Saga warns travel business hit by coronavirus-related cancellations and fall in bookings
Over 50s travel and insurance business Saga warned today that coronavirus-inspired cancellations and low demand in its travel arm could hit its full year earnings.
The cruise ship-operator said it had seen a “higher level of cancellations for departures in the near-term and more generally a lower level of bookings for departures further out”.
It said its tour operations business had experienced an “increase in cancellations and suppressed demand in line with the industry”.
Saga said forward passenger bookings for 2020/21 were down around 20 per cent versus the prior year, “with a more significant impact in recent weeks”.
The company said it was unclear what effect the spread of the coronavirus would have on its full year figures at this stage.
“The evolution of Covid-19 and the impact this will have on full year earnings for 2020/21 cannot be predicted with any certainty at the current time,” it said.
It said there were “a range of actions” it can take to mitigate against weaker trading in the travel business, including previously announced cost efficiency measures.
Saga said it did not expect its insurance business to be affected by the outbreak.
It said it would announce its full year results for the year to 31 January on 2 April.
Saga reiterated that underlying profit before tax is expected to be in line with expectations.
The collapse of struggling airline Flybe today underlines the vulnerability of the travel sector to a slump in demand over fears of coronavirus contagion.
Flybe went into administration today, blaming the coronavirus outbreak for draining customer demand for flights.
The cruise ship sector has also been adversely affected with the spectre of quarantined ships such as the Diamond Princess hitting demand.
The Diamond Princess was quarantined for over a month, with at least 705 out of the 3,711 passengers and crew contracting the virus.
Saga shares rose one per cent to 25p today.