Deals involving firms in the global travel and tourism sector slumped 41% in the first five months of 2023, according to new data.
The UK saw a 48% decline against the same period last year amid a cautious approach to the overall industry by investors, data and analytics company GlobalData found.
Deal activity fell from 475 during January-May 2022 to 282 in the first five of months of this year.
Merger and acquisition (M&A) deals volume fell by 43% while the number of venture financing deals and private equity deals declined by 34% and 44% respectively during January to May 2023.
GlobalData lead analyst Aurojyoti Bose said:“The decline in deal activity in the industry indicates dampened sentiments and cautious approach of investors.
“The ongoing uncertainties and impact of the geopolitical tensions, inflation and recession fears have forced deal makers to adopt a more conservative approach.”
Bose added: “The industry also witnessed a substantial year-on-year decline in deal activity across most of the regions worldwide during the period.”
North America and the UK experienced a decline of 48% in deals volume compared to the same period the previous year while Europe, Asia-Pacific and South and Central America regions registered declines of 49%, 27% and 36%, respectively.
Meanwhile, deals volume for the Middle East and Africa region remained unchanged.
India, France, Australia and Japan also witnessed declines of 33%, 7%, 29% and 54%, respectively, in deals volume during January to May 2023.
Bose said: “On the other hand, easing of travel restrictions seems to be encouraging Chinese travellers.
“As a result, China stood out as a notable exception and registered a 19% year-on-year growth in the number of deals announced during the period.”
The findings contradict a Grant Thornton report last week which forecast increasing numbers of mergers and acquisitions in the UK travel market over the rest of 2023 as the post-pandemic recovery continues.