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M&A deal volumes in the travel sector are on the rise following a post-pandemic boost in holiday demand, according to new research from Grant Thornton UK.
The firm’s research found there were 11 deals recorded in Q3, a 10% increase on the previous quarter and a 38% increase against the same quarter last year.
Private equity (PE) interest in the sector also rose this quarter, accounting for 27% of deals in Q3, compared to 10% in Q2.
According to Grant Thornton, PE deals in the third quarter of the year were characterised by minority investments and fundraisings, demonstrating interest from growth-orientated investors.
Nicola Sartori, partner and head of Consumer and Travel, Grant Thornton UK, said: “Following the rebound in overseas travel in 2022, it looks as if appetite for travel companies is here to stay.
“Passenger confidence is starting to feed through to M&A activity as financial investors and trade buyers become more bullish about the sector’s recovery. Private equity interest is also starting to re-build in the sector, with a notable increase in activity this quarter compared to last.”
She added: “As confidence builds, trade parties are shifting from opportunistic acquisitions into strategic investment, to facilitate continued growth and diversify into new markets. We expect deal activity to pick up further in early 2024 as sellers and buyers – from sole traders to larger corporations – take advantage of the positive momentum in the travel industry.”
