Travel M&A recovery finally takes off

M&A activity in the UK’s travel and tourism sector has increased significantly during the first half of 2024, finally delivering on a dealmaking recovery that has long been forecast to take place.

The sector has experienced as turbulent a few years as any other, having naturally ground to an almost total halt during the COVID-19 pandemic, which continued to make its effect felt on the industry for years after the initial crisis.

While there were some bright spots – an active market for domestic travel targets amid the pandemic’s “staycation” boom, resilient dealmaking in sub-sectors such as hotels and a surge in activity during the post-COVID boom in 2021 – the past few years have broadly seen slow activity over recent years.

2023, in particular, saw travel and tourism M&A plummet globally. Economic factors such as high inflation, interest rates and the cost-of-living crisis hit the industry hard, as did geo-political tensions arising from Russia’s war in Ukraine and COVID-19's persistent impact on the crucial business travel market.

In the first three quarters of 2023, a report from Sterling Technology and Hotel Management Network analysing GlobalData figures found that dealmaking was down 33 per cent compared to the same period in 2022, with North America seeing a near 44 per cent drop and Europe close to 40 per cent.

Discussing the headwinds impacting the sector last year, GlobalData Lead Analyst Aurojyoti Bose said: “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.”

However, even at that time, there was optimism for the sector’s prospects, with Bose saying that the “ability to adapt and recover has been a hallmark of the travel and tourism industry”, adding that “this resilience is likely to drive a resurgence in deal activity when the global landscape stabilises.”

In 2024, this finally appears to have happened. While headwinds no doubt remain, the resilient appetite for M&A has translated into solid increases in deal value and volume, with indications that this upward trend could be poised to continue.

So far in 2024
Following the surge in 2021, there was widespread optimism that normal levels of dealmaking activity would return to the travel and tourism industry – in spite of the lingering threat of COVID-19 and the pandemic’s economic impact.

In the UK, as in much of the rest of the world, these hopes were dashed (or at least, significantly delayed) by geopolitical tensions – most notably the war in Ukraine – and economic turmoil.

This resulted in significantly depressed levels of activity from the second quarter of 2022 until the end of 2023, as well as a steep drop in deal value that persisted during the same time period.

At the outset of 2024, the picture began to improve somewhat, as some measure of economic stability returned to the UK. During the first quarter of the year, Grant Thornton (referring to Mergermarket data) reported a 60 per cent increase in deal volume in the travel and accommodation sector, with 16 deals completed (updated to 18 in figures reported in Q2 2024) in comparison to just 10 deals in both Q4 and Q2 2023.

While deal value remained low during the first three months of the year, the sharp increase in activity indicated that underlying appetite for M&A deals seemed to be bearing fruit.

Further backing this up was an even more dramatic increase in private equity activity. Over recent years, private equity buyers have been largely extremely reticent to deploy their funds amid a significant number of headwinds. However, Grant Thornton reported that there were seven deals with PE involvement in the UK travel and accommodation sector during Q1 2024, compared to two in Q4 2023 just nine across the entirety of last year.

This was an increase of 250 per cent, with Grant Thornton writing that PE activity was spurred “by consumer confidence, the reopening of debt markets and a high volume of assets for sale.” Seemingly, the handbrake had been released, with the strong appetite for activity and the exit plans held by many owners finally translating to a tangible increase in dealmaking.

This recovery was solidified during the second quarter, with deal volume level with Q1’s figures (18 deals) and a significant uptick in total disclosed deal value from approximately £500 million to around £1.2 billion.

Despite Mergermarket data showing a slight drop in private equity deals (from 8 deals in Q1 to 6 deals), Grant Thornton said that this dip was not significant, with the overriding takeaway being a 200 per cent increase compared to Q3 2023.

Taking a broader look at the past two quarters, Grant Thornton wrote: “Deal volumes in the first half of 2024 show that investor appetite for travel assets has well and truly returned. We expect this to continue as the year progresses and lending conditions improve.”

What is driving the increase?

Hotels
Even during the most difficult periods that the travel sector has experienced over recent years, the hotel sector has proven a bright spot, with resilient dealmaking activity and strong appetite for transactions.

This has come in spite of significant challenges, with a report from UHY Hacker Young revealing earlier this year that hotel insolvencies had risen 19 per cent between 2022-23 and 2023-24, driven by soaring costs (particularly for wages) and the post-COVID decline in business travel.

However, even amidst this gloom, the sub-sector still remained something of a hub for dealmaking in the travel industry. Despite a sharp drop in hotel dealmaking last year, Christie & Co said that there was “no shortage of capital keen to invest in hotels”.

GlobalData’s Nicholas Wyatt said that a backdrop of high inflation and rising interest rates had led hotel operators to take “a more cautious approach to M&A activity while they wait to see how the ongoing recovery progresses and assess to what extent business travel, traditionally a key driver of the industry’s performance, has fundamentally changed.”

The sector’s recovery has begun to gather speed so far in 2024, with economic improvements helping to ease concerns around a lack of discretionary spending by tourists and other holidaymakers and signs that business travel is poised to return to more normal levels as COVID-19 becomes less of an issue.

In the first quarter, Grant Thornton reported that hotels remained the most active dealmaking sub-sector in the UK market, accounting for 50 per cent of transactions. According to the Q1 report, increasing activity by institutional investors reflected “the perception that hospitality may be better able to manage cost-base fluctuations than other sectors.”

The report continued: “The spread of deals shows that investors expect growth in both luxury experience-led and obligatory value-led travel, such as work trips.”

In the second quarter, this trend continued, with hotels accounting for more than 55 per cent of the 18 transactions seen during the period. Encouragingly for the sector, there were a number of large deals, with Landsec selling it portfolio of 21 hotels to Ares and operating partner EQ Group and Blackstone Real Estate acquiring the 33-strong Village Hotels portfolio of 33 sites from affiliates of KSL Capital Partners.

While challenges remain for the sector, with significant cost headwinds and sluggish occupancy and average daily rate (ADR) growth, the underlying fundamentals for dealmaking in the hotel industry remain strong.

The UK’s economic recovery may be proceeding slightly slower than some expected, but it is broadly expected that interest rates will be cut one more time before the end of 2024, which will go a considerable way to easing concerns around price expectation gaps, while growing appetite among PE firms and institutional investors could also provide a significant boost to M&A.


Bespoke Hotels is a UK hotel operator focused on family, business, spa and luxury hotels. The company, which is the UK’s largest independent hotel group, has a collection of more than 70 independent hotels, many in key UK tourist destinations.

In September 2024, the company acquired four hotels from the Coast and Country Hotel collection: the Caledonian Hotel, Fort William; the Great Western Hotel, Oban; the Pitlochry Hydro and the Marine Hotel, Llandudno.
The acquired hotels strengthened the group’s presence in major UK tourist locations, adding sites in areas including the Welsh coastline and Scottish highlands.

Bespoke Hotels Chairman Haydn Fentum commented: “I’m delighted to announce the acquisition of these four regional hotels, which represent a significant step forward in our growth strategy. These properties align perfectly with our vision of offering exceptional hospitality experiences across the UK. We are confident that our management and operations expertise will enhance the value of these assets and provide our guests with even more choices.”

Fentum added that the acquisition follows Bespoke’s recent acquisition of management contracts for hotels including The Green House Hotel in Bournemouth and Cwrt Bleddyn Hotel & Spa in Wales and that the deals “underline Bespoke Hotels’ commitment to growing a diverse and dynamic portfolio that caters to a wide range of guests.”

The sale was handled by Christie & Co Director Jeremy Jones, who said: “The sale of these four hotels to Bespoke and their investor partners is further evidence of the real momentum in the regional UK hotels market.”
“Christie and Co anticipate further deals being announced in the weeks ahead which will include regional commercial and leisure focussed hotels.”

Luxury
A hotel-industry trend identified by Christie & Co earlier this year was the continued strong performance of luxury hotels. In their Business Outlook 2024 report, Christie & Co stated that the hotel sector was seeing strong performance in both value-for-money accommodation offerings and luxury hotels.

According to the report, this could lead to “Further polarisation of the market towards economy and luxury segments with a squeezed midscale segment.”

This reflects a broader trend across the travel and tourism industry, with luxury options continuing to perform strongly, while soaring prices see many others turn towards better value options.

In their Spring report, Grant Thornton stated that the spread of UK travel and accommodation deals during the first quarter of 2024 demonstrated that “investors expect growth in both luxury experience-led and obligatory value-led travel, such as work trips.”

Looking at M&A trends in the sector for 2023, Grant Thornton partner Nicola Sartori said that acquisitions such as the sales of Scott Dunn and Mr & Mrs Smith demonstrate that there is significant “appetite for brands that cater to a financially resilient end-consumer.”

Discussing the sector’s resilience even in the face of significant price increases, Houlihan Lokey director Thomas Barnard wrote: “Despite global travel price rises of between 20% and 40% in 2023 compared with pre-Covid levels, consumer appetite to travel has remained strong as the long-term trend seeing consumers prioritise "experiences" over "things" continues to prevail.”

Barnard wrote that Houlihan Lokey had “seen particularly strong demand in the luxury, experiential and cruise” sectors, with buyers targeting the over-55s market in particular. According to Barnard, this segment of travellers “have shown strong appetite to travel post-Covid and have perhaps been more insulated against interest rate rises.”

For many people in this age group, vulnerability to COVID-19 will have meant that they were unable to travel, or significantly limited in how they could travel, during and after the pandemic.

This, combined with the greater spending power of many older travellers seems to be encouraging them to spend more than they typically would on their holidays as concerns around COVID-19 ease, providing a major boost to the luxury end of the travel sector.


Travel Seen, an online travel business established by travel industry entrepreneur and former ITC Travel Group CEO Jen Atkinson, has completed a number of deals in the past 12 months targeting businesses in the luxury travel sector.

In November 2023, the company, which is backed by Arete Capital Partners and several North West entrepreneurs, acquired a majority stake in luxury travel agency Aquilium Travel and invested in sports and lifestyle travel startup Vedere.

These deals were followed in September 2024 by the company’s acquisition of a majority stake in Manchester-based luxury tour operator eShores. A specialist in long-haul, multi-centre, tailored holiday tour packages for customer, eShores generated approximately £12 million in annual revenue.

Discussing the eShores deal, Jen Atkinson said: "We have searched for experienced, high growth travel businesses and eShores represents our third exceptional investment within the last 12 months.”

"This next investment represents a step change in the scale and credibility of our growth and M&A mission. One of the most important factors when investing is the quality of the team and what Gavin and Nadine have built through a very difficult trading time is enviable.”

"We are excited to welcome eShores into the Travel Seen family and look to continue making further investments as we grow, both organically and through further investment."

Travel Seen is focused on providing “social first” luxury travel, a segment of the market that Jen Atkinson offers “huge” scope for building travel brands.

Cowgills Deal Advisory Partner Sam Davies, who advised on the acquisition of eShores, stated that the deal “will further enhance the Travel Seen group, as Jen Atkinson and the team continue to make strategic M&A choices to build their client offering and create a unique proposition in the market."

COVID backlog
As dealmaking figures drastically declined during the COVID-19 pandemic, a huge backlog of deals built up across many industries, ultimately leading to the huge surge in activity seen during 2021.

The travel industry was, of course, more affected by the pandemic than most other sectors, and the continuation of post-COVID travel regulations and restrictions meant that the 2021 increase was less dramatic than in many other markets.

Add to this the subsequent economic and geopolitical headwinds that the industry has faced since the first quarter of 2022 and the sector has amassed a huge backlog of potential deals that should now start to go through as the threat of the pandemic recedes and economic conditions ease.

In their Q1 2024 report, Grant Thornton cited a backlog of sales as one of the major tailwinds behind increasing levels of M&A activity and something that could continue to drive dealmaking over the coming months:

“During the pandemic, the usual reasons for exiting a business remained: ageing owners, PE cycles, management buyouts. These created a bank of pent-up deals that are now coming to market.”

Houlihan Lokey’s Thomas Barnard, meanwhile, stated: " Following the extended hiatus in M&A transactions, there is a huge backlog of small, medium and large outbound travel assets after private equity firms held off transactions for longer than anticipated.”

"It is encouraging discussions between bankers, investors and management teams have now progressed from relentlessly questioning when will Covid be in the rear-view mirror to a general understanding that a sufficient period of trading post-pandemic has allowed trends to stabilise.”

“This acceptance of a "new normal" has given boards confidence to actively assess strategic options and open the door to what we believe will be an active travel M&A market in 2024 and 2025.”

Given the years of disruption that the travel and tourism sector has experienced, it is likely that this significant backlog of delayed deals, frustrated acquisition appetite and the increasing number of owners potentially seeking to make an exit now that political and economic tensions have eased, will help to drive a significant amount of dealmaking in the industry.

Private equity returns
Across many sectors, one of the major M&A talking points over recent months is when private equity investment may once again pick up and the travel and tourism industry is no different.

The sector has long been an attractive investment for private equity firms. However, with many PE buyers slowing down their investment activity since the COVID-19 pandemic, and travel being among the worst affected sectors in recent years, activity has slumped since the middle of 2022.

During 2021, Grant Thornton recorded 17 UK travel and accommodation deals with private equity involvement. 13 of those deals occurred during the second half of the year as pent-up dealmaking appetite was unleashed following the easing of COVID-19 restrictions and lockdowns.

This trend continued during the first half of 2022, when the sector saw a further 12 deals. However, as the impact of the war in Ukraine hit the industry and investor appetite, the latter half of the year saw just three deals. This sluggishness persisted throughout 2023, with Q3 being the only period to see more than two private equity transaction in the sector.

As expected though, the long forecast recovery in the travel sector has helped drive a significant increase in private equity activity, with 14 deals in the first half of the year alone and a sharp uptick in the value of private equity deals in the second quarter.

Analysing the distribution of private equity investment in the sector during Q2, Grant Thornton said that, with half of the quarter’s deals involving the acquisition of corporate travels operators, the business travel sector “has reached a ‘new normal’ post-pandemic.”

The report continued: “Investors targeted businesses with proprietary technology or a niche, like arranging travel for the entertainment industry.”

Notable private equity transactions highlighted in the report included BGF’s investment in global group business travel specialist Vosaio Travel and ECI Partners’ acquisition of entertainment and business travel management provider TAG.

Given these trends, it seems like a safe bet that the post-pandemic return of business travel will be a significant contributor to recovering private equity activity and that many investors will be keen to acquire companies with a strong uptake of new technologies.

Discussing recovering levels of private equity investment in travel, Thomas Barnard said that the sector was one “where private equity has a demonstrable track record, and interest has returned in a manner distinct from the wider consumer sector, where there is a more cautious outlook”, helped by improving lender appetite.

However, Barnard also added that the way the market has taken shape since the COVID-19 pandemic means that the door may have been opened for more strategic investors to provide competition with private equity buyers.

Overall, this would all seem to be extremely positive news for owners at travel companies (particularly those with strong tech uptake or operating in resilient/recovering niche areas of the market), with a wider pool of buyers and growing competition for attractive targets likely to provide a significant boost to valuations.

What about the staycation boom?
Arguably one of the few areas of the travel industry to have actually benefited from the COVID-19 pandemic was the domestic travel market. Amid tight restrictions on international travel, the UK’s “staycation” market experienced a major boom during 2020 and 2021, with stronger demand for UK holidays having persisted even after the easing of restrictions.

Even last year, a Statista survey found that 63 per cent of respondents were planning a holiday within the UK during 2023, compared to just 42 per cent in 2022.

This led to a significant amount of M&A activity and investment in the domestic holiday market, as investors and strategic consolidators snapped up assets such as hotels, glamping sites and portfolios of holiday cottages.

However, amid the broader recovery of the travel sector in 2024, data suggests that the domestic holiday industry has begun to suffer as a result, with the appeal of taking vacations within the UK perhaps waning for many (for example, the over 55’s age group) in the four years since COVID began.

According to data from CoStar Group, bookings for areas including Cornwall, Devon, Dorset and Somerset (typically among the most popular UK travel destinations) were down from their 2023 levels during the key July and August period.

CoStar found that bookings in Cornwall and Devon were down by 8 per cent compared to 2023, while Dorset and Somerset fell 5 per cent and Cumbria fell by one per cent.

Simultaneously, bookings for overseas locations that are generally popular with UK tourists, including Provence-Alps, the Spanish Mediterranean coast, France and Portugal, were seeing stronger occupancy.

CoStar Group’s Director of Hospitality Analytics UK Cristina Balekjian stated that, with normality returning post-COVID, British travellers were looking for warmer destinations and opting for overseas holidays, despite rising travel costs.

Balekjian said that there were additional barriers to domestic travel, including a lack of public transport and the high cost of holidaying in the UK (indeed, it has become something of a social media meme for people to compare the price of flying and holidaying abroad with the soaring cost of rail travel within the UK).

Despite this, Balekjian did highlight some positives, including robust demand for areas such as the Cotswolds, Brighton and Gloucestershire, as well as the strong summer that cities were having amid sporting and musical events.

Ultimately, it is unlikely that the staycation boom of the past few years was just a fad. While the (largely enforced) popularity of domestic holidays in 2020 and 2021 was never likely to sustain for long and travellers with the means to go abroad were always going to yearn for warmer overseas trips when they felt confident in doing so, the market for UK holidays remains stronger than it was pre-pandemic.

The domestic holiday sector may not return to those heights it experienced during COVID, but for many the pandemic will have convinced them that holidaying in the UK is still a viable option. Furthermore, as many travellers begin to seek better value amid the cost-of-living crisis, it is likely that some areas of the domestic market will see strong trading levels – and M&A activity - for years to come.


Host & Stay is a holiday home management firm based in the North East. Founded in 2018 and part of the SDDE Smith Group, the company handles the end-to-end process of holiday home management, with services spanning booking generation, marketing, housekeeping, maintenance and compliance.

In September 2024, Host & Stay secured a £10.5 million investment from Growth Partner and simultaneously acquired two holiday home management businesses, Norfolk Holiday Properties and Airhost for You.

The takeovers, which followed previous acquisitions of companies based in Liverpool and Canterbury, brought more than 230 new properties across Norfolk and Brighton into the business.

Host & Stay has capitalised on the significant expansion of the UK domestic holiday market over recent years, achieving strong year-on-year growth. It plans to continue growing through both a buy-and-build M&A strategy and organic customer acquisition.

Alex Marsh of Growth Partner said the company was “a truly disruptive force in the holiday let and short-term rental management sector” and that it had transformed “from startup into one of the market leader's with over 1,000 properties under management in just five years.”

He added that Growth Partner’s “investment and support “will fuel H&S's buy-and-build strategy as they build towards national coverage."

HomeServe founder and chairman Richard Harpin, who backs Growth Partner, commented: "Host & Stay embodies the entrepreneurial spirit and commitment to excellence that drives true innovation in any industry. Dale Smith and his team have harnessed a unique market opportunity and are poised for tremendous growth. Our backing will support H&S in its journey to set new benchmarks in the holiday let and rental management space."


There is no doubt that the travel sector still faces significant challenges, with geopolitical upheaval and economic turmoil still major concerns, and that the current recovery in dealmaking remains in its infancy.

But with the pandemic having largely receded as a major concern, improved political stability in the UK and some degree of economic improvement, the sector’s underlying fundamentals are strong.

Furthermore, with private equity investors and trade buyers increasingly keen to deploy their funds in order to grow acquisitively and tap into emerging sector trends, it appears that – while still in its early stages – the M&A uptick that travel has seen is only set to continue and grow stronger over the coming months.

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