Big Interview: Andrew Strong

Big Interview: Andrew Strong

Despite being a household name, Saga Holidays has only recently been available through agents. Lucy Huxley spoke to the chief executive of Saga's travel division about his plans for the group

In October 2014, Saga decided to start selling its holidays and cruises comprehensively through agents for the first time.

Since the company was founded by Sidney de Haan in 1951 – selling affordable, off-peak holidays to retired people – it has grown to a sizeable business through organic growth and acquisition. Saga’s travel division consists of Saga Holidays, Saga Cruises, escorted touring company Titan Travel and luxury agent Destinology.

Agents

“Traditionally, the business has been overwhelmingly a direct-sell one, but of the customers in Saga’s target market, 50% use an agent to book a holiday,” says Strong.

“So if Saga doesn’t have a presence in agencies, then we’re effectively saying that agents aren’t relevant to Saga, or that Saga isn’t relevant to agents – neither of which is true.

“The trade represents 5%-7% of Saga’s travel business and can definitely grow considerably.

“But once you commit, you have to do it properly and not be half‑hearted about it.

“One of the things we’re determined to do is retain the feeling of heritage and good values that Saga is known for, as we grow the business.”

Strong is passionate about the market that Saga serves, its potential and about increasing awareness among agents.

“The ‘silver market’ is the fastest-rising demographic – there will be some 10 million more over-55s in the next decade,” he says.

“But we need to improve recognition of the Saga brand through the trade and what it’s all about. We need to ensure agents are aware of the range of destinations, via long-haul and European tours, that we offer, and through our ocean and river cruises.”

Saga has already made good progress, signing deals with Tui and Thomas Cook, agent consortia and most of the independent chains.

Saga Cruises

Saga has a ‘two-ship strategy’, and has placed an order with Meyer Werft for a new vessel to join the fleet in 2019, when one of its existing ships retires. “We also have an option for a second new ship,” says Strong.

Saga Sapphire had a total refit in December 2014, while sister ship Saga Pearl completed its drydock in Hamburg this winter and is now in South America.

The new ship will be larger than the existing two but will still carry fewer than 1,000 passengers.

“Our passengers prefer the smaller cruise ships, where they can get a more personal service, more unusual itineraries and a more intimate experience,” adds Strong.

Carnival Corporation’s David Pickett, who helped deliver many of the cruise giant’s new ships, has been appointed to oversee the project.

Strong says: “With state-of-the-art fuel efficiency, the new ship will future-proof our business.”

All cabins will have balconies, while the ship, like Saga’s other vessels, will be all-inclusive.

“One of the biggest fears for our target market is extra charges once they’re on board. So we give them the peace of mind that once they’ve paid their money, that’s it.”

Saga’s cruise proposition also includes its door-to-door transfer service from customers’ homes to the port – something it has added to its third-party cruise offering.

There is more demand for cruising than Saga can service in-house, so it also offers cruises with Fred Olsen, MSC, Norwegian Cruise Line and Azamara, all of which are sold through the trade.

Saga Holidays

Saga Holidays carries 120,000 passengers a year, 25,000 of whom visit long-haul destinations as diverse as Colombia and Uzbekistan.

But Strong says the big focus for 2016 will be developing the operator’s European product and expanding the river cruise programme.

“We offer really nice hotels in the best locations, well-crafted excursions and great value for money – and we get excellent repeat rates,” he says.

“But the target market of the future is going to have different expectations. Is what we’re offering today the sort of product that our customers are going to want in five or 10 years’ time?”

“My view is that customers are going to want increasing independence and flexibility. Rather than coming on one of our holidays, it needs to be their holiday that we are helping to manage. I think we need to cater for the more exploratory traveller.”

Saga has launched a ‘Freedom’ range featuring beach hotels across Europe, available online, on technology built by sister company Destinology. It features the tagline ‘Your Time Is Your Own’.

“We’ve just dipped our toe in at the moment. We’re gauging the reaction,” says Strong.

“We will constantly refresh Saga to ensure we offer the right travel products and experiences to appeal to every new Saga generation.”

Titan Travel

Strong says escorted touring specialist Titan Travel will post a record year for revenues and profits for 2015.

This year, Titan will increase its investment in product and marketing.

“The back office is now sorted, so we will concentrate on new channels to market,” adds Strong. “We have had new digital capability since July and have recruited a digital team to promote the brands in new channels.

“Titan sells well through the trade, so will be included in all plans.”

The future

Strong says: “Typically, people use our credit card services and insurance from their early-50s, which is also when they might book a holiday with Destinology. They might take a Titan tour in their late-50s and early-60s, while the average age of a Saga Holidays customer is late-60s to early-70s. For a Saga cruise, it’s late-70s and 80s.

“It feels to me that, for travel, a small collection of brands with different propositions that attract different parts of our target market – which all have diverse sets of needs – is more realistic than trying to be all things to all people under one brand.”

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