Richard said people were doing more searches, using more filters and playing around with dates and durations to find the best value for money.

“It’s no surprise that Turkey is the fastest growing destination, it’s one of the few places you can get value for money now,” he said.

However, easyJet holidays CEO Garry Wilson said the operator hadn’t seen any evidence that customers are trading down, in fact, he said there was ‘huge’ demand for city break, adding: “You’d think that would be the thing that people would give up.”

When questioned about their future expectations, 53% of delegates attending the ABTA Convention said they think revenues in 2023 to be higher than this year, and 17% said they would be ‘significantly’ higher. A further 18% said they would be about the same, and not a single one expected their revenues to fall.

Furthermore, 68% of delegates said they were confident consumer sentiment will bounce back quickly and, when it does, PwC Head of Travel Rick Jones said agents should be ready as this will rapidly lead to a rise in demand.