Over 50s’ firm Saga has revealed that the rollout of the coronavirus vaccine has boosted demand for cruise trips as silver-haired travellers look to “live their lives to the full”.
The group said “pent up” demand for cruises had seen a surge in the proportion of customers choosing to rebook rather than take a refund, jumping from 69% to 86% recently as the vaccine programme ramps up.
Saga has been forced to put its travel operations on ice amid the pandemic, though it still has £140 million of forward bookings under its belt as of January 23 – more than two thirds of the 2021-22 target.
But it said it was in talks with its lenders to secure breathing space on its banking agreements as its travel arm burns around £6 million of cash a month amid the crisis.
The group is also holding separate discussions over further debt deferral and covenant waiver for two cruise ships.
Euan Sutherland, Saga chief executive, said: “We are confident in our strategy, the strength of our brand and the loyalty and economic resilience of our customers.
“We know they are ready to travel in great numbers and live their lives to the full as the vaccine programme is rolled out.”
Last week Saga became the first tour operator to insist that all holiday customers must be fully vaccinated to travel with them this summer.
It is poised to restart its tour and cruise services in May, depending on Government restrictions.
But the travel industry was dealt another blow on Tuesday when vaccines minister Nadhim Zahawi advised Britons not to book a summer holiday yet, with new border controls and quarantine hotels being launched.
In its update, Saga said it still expects to report an underlying pre-tax profit for the full year, with its insurance business helping offset the travel woes.
Saga-branded motor and home policy sales are set to lift by 1% to 1.6 million over the full year, although travel policy sales have slumped by 6% to 1.7 million.
Shares in Saga dropped 5% despite signs of hope for its travel business.
Travel expert Andreas van Embden at Peel Hunt said: “Saga’s older customers are more likely to be vaccinated earlier than the average traveller, and more likely to have lockdown-enforced savings to spend.
“However, while Saga’s travel businesses are ready to restart in May, it seems unlikely that many destinations will be ready to receive travellers this side of the summer, even if Saga has vaccinated travellers ready to go.”