The global travel and tourism industry, which has been struggling to rebound from the COVID-19 pandemic-induced halt is facing another setback with a significant drop in deal activity.
The industry, which relies heavily on investment and strategic partnerships, saw a steep year-on-year decline of 60.4 percent in deal activity in February 2023, revealed by data and analytics company, GlobalData.
An analysis of GlobalData’s Financial Deals Database revealed deal volume in the industry more than halved from 111 deals announced in February 2022 to 44 deals announced during February 2023.
Lead Analyst at GlobalData, Aurojyoti Bose said that the drop will have a preceding effect on all areas it concerns.
“The decline underscores the ongoing uncertainty and challenges including changing consumer behaviour, and economic volatility, faced by the travel and tourism industry. As the market scenario is rapidly changing, with fears of recession investors seem to have become cautious.”
Deal activity fell significantly in most internationally in February, with several of them reporting double-digit falls. Meanwhile, some of the key markets did not see the announcement of even a single deal during the month.
For instance, the United States market, considered to be the top market in terms of deal volume, witnessed a 71.9 percent decline in deal volume in February 2023. Similarly, the United Kingdom witnessed a considerable year-on-year decline in deal volume by 46.2 percent.
Japan, Germany and Spain did not see the announcement of a single deal during the month.
All deal types under merger and acquisition, venture financing and private equity deals also registered a decline in deal volume in February 2023.
The number of venture financing and private equity deals declined by 59.4 percent and 60 percent, respectively, while merger and acquisition deal volume declined by 60.9 percent in February 2023.
Bose regarded this as a stark reminder of the ongoing challenges and uncertainties as the market continues to seek recovery from the pandemic.
“It presents an opportunity to explore new models and partnerships that can drive innovation and growth in the post-pandemic era. As the industry continues to navigate these obstacles, investors should remain vigilant and adaptive to the emerging trends and opportunities.”
