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Case study

Travel company finds new routes to profitability

A $1.5 billion travel and leisure company needed to reduce costs to remain profitable and competitive in a scale-driven industry that was showing early signs of price pressure. Bain analyzed cost reduction opportunities and identified four key opportunities for improving profitability, resulting in a three-point margin improvement over two years.

  • min read

At a Glance

  • 42% increase in share price
  • 3 point margin improvement

The Full Story

The Situation

TravelCo*, a $1.5 billion travel and leisure company, operates in a scale-driven industry that was showing early signs of price pressure.

  • TravelCo was the number three player in the industry
  • The industry was showing early signs of price pressure
  • Planning and decision making have traditionally been made with a significant emphasis on "gut feel"
  • Bain was brought in to help identify opportunities for cost savings, revenue growth and to add rigor to decision making process in order to allow TravelCo to remain both profitable and competitive in the marketplace.

Our Approach

A detailed analysis of the company's operation revealed several areas for improvement. Bain used fact-based methodologies to uncover opportunities for cost reduction:

  • Call center operations
  • Purchasing
  • Logistics
  • Business processes
  • Organizational structures
  • Back office functions

Our Recommendations

Bain's analysis identified four key areas that would create improved profitability. They included cost reduction measures, business process improvement, globalization and new revenue opportunities.

The Results

TravelCo has experienced a three-point margin improvement over two years. The Bain approach empowered the client team.

 

* We take our clients' confidentiality seriously. While we've changed their names, the results are real. 

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