We aren’t putting it lightly when we say that the over-50s market is booming. Thousands of Britons every week are edging into their sixth decade, as the country’s overall average age climbs ever higher. And, as our quality of life improves – along with better knowledge about how to look after ourselves – we are living longer too. Old age ain’t what is used to be (and that’s a good thing). As a new generation of travellers, boasting small mortgages, big pensions and grown-up children, prepare to go out and see a bit more of the world.
It’s no surprise then that Saga have just announced a 55 per cent rise in pre-tax profits. The over-50s specialist has a new ship in the pipeline to complement a massive portfolio of holidays. But, who is a Saga customer? And, given that the company only started working with travel agents towards the tail end of 2014, how has their trade strategy developed? We sat down with James Gambling, director of marketing at Saga, to find out more.
Pre-tax profits have risen 55 per cent. Why is the company doing so well?
Under the leadership of the new team – Lance Bachelor, the new managing director, and Matt Atkinson, the chief marketing officer, the ‘one Saga’ strategy has been designed and is really ringing true with all of the marketeers here. We’re streamlining everything. The popularity of the brand is increasing and, because we’re a PLC now, we are far more transparent with our reporting. It seems like everything is falling into place.
Is Saga’s model around cross-selling between the brands?
Cross-selling is extremely popular. Our price points and brand recognition mean that a lot of people do buy their insurance with us and then are marketed a holiday or a cruise on the back of that.
There are 26,000 cruise passengers per year. 250,000 people take Saga Holidays. How do you intend to increase your cruise passengers?
The big thing for us is the brand new cruise ship, which launches in August 2019. It will hold 999 passengers when full and there will be nothing like her in the market place. Most of the ships which are being built today are of the larger variety – with your P&O and Royal Caribbean vessels – while the other small ship operators tend to be the ultra-luxury providers such as Silversea. We believe that we are offering something very different to anything else. It’s going to turn heads.
Saga is an over-50s product, but where on the market does it sit?
From a quality perspective we are entirely for the over-50s and we position ourselves at the bottom end of luxury. We have two ships, which are both quite old, but what sets us apart is the quality of the service and the way in which our staff treat our customers. Every cruise line says that they have the best service on their ships – and I’m sure it’s good – but they’re all lying when they say theirs is the best because ours is and that’s what sets us apart. That’s why we get so many people coming back time and time again.
Do people who book onto Saga feel like they are part of a club?
Absolutely. Once you have been on a Saga cruise you hear that people want to take more and more. It may take a bit of a leap to get on the first one, but once they understand it, they only want to travel with Saga again. As soon as you sail more than 35 nights you are part of our Britannia Club too, which has great buy-in. Our repeat rates year to year are about 80 per cent. We’ve been running our own cruises for 20 years so we know what we are doing but we have also adapted as the needs of our customers have changed. We constantly test our cruises for quality with our customers and score about 99 per cent on average.
What is the new ship going to offer the line?
She is going to offer something which is unique in the UK market place. We have really researched what our customers, and potential customers, would want in a cruise. We will deliver that through the hardware, the on board experience and the off board experience too. We’re in a fantastic position and when we launch it in 2019 people are going to look at the ship and say, ‘wow, I did not expect that to be a Saga ship’.
In October 2014 you started selling through the trade. Why was that decision made?
The travel agent is a huge part of the booking process. We were a direct operator for about 25 years but saw that customers were still researching and booking through travel agents. They are still part of the consumer journey. We don’t see any sign of that slipping off and we wanted to come to the party, so to speak. We still offer the direct option but some people like booking through their agents and we wanted to give those people the chance to get on board. Our demographics – retired and time-rich people – like to book with human contact, too. A lot of them have been on a ship before but they like to talk it through, face-to-face, with a travel agent before they feel comfortable booking.
Has it been successful? And how have you achieved it?
We are doing very well. It’s true to say we were greeted with open arms by the trade. There was a little bit of scepticism when we started but we have worked hard with the trade to show that we’re here for the long term. We want to work with the trade. We don’t want to just be another supplier, we want to be a partner and I think that’s really important. We listen and learn to what the guys in the trade tell us. We evolve around what they are asking for. They are also incredibly diligent; when we launched our online training platform 700 people completed it in the first few days.
For agents who aren’t currently engaged with Saga. What’s the best steps to become a Saga seller?
We are fortunate enough to have relationships with the big multiples and the big consortia. Our biggest challenge is that people still don’t know that they can sell Saga and also don’t know what Saga is about. We have a dedicated trade sales team here, which has grown from a team of five to a team of 12. The best relationships are built personally. We know that once the guys are on the road and start building those relationships and talking to agents, the business will start to come in. We have competitive commission rates on good revenues so there’s a plus for us but there are significant wins for the agents who can make a lot of money from selling Saga.
What is your customer profile?
It’s anyone; from early 50s to mid-90s. There is no such thing as a standard Saga customer from a demographic perspective. They don’t just want to sit on a Spanish beach – they are looking for adventure, and want to immerse themselves in local culture. We offer a range of holidays which allows them to do that. You can take in the Atlas Mountains or go trekking in Borneo. We offer such a range of experiences, which goes some way to proving that there can’t be just one typical customer.
How important is the solo traveller market?
It’s really important. We launched a solo river cruise recently that has gone down phenomenally well. There is the potential for us to increase those sailings later in the year. On our ocean cruises we have specific solo cabins, which don’t have the added supplement that they sometimes have to pay. We also cater for them with special cocktail parties or group shore excursions, if they wish to join them.