This decline spanned various deal types, including mergers and acquisitions (M&A), private equity, and venture financing, with economic uncertainties and geopolitical tensions playing a significant role in shaping this trend, finds GlobalData, a leading data and analytics company.
An analysis of GlobalData’s Financial Deals Database reveals that a total of 482 deals were announced in the global travel and tourism industry compared to 756 deals announced during January-August 2022. The volume of M&A 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 YoY, respectively.
Aurojyoti Bose, lead analyst, GlobalData, commented, “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.”
In fact, several key markets witnessed double-digit decline in deals volume during January-August 2022 compared to the same period in 2022. For instance, the US, the UK, Australia, France, Japan, the Netherlands, and Canada witnessed deals 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 YoY, respectively, during January-August 2023.
India and China too registered 6.3 percent and 3.3 percent decline in deals volume during January-August 2022 compared to the same period in 2022.
Bose conclude by saying, “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.”