Saga cruises sails back into the black as passenger numbers soar

Saga cheered an ‘outstanding’ year for its cruise business – but still racked up a £129million loss as troubles at its insurance arm took their toll.

The company, which specialises in insurance and holidays for over-50s, sailed back into the black at its ocean cruise business where profits came in at £36million for 2023, up from the £700,000 loss the year before.

Its river cruise arm unveiled annual profits of £3million, from a £5million loss in 2022.

Saga’s travel business, which includes both the Saga Holidays and Titan brands, saw passenger numbers surge from 47,000 in 2022 to 57,800 last year.

‘Ocean Cruise had an outstanding year and, as a result, we far exceeded our initial earnings targets, while River Cruise and Travel both returned to profit for the first time since the pandemic,’ said chief executive Mike Hazell, the company’s former chief financial officer who took over from Euan Sutherland in November.

On course: Saga, which specialises in insurance and holidays for over-50s, saw profits at its ocean cruise business come in at £36m for 2023

He added: ‘Forward bookings are strong, with all three businesses significantly ahead of the same point in the prior year.’ 

In 2023, tours around the fjords and Scandinavia were a particular sweet spot, while cruises to Greenland were increasingly popular.

But despite bumper demand for cruises and getaways, Saga still clocked up losses of £129million as its insurance arm continues to feel the sting of high inflation, driving up the price of payouts.

Motor insurers are being significantly affected by surging claims due to more expensive repair and labour costs and semiconductor shortages pushing up second-hand car prices.

In addition, they are banned from ‘price walking’ – giving cheaper premiums to new customers while making loyal customers pay more for renewals.

Saga was reportedly in talks to sell its underwriting business last year to Open, an Australian insurer, but failed to get a deal over the line.

But the company recently said that it was ‘exploring opportunities’ as it tries to drive down its debt, which currently stands at £637million.

Last year it tapped chairman Roger De Haan for £35million, adding to the pile of cash it owes him. It said it was looking at a partnership, with an outside firm taking over the running of its cruise operations.

Its two flagship vessels, Spirit of Adventure and Spirit of Discovery, run cruises across the British Isles, the Mediterranean, the Nordics and the Caribbean, with prices ranging from £1,300 to £15,000.

Analysts at Peel Hunt said ‘further strategic action is needed’ to get the company on a ‘firmer financial footing’.