Travel companies have been advised to “forecast with caution” due to the current speed of economic, political and climate change and seek professional help if looking to exit their business.
Speaking at the Aito Overseas Conference 2023, industry veteran Richard Carrick said the world was experiencing ever more extreme climatic events, over tourism, “precarious economies”, failing political systems and “massive” migration issues.
He said: “The current pace of change is more profound and rapid than I have ever experienced. As ever that change throws up some opportunities [but] forecast with some caution.”
Carrick said he believed investors were “more nervous about travel” as a result.
“They put travel in the centre of all this volatility,” he said, urging any travel firms seeking to sell up to appoint a professional advisory service because of the effort and time needed to devote to any sale.
“It’s exhausting , it can suck the life blood out of you,” he said.
But he admitted The Specialist Travel Association (Aito) members were in a more protected position and said ultimately that investors wanted to “buy people” rather than technology.
He said: “Aito members are doing pretty well. Most are top end and specialist travel businesses that are having their most profitable years of all time.
“I think there is still a very strong customer inclination to travel; a stubborn response to the choppiness. I think demand for specialist, expert knowledge and immersive experiences stands you [Aito companies] in good stead, underpinned by customer service.”
He advised travel firms to maintain their focus on “human customer service”; remain focused on cost and profit; engage with non executives and consultants for advice; develop a “road map”; and talk to other Aito businesses.
Travel specialists involved in acquisitions told the conference they were continuing to see investment in the travel sector.
Travel Trade Consultancy director Martin Alcock said: “We have completed three deals in the last two months, one was a very specialist business. I think the mass market is a lot harder, the dynamics are more challenging.”
Jonathan Wall, director of travel accountancy firm Elman Wall, which owns mergers and acquisitions arm Summit Advisory, added: “Everyone wants to sell at the moment but [they are] not necessarily sold. The legal fees are sometimes more than the acquisition price.”
Chris Thompson, director of growth consultancy, The Firebird Partnership, said it was critical for businesses to plan ahead. “Succession planning is massively important,” he said, adding companies should develop their teams and look at how to add value for the longer term.
Alcock said any founders of businesses looking for an exit needed to ensure that potential buyers “bought into the growth story” and a loyal workforce. “No-one will buy if staff are going to walk out the door,” he added.