BTG Advisory: Helping your business fly again
While barely any sector has found itself immune to the effects of the pandemic, the travel industry has arguably faced – and continues to face – greater challenges than most.
Even as we look towards emerging from the worst of restrictions on business, challenges continue to plague the industry. While operations have slowly started to resume, trade remains subdued as a cloud of uncertainty dampens demand from cautious would-be travellers.
A combination of changing consumer habits, two disrupted summers, the end of furlough, $72/ UHQHZDO FULWHULD DQG ZDJH LQÀDWLRQ has created a perfect storm which shows few signs of abating.
With further government support not seemingly on the horizon, those within the industry must instead look towards how they can make their business work within this new landscape.
While many companies will be able to adapt in the fullness of time, some adjustment to how the business is funded, operated, and resourced in the short- to medium-term may be required, while cash generation and, KRSHIXOO\ SUR¿WDELOLW\ FDWFKHV XS $ SURFHVV of targeted restructuring and an assessment of current operations can ensure the EXVLQHVV LV IXQFWLRQLQJ LQ WKH PRVW HI¿FLHQW and cost-effective way possible.
Streamlining and cutting costs
When it comes to restructuring a business, WKHUH LV QRW D RQH VL]H ¿WV DOO VROXWLRQ 7KHUH are a multitude of ways this can be achieved and there is value in an independent business review to help assess options and highlight quick wins, which could include discontinuing certain operations or products, changing the supply chain, renegotiating key contracts or payment terms.
Highlighting non-performing areas can allow for time and resources to be directed towards PRUH SUR¿WDEOH DUHDV RI WKH EXVLQHVV
Cash is king: 5H¿QDQFLQJ \RXU FRPSDQ\
Despite the changes the industry has experienced, cash remains king. Whilst businesses may hope for the best, it is vital to plan for the worst and ensure that your company has comfortable cash reserves to allow you to trade through until the time when the business can start generating positive cash. It is critical to identify any liquidity pinch points early to allow maximum time to obtain additional cash. Many businesses fail because despite strong balance sheets, they simply do not have the cash available to pay liabilities when due.
Whilst some lenders are being cautious with the travel sector, particularly after two GLI¿FXOW \HDUV RI WUDGLQJ WKHUH LV D ZLGH range of funding solutions, both debt and equity, to help you navigate through a liquidity crunch.
At BTG Advisory, we can work alongside you, and harness our relationships with lenders to help secure you the best possible IXQGLQJ WHUPV HYHQ LI \RX KDYH ¿QDQFLDO challenges during the pandemic.
For others, an exploration of equity options, including potential M&A deals, may be required to increase the chances of survival. While short-term optimism within the industry PD\ EH ORZ IRU WKRVH ZLWK WKH ¿QDQFLDO power to withstand this period of uncertainty
a brighter long-term future can be seen. This has kept activity levels within the M&A environment buoyant on both buy and sell VLGHV ZLWK SULYDWH HTXLW\ ¿UPV SRLVHG WR acquire those travel companies whose owners have decided to sell up or who need an investor with deeper pockets to weather the storm.
Preparing for a post-pandemic world
The Covid-19 pandemic has had a seismic impact on the travel industry over the past PRQWKV DQG ZKLOVW D VLJQL¿FDQW IRFXV RQ
survival is critical, it is also worth considering how best to thrive in this new environment.
If you anticipate future challenges or want help with potential opportunities – or if your company is already feeling the effects of FRQVWUDLQHG FDVK ÀRZ ± \RX VKRXOG PDNH LW D priority to seek expert help and advice as a matter of urgency.
The sooner advice is sought, the more options will be open to your company, greatly increasing the chances of effecting a successful turnaround or sustained growth DQG SUR¿WDELOLW\ %7* $GYLVRU\ FDQ DVVLVW ZLWK 0 $ DQG ¿QDQFLQJ RU UHVWUXFWXULQJ options to ensure the business is in the best possible position to deal with these changes no matter what the future holds.
07801 239 979 RU HPDLO
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ULQVDOO#EWJDGYLVRU\ FRP Offices across the UK.
www.btgadvisory.com
BTG Advisory LLP, a limited liability partnership, registered in England No: OC319336. Registered office: 340 Deansgate, Manchester, M3 4LY.
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