Global travel and tourism M&A stalls amid socio-economic issues

New figures suggest that the socio-economic headwinds that have impacted many countries around the world over the past year have taken a toll on dealmaking in the global travel and tourism sector. New data shows that deal volume in the sector was down more than 36 per cent during the first eight months of the year.

According to new figures from data and analytics firm GlobalData’s Financial Deals Database, there were 482 deals announced worldwide in the travel and tourism industry between January and August 2023, compared to 756 deals during the same period in 2022 – a drop of 36.2 per cent.

Looking at the figures more closely shows a 37.8 per cent year-on-year drop in mergers and acquisitions (M&A), a 38.1 per cent decline in private equity deals and a drop of 30.8 per cent in venture financing deals.

GlobalData Lead Analyst Aurojyoti Bose commented: “Economic uncertainties including interest rates hikes, rising inflation, looming recession fears coupled with geopolitical tensions seem to have made investors cautious, which led to the significant decline in T&T deal activity across many countries.”

A number of key markets have seen significant declines in dealmaking activity so far this year, including the UK (45.3 per cent drop), the USA (47.2 per cent), Japan (62.5 per cent) and Canada (33.3 per cent). A number of other countries also saw double-digit falls in dealmaking, including the Netherlands (31.3 per cent), Australia (20.8 per cent) and France (13.6 per cent).

However, despite the significant drop in activity, Aurojyoti Bose also voiced optimism for the sector’s prospects. Travel and tourism M&A has previously rebounded strongly from the COVID-19 pandemic, with the UK, for example, experiencing a boom in domestic holiday M&A as a result of restrictions on international travel.

Bose said: “Despite the challenges, its ability to adapt and recover has been a hallmark of the travel and tourism industry, and this resilience is likely to drive a resurgence in deal activity when the global landscape stabilizes.”

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