Saga has refunded £44 million to customers but expects to save £20 million by slashing marketing spend and other costs.
In a trading statement, the over-50s specialist said it had cancelled all departures until the end of August and had refunded the majority of the £44 million to customers of its tour operating business.
It said cruise customers had shown “exceptional” loyalty, with more than 70% of advance payments being retained by the operator as clients insist on taking their voyage once restrictions are lifted. Saga had £43 million in advance cruise payments at the end of May, only £5 million less than at the end of March and “well ahead of expectations”.
“The group continues to expect some travel to resume this year; retention levels continue to be high, particularly in cruise, and a significant number of changes have been made to how the travel businesses operate to provide peace of mind and ensure the safety of customers and colleagues,” it said.
The group has given £56 million to support its travel division, a sum it said had been “partly offset by normal trading in other divisions”.
The Saga Tour group held £45 million cash at 31 May, representing 87% of advance customer receipts. In the last two months it has returned around £28 million to customers and made trading payments of around £23 million, offset by £41 million of cash support from the group.
Once the effects of the cost savings are felt, Saga expects monthly cash burn of the tour and cruise businesses to be £6-8 million a month.
The group completed the sale of Saga Sapphire on 12 June and will take delivery of Spirit of Adventure “by the end of October”. It said it had signed a “debt holiday” allowing deferral of £32 million in costs for its new vessels.