Case Study

Helping a travel business to survive and thrive during a pandemic

Strategic advice on securing liquidity kept travel advisors operating during the pandemic and positioned for success.

view of empty beach

The better the question

How a travel firm can survive when travel becomes impossible

Scott Dunn engaged EY-Parthenon to help it deal with challenges arising from the COVID-19 pandemic.

As countries closed their borders one after the other during the first months of the COVID-19 pandemic, it quickly became clear that the travel industry would be one of the hardest hit. Holidays abroad were untenable.

For all travel businesses, including Scott Dunn, the impact was immediate and absolute. The London-based luxury tour operator, founded in 1986 as a ski company operating chalets in the Alps, has expanded over the past 35 years to offer everything from beach holidays to safaris, all tailored to the customer’s requirements. It has won numerous awards, most recently “Top Travel Specialist in the World” in the 2021 Condé Nast Traveller Readers’ Choice Awards, the ninth year in a row.


In 2020, however, the landscape changed. According to Sonia Davies, CEO of Scott Dunn, “travel is a very resilient industry, used to dealing with ups and downs… travel advice changes, there are terror attacks, there are natural disasters — but the COVID-19 pandemic was deeper, longer and wider impacting than anything we’d ever seen.”


By March, Davies and her executive team faced a number of challenges, from the practical to the financial. Business dried up overnight and customers were either overseas and needing to be repatriated or requesting refunds for trips that were no longer possible. As Scott Dunn staff around the world dealt with an unfamiliar volume of enquiries, the business was facing a liquidity challenge.


In mid-March 2020, as the scale of COVID-19’s impact on the travel industry became clear, Scott Dunn contacted EY.

Receptionist hotel desk

The better the question

The importance of holistic solutions

EY-Parthenon brought a range of stakeholders together to support the company.

EY really helped us to articulate what the best outcome would be for our business — this actually meant the best outcome for all of our stakeholders.

Meg Wilson, an EY-Parthenon partner in the Reshaping Results team, explained that the first job was to help Scott Dunn determine how best to use the new UK government furlough scheme. But the much more fundamental task was to help the business ensure it had sufficient liquidity and financial stability to weather this exceptional period.


A number of linked factors were affecting Scott Dunn’s liquidity. With no one booking new holidays, travel businesses were no longer receiving deposits or payments for future business, and the company was also refunding customers for holidays that they could not take. At the same time, Scott Dunn was seeking to recoup pre-payments it had made to suppliers. Moreover, the company couldn’t simply furlough all its staff at a time when customer demand, for repatriation support, rebooking or refunds, was sky high.


The EY-Parthenon team worked with Scott Dunn to gain the support of key stakeholders — including financiers and regulators — to secure the financial stability required. “We helped Sonia and her team release tied-up funds and secure new money, fairly balancing the contributions from different parties, so that the business had the financial breathing space to maneuver effectively through unprecedented challenges,” says Meg Wilson, an EY-Parthenon partner based in London.


Partners in adversity


For her part, Davies appreciates the EY team’s holistic approach to the challenges Scott Dunn faced. “EY really helped us to articulate what the best outcome would be for our business — this actually meant the best outcome for all of our stakeholders,” she says. “Through the work that we did with EY, we have deepened those relationships with our financial stakeholders and our regulators in particular.”


She also appreciated the team’s empathetic approach. “We had some very difficult decisions to make and I always felt that I could be open and honest with the team we worked with at EY, and that they actually understood the situation I was going through. When I’ve worked with some consultants previously, it was quite theoretical, whereas I really felt that EY understood what it was like to walk in my shoes.”


The combination of in-depth knowledge of the travel sector and creative and solution-focused approach was key to the Reshaping Results team’s success. Wilson comments: “We have experience of being in these very stressful situations. Providing calm and stability through swift interventions allows time and space to use specific circumstances and business needs to develop better solutions and deliver the most productive stakeholder engagement. It keeps a business in control and ready to rebuild.”

lady wearing white walking by palm trees

The better the world works

A solution that worked for everyone

After a very challenging 18 months for the travel industry, Scott Dunn is well placed to take advantage of renewed customer demand.

Looking back, Wilson says: “We had to develop the approach and convince our stakeholders it was the right way forwards. Through our fact-based approach and careful and constructive negotiation, we were able to implement a comprehensive and holistic solution where everybody who had risk on the table joined in.”

It’s a sentiment that was echoed by Catherine Richards, a partner at Inflexion (private equity investor in Scott Dunn), in a message sent to EY in July 2020: “If we had been told in March that we could secure the deal we have today, we would have snapped your hand off in a heartbeat. EY has been excellent throughout and the entire board is incredibly thankful.”

The ultimate proof of success is that Scott Dunn has continued trading throughout the pandemic, and as restrictions ease the company is seeing strong demand from its customers to travel internationally once more. Not that Davies is assuming that it’s back to business as usual.

“I don’t think we’ve seen the end of the impact of COVID-19 on the travel industry,” she warns. “It has touched every single part of the travel and hospitality supply chain, from tour operators and travel agents like Scott Dunn, to airlines, hoteliers, restauranteurs, guides, even people who make jewelry in destinations and sell them to tourists.”

There are a number of other challenges ahead for the travel sector, including changes to Air Travel Organiser's Licence (ATOL) regulations (which protect consumers in the event of a travel company failing), the consequences of Brexit, commitments to more sustainable travel and various ongoing government airline reviews, together with evolving operating models in response to changing customer preferences.

Nevertheless, Davies is optimistic. “I think we’ll see some short-term headwinds and some long-term systemic changes, but also opportunities,” she says. “The industry is resilient and the demand for leisure travel is always there – and perhaps now more than ever.”

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