The global travel and tourism industry experienced a notable decline in deal activity from January to August 2023, marking a substantial year-on-year decrease of 36.2 percent compared to the same period in 2022. This decline spanned various deal types, including mergers and acquisitions, private equity, and venture financing, with economic uncertainties and geopolitical tensions playing a significant role in shaping this trend, finds GlobalData.
An analysis of GlobalData’s Financial Deals Database revealed that a total of 482 deals were announced in the global travel and tourism industry compared to 756 deals announced from January to August 2022. The volume of mergers and acquisition deals declined by 37.8 percent, while the number of private equity and venture financing deals declined by 38.1 percent and 30.8 percent year-on-year, respectively.
Aurojyoti Bose, Lead Analyst at GlobalData, said the decline was due to a collection of many factors.
“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 travel and tourism deal activity across many countries,” said Bose.
In fact, several key markets witnessed a double-digit decline in deal volume from January to August 2023 compared to the same period in 2022. For instance, the United States, the United Kingdom, Australia, France, Japan, the Netherlands, and Canada witnessed deal volume decline by 47.2 percent, 45.3 percent, 20.8 percent, 13.6 percent, 62.5 percent, 31.3 percent and 33.3 percent year-on-year, respectively, during January to August 2023.
India and China also registered a 6.3 percent and 3.3 percent decline in deal volume during the January to August period of 2023, compared to the same period in 2022.
“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 stabilises.”
