Saga hit by £61m loss as Covid takes toll on tours and cruises

Travel and insurance firm cut more than a third of its workforce in 2020

Saga, the travel and insurance company for the over-50s, has revealed it made a £61m loss before tax last year after the Covid-19 pandemic prevented it from operating its tours and cruises and forced it to refund customers.

The company cut more than a third (36%) of its workforce during 2020, as it moved to slash costs, while it also raised £150m from shareholders in September.

The group is ready to restart its tours and cruises as soon as government restrictions allow and reported that there is significant pent-up demand from customers who want to travel.

In January, Saga became the first UK travel operator to tell cruise and holiday customers that they must be fully vaccinated to travel with them this summer.

Passengers who want to travel on Saga tours or cruises will be required to show a letter from their GP or their vaccination card to show that they have been inoculated against Covid-19, with two doses if required, at least 14 days before departure. They will also need to take a Covid test at the departure terminal.

Saga Group’s chief executive, Euan Sutherland, said the company had received “great support” for its two-vaccination policy for travel customers.

“Customers want to be comforted and cautious, and have extra peace of mind around tours and cruises,” he said.

“We don’t tend to send a lot of customers away in peak months of July and August, our customers tend to avoid those months, so it gives us a longer window and greater margin of error for the pandemic settling down.”

Asked whether it supported vaccination passports, the company said it would wait to see what the government introduced.

Saga reported pent-up demand among its customers for travel later in the year and said its cruises were 78% booked for this season, while its holidays were 83% booked for this year.

Total cruise bookings at Saga for 2021-22 and 2022-23 have reached £154m so far, compared with £128m at the the same point last year, which Saga says is a 20% improvement.

Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk

Sutherland said the company was retaining high levels of customers, with a majority of cruise-goers opting to receive vouchers rather than a refund, demonstrating their loyalty to the brand.

“Looking ahead, while we are mindful of economic headwinds and the potential ongoing impacts of Covid 19, it is clear that there is significant pent-up demand among our customer base, the vast majority of whom have now been vaccinated and are ready to enjoy post-lockdown freedom,” Sutherland said.

The group has made significant savings in marketing and administrative costs, which have helped it to reduce the rate it is burning through cash to about £6m a month, from closer to £8m.

More favourable debt repayment terms have been renegotiated for two of its newest cruise ships, including one it received in September 2020, to give it more financial flexibility.


Joanna Partridge

The GuardianTramp

Related Content

Article image
Former owner of Saga invests £100m to save company from Covid crisis
Sir Roger de Haan buys up 20% of shares and joins board of over-50s travel and insurance group

Simon Goodley

30, Aug, 2020 @4:10 PM

Article image
Saga requires all cruise passengers to have coronavirus vaccine
Tour operator becomes first in UK to call for customers to be fully inoculated before travel

Gwyn Topham Transport correspondent

20, Jan, 2021 @6:24 PM

Article image
Carnival cruises seeks $6bn funding amid coronavirus fallout
World’s largest cruise operator and owner of Diamond Princess admits sector may never recover from pandemic

Gwyn Topham Transport correspondent

31, Mar, 2020 @5:29 PM

Article image
Carnival cruises posts $3bn quarterly loss due to Covid
Many of its ships were hit by coronavirus in March but the operator says bookings are up for the second half of next year

Gwyn Topham Transport correspondent

15, Sep, 2020 @3:46 PM

Article image
Singapore launches Covid-secure luxury cruises ... to nowhere
City state follows Qantas in offering jaunts with no destination with ships half full and masks mandatory

Jasper Jolly

08, Oct, 2020 @1:55 PM

Article image
P&O Cruises will not set sail again until October owing to coronavirus
Cruise line, part of Carnival group, writes off summer season and apologises to customers waiting for refunds

Gwyn Topham Transport correspondent

02, Jun, 2020 @3:08 PM

Article image
Less than 1% of UK travel insurance policies offer full Covid cover, says Which?
Consumer body rated only two of the 263 policies analysed as ‘complete’

Rupert Jones

14, Jun, 2021 @11:01 PM

Article image
P&O to restart UK cruises this summer - but only for vaccinated passengers
Short-sailings around UK with dining and entertainment to restart but ships will not call at ports

Joanna Partridge

17, Mar, 2021 @6:01 AM

Article image
Cruise firm Carnival UK 'to cut 450 jobs' at Southampton HQ
Owner of P&O and Cunard lines says none of its ships have sailed since March due to coronavirus

Joanna Partridge

12, May, 2020 @4:31 PM

Article image
Cruise firms face 'off-the-scale' challenge in wake of coronavirus
With dozens of fatalities linked to ‘floating Petri dishes’, shares have collapsed – but all may not be lost

Rupert Neate

11, Apr, 2020 @7:00 AM