A rise in energy bills and increase in the mortgage interest rate, combined with soaring inflation, have been described as the worst hit to real incomes since records began in 1990.

However, an Abta spokesperson predicted this would not affect spend on holidays. “After two years of severely restricted overseas travel, there is massive pent-up demand for foreign holidays,” they said.

“Although increasing energy costs will undoubtedly put increased pressure on personal finances, when Abta has surveyed customers in the past about discretionary spend they have always told us that when money is restricted, they are much more likely to cut back on activities such as eating out or going to the cinema than their holidays.”

One plus for the industry is that most homes will receive a £150 council tax rebate in April.

Diane Coleman, owner of Tickets Travel in Bexley, said: “I don’t think it will be an issue this year, people have waited too long and want to go away. We had a couple in today that said they had not been anywhere for three or four years.”

Triangle Travel’s Rob Kenton added: “I think in the short term [the disposable income decrease] won’t be a problem for people looking to book holidays until it starts hitting the pay packet and people can see what the actual effect is.”

Agents pointed to confusion over testing requirements as a more immediate concern. Jeanne Lally, joint managing director of Travel Bureau in Gosforth, said: “Changes to testing here have made a difference, but there’s also the testing in-destination issue of which Spain is a good example. Testing rules can be complicated.”

She was unsure about the cost-of-living impact on future sales. “All the economic stats suggest there’s quite a lot of money in people’s accounts because they haven’t been away.”

Lally added business “was there, but not quite where it should be”. She said there no great demand for the coming half-term. “Again, I think there’s a lot of confusion around what is required for children and Spain is probably the one that’s least clear. As soon as things become clearer in destinations, it will come.”

Generally, she said, consumer confidence was returning. Coleman added: “People are spending a lot more. Apart from short breaks in March and April, it’s long-haul and we’ve more enquiries for 10 to 14 nights than seven to 10. Things are definitely starting to pick up.”

However, she also said concerns remained over testing “especially with the changes required with boosters”.

Strong late market hopes ‘smashed apart’

Elsewhere, there are worries the cost-of-living increase will impact later in 2022.

“The problem is if we don’t see [energy] prices come down and wages aren’t keeping up with the increase in inflation,” said Kenton. “Maybe short term they’ve got a bit more money on the hip and people have been looking forward to spending that money, so they will spend it.” 

He said average spend in his five branches in Berkshire and Oxfordshire the week before last “was 45% higher than two years ago”. “For my market, my clients, my demographic, that average spend may come down, but I don’t think they’ll stop travelling.” 

He predicted Spain and France would not relax testing requirements in time for half-term due to rising Covid cases. “There was a chance of a strong late market, but I think that’s been smashed apart.

"The problem is the vaccination disparity for children – and the headlines; people read the headlines and that’s what they take in. You won’t get anything late out of half-term now.”