Saga reports surge in holiday interest as Covid vaccine rolls out

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Saga, the travel and insurance company for the over-50s, has reported a rise in holiday interest as the first wave of customers who have been vaccinated against Covid-19 look to “travel in great numbers and live life to the full”.

The company said that despite the pandemic, customer retention levels have been high and an average of 69% of cruise guests rebooked rather than asked for a refund.

However, the company said more recently this has jumped to 86%, showing the “pent-up demand for cruises among our guests who will benefit from the first round of vaccine rollout”.

Under the government’s plans, 15 million people designated to be in the four highest priority vaccination groups, including all those in the UK over the age of 70, will have received at least their first shot by the middle of February.

“We are confident in our strategy, the strength of our brand and the loyalty and economic resilience of our customers,” said the Saga chief executive, Euan Sutherland. “We know they are ready to travel in great numbers and live their lives to the full as the vaccine programme is rolled out. Within travel we are focusing on ensuring the safest possible environment for our guests when cruise and holidays resume.”

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Saga, which last week became the first UK tour operator to tell cruise and holiday customers that they must be fully vaccinated to travel with them this summer, said that as of 23 January it had taken £140m in cruise bookings. It has also issued a further £8m of vouchers to customers who are not ready to rebook a specific cruise. This compares with £127m in bookings taken by the end of January last year, prior to the pandemic. The company plans to restart its tour and cruise operations in May, depending on government travel restrictions at the time.

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The company said that it has made significant savings in marketing and administrative costs which means it has reduced its cash burn rate to about £6m a month, from closer to £8m.

Despite the increase in holiday bookings Saga has also opened talks with lenders to increase financial flexibility, given the continuing disruption to the travel industry, as well as seeking to defer another £45m in debt repayments relating to its two cruise ships.

Saga said it had £51m in cash available at the end of last year and net debt stood at £785m, including what is owed on its ships.