Bookings at Saga Group’s tour operations are 20% down due to the impact of coronavirus, the over-50s travel and services specialist revealed today.
The company also reported a “higher level” of cancellations for cruises due to the virus outbreak.
Saga said in a trading update: “Our tour operations businesses have experienced an increase in cancellations and suppressed demand in line with the industry.
More: Latest coronavirus news and updates
“Forward passenger bookings for 2020-21 were down around 20% versus the prior year, with a more significant impact in recent weeks.
“However, given our relatively low level of cost commitments and lower exposure to northern Europe and Far East destinations we are able to react to changes in demand and flex elements of our cost base for the remainder of the year.”
The company added: “For our cruise business, bookings until recently have been very strong, with forward sales for the current year of 80% of the full year revenue target as of 29 February.
“The remaining 20% of our full year revenue target is weighted towards Q3 and Q4 2020 cruises.
“While we have seen a higher level of cancellations for departures in the near-term and more generally a lower level of bookings for departures further out, our two most recent departures had load factors of around 80%.
“The cruise business continues to only depart and return to UK ports and we have flexibility on destinations visited.”
However, Saga admitted that the impact of coronavirus on full year profits “cannot be predicted with any certainty” at the moment.
“While our travel business will be impacted, the group expects the performance and cash generation of the Insurance business to be largely unaffected,” the company added.
“There are a range of actions the group can take to mitigate against weaker trading in the travel business, such as the cost efficiency actions already underway and announced in the recent trading statement.”
Saga said it was “closely monitoring” the evolving coronavirus situation “and our focus is to ensure customers, guests and colleagues are safe and reassured in all circumstances.
“We have taken significant steps to safeguard everyone and will continue to do so throughout this time.”
A full update is due to be issued with financial results for the year to January on April 2.
Saga reiterated that underlying pre-tax profit is expected to be “in line with expectations”.
Facebook Live: Coronavirus Q&A
Coronavirus Q&A with Abta, Travlaw and Kuoni
Posted by Travel Weekly UK on Wednesday, March 4, 2020