If you’re looking to drive strategic growth, acquiring another travel business, often referred to as a bolt-on acquisition, could be the route for you.
Bolt-on acquisitions can help you quickly access a range of benefits:
Buying a travel business should bring an immediate boost to your revenue. And, if your cost base can already support this extra revenue, or you can keep incremental costs low, this will also immediately increase your profit margin. This will be great news for your existing investors and a powerful growth story for attracting new ones.
Acquiring a complementary travel business can immediately expand your product offerings or enter new areas of the market. This will provide more variety to your existing customers, as well as reaching new customers without having to build out products from scratch. It can smooth out your annual cash flows and reduce your dependency on any one segment or destination.
Market share growth
By taking over a competitor, your company can immediately increase its market share and gain a competitive advantage. The combined travel business will have more bargaining power, better economies of scale, and greater brand recognition. By acquiring a competitor, you’ll eliminate a rival from the market, reducing competition and potentially increasing your pricing power.
Innovation and know-how
Acquiring a business with innovative technologies can propel you up the growth curve more quickly than years of in-house development.
Similarly, if you’re looking to bolster your team with specialist product expertise or experience, an acquisition may be faster than recruitment and training. Just make sure you smooth the transition and incentivise those people you need to keep!
In the current economic environment, many travel companies are struggling to keep on top of working capital needs, increasing costs and debt repayments as they grow. Joining forces with another travel business can help you achieve cost savings through economies of scale, reduce overhead costs per booking and improve your overall profitability.
Bolt-on acquisitions can be a great way to grow, diversify, save costs and stay innovative in a challenging and dynamic market. If you’re considering a bolt-on acquisition or thinking about selling your business, we’d love to hear from you.
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