The second half of 2023 is expected to be “much stronger” for mergers and acquisitions in the travel sector after the emergence of “green shoots” in Q2, according to accountancy firm Grant Thornton.
Nicola Sartori, partner at the audit, tax and advisory firm, said M&A activity in the travel sector is starting to gain momentum and there are “positive” changes.
“Despite an otherwise challenging consumer environment, Q2 deal activity shows travel is starting to show a few green shoots,” said Sartori.
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Comment: Travel sector M&A is starting to gain momentum
Accountancy firm reports ‘strong investor appetite’ in UK travel
She pointed to Grant Thornton’s recent Cut Back Economy report which surveyed more than 2,000 consumers, revealing that holidays remain a priority for discretionary spending – surpassing clothing, electricals and household goods.
“Where people are finding times tough, we’re also starting to see a change in how cash-strapped consumers are travelling,” she said.
“Younger generations, for example, are saving money by choosing off-peak travel, last-minute booking and short-haul destinations.”
The report also showed that only 5% of the UK’s most affluent households intend to cut back on holidays, compared with 50% of the least affluent.
“In travel sector M&A, this is reflected by a strong appetite for luxury travel assets,” she said, pointing to Hyatt Hotels’ acquisition of luxury hotel booking platform Mr & Mrs Smith for £53 million in June.
Also in June, Wayte Travel Management acquired Quintessentially Corporate Travel Management (QCTM) – the corporate travel arm of concierge service Quintessentially, which bills itself as “the global authority in luxury lifestyle management”.
Sartori also cited research from inbound trade association UKinbound, which found that two-thirds of UK tourism firms expect revenue and booking levels for Q3 2023 to be the same or higher than before the pandemic.
Sartori said 10 deals were announced in the UK travel sector in the second quarter of 2023, matching Q1’s tally.
“Elsewhere in the M&A environment, we’ve seen a trend in follow-on investments as investors stick to what they know in uncertain times,” she added.
“With a marked uptick happening in buyer and seller conversations, we expect deal volumes to increase after the key summer season offers more visibility on travel uptake, and anticipate a much stronger Q3 and Q4 in terms of M&A in the sector.”
Picture by Mongkolchon Akesin/Shutterstock.