Saga sees profits boom as the over 50s opt for kid-free holidays

Many baby boomers, people who were born after the second world war and before the swinging sixties, have a healthy disposable income thanks to soaring house prices and generous pension'‹ schemes and are choosing to spend their cash '‹on holidays to far flung places.Trading profits at '‹Saga's'‹ travel business rose more than a quarter - up 26.5'‹ per cent'‹ to £17.2'‹m '‹- in the year to January 31 '‹as passenger numbers '‹jumped'‹ 10'‹ per cent'‹ to 189,000'‹'‹.'‹O'‹lder travellers now account for 58'‹ per cent'‹ of travel and tourism expenditure in the UK and Saga said this generation will become increasingly important as more people live longer and healthier lives.In 2013, the over 50s in the UK spent roughly £1.9'‹bn on cruise holidays. '‹'‹'‹This will increase by 46'‹ per cent'‹ to £2.8'‹bn by 2020'‹, according to analysis by Cebr'‹.Saga's head of communications Lisa Harris said: "Many people approaching retirement look forward to being able to take holidays when they want to, rather when work or family commitments dictate."With more time available to them they don't have to limit their holidays to a week or two, they can go for longer and travel much further afield."These are the generations that really broke the mould when it comes to what retirement looks like, and having done the beach holidays throughout their working lives often have a real thirst for adventure and a desire to do something different."Saga said it has evolved its travel offering to include dream holidays such as Grand Tours of India, tours through Uzbekistan taking in the famous silk-route, and real backpacking for grown-ups in Africa."It's for this reason that many older people shrug off the title of retirement. They may no longer be working but they have no intention of stopping - in fact it's quite the opposite for many they're just beginning to realise their dreams," said Ms Harris.'‹Cruises remain a key attraction for the over 50s, helped by '‹Saga's relatively small cruise ships. The Saga Sapphire has a maximum of 720 passengers and the Saga Pearl II has a maximum of 449.A third, yet to be named, ship will be launched in 2019 and will carry less than 1,000 passengers.The biggest cruise liners can carry more than 5,000 people, but Saga has avoided this area as its customers prefer smaller vessels.Cebr said that among the over 50s who are still working, 3'‹6 per cent'‹ said they plan to increase their spending on long haul holidays after retirement.Saga's annual pre-tax profits jumped to £176.2m in the year to January 31 from £113.8m, although the previous year's results were hit by £50m in costs from its 2014 stock market flotation and other debt and borrowing costs.On an underlying basis, group earnings increased '‹five per cent'‹ to £238.8'‹m as Saga also grew profits across its insurance businesses.Lance Batchelor, Saga group chief executive, said the company made significant progress over the past year."The year ahead will see a renewed focus on our customers and further developing the Saga brand'‹," he said.'‹'‹The travel business reported an 11 per cent rise in revenues to £423.1m.Saga's insurance businesses also fared well, with motor profits up 1'‹8 per cent'‹ to £118.3'‹m as it benefited from rising premiums, which picked up pace at the end of 2015.It also grew motor policies by 3.1'‹ per cent'‹ to 1.2'‹m.Premiums fell in its home insurance business amid a "highly competitive" market, but this was offset by a 2.3'‹ per cent'‹ rise in policy numbers, which helped profits rise 3.2'‹ per cent'‹ to £64.1'‹m.Saga, whose £2.1'‹bn flotation was one of the biggest stock market listings of 2014, saw full-year cruise sales rise 2.6'‹ per cent'‹ to £86.2'‹m.'‹T'‹he group warned profits in the travel business will be impacted in the year ahead as it plans to take one of its ships, the Saga Sapphire, out of service for two months to give it an overhaul.'‹Saga said it would pay a full-year dividend of 7.2'‹p per share, up from 4.1'‹p last year.

'‹'‹Saga was founded 65 years ago by Sidney De Haan, the former owner of the Rhodesia Hotel in Folkestone, when he started offering '‹affordable, '‹off-peak holidays '‹exclusively '‹to retired people.Saga's chairman Andrew Goodsell said: "During all of our 65 years, our focus on customer needs has been the driving force behind the growth of the business.'‹"'‹They remain at the heart of everything we do and our model is underpinned by the provision of exceptional levels of customer service.'‹"'‹'‹In the 1960s the firm pioneered tourism in the Algarve, adding further destinations throughout the UK. It also developed the concept of direct marketing, cutting out the travel agents and dealing directly with our customers.'‹In the '‹1970s'‹ it added'‹ destinations in Spain, Romania and '‹former '‹Yugoslavia. In the UK '‹it became British Rail's largest passenger customer as specially chartered trains carried'‹ holidaymakers to destinations around the country.'‹In the '‹1980s'‹ it added l'‹ong-haul holidays to Hong Kong, Singapore and Bangkok as well as the first world cruise.'‹Its first cruise ship Saga Rose entered service in the 1990s and'‹ the age restriction for Saga customers was lowered from 60 to 50.In 2011 Saga Sapphire became the latest addition to the cruise fleet.