31.6 million

ATOL protected package holidays sold for the year to September 2024, exceeding the pre-COVID peak of 28 million

£63 billion

Expected 2023 holiday spend by UK residents

Source: Mintel & Travel Trade Consultancy    

The atmosphere at Travel Weekly’s Globe Travel Awards a few weeks back cemented for me the outlook of a sector with COVID in its rearview mirror. Talk has moved from 'resilience' to 'growth', and 'challenge' to 'opportunity'.

UK consumers are driving the change by prioritising travel spend, against a still challenging economic environment, by booking package holidays in record numbers and spending billions on getaways. The result was a positive return in 2023 for travel M&A, in which 40 deals crossed the line.

2023 is arguably the first year in which post-pandemic bounce back hasn't influenced travel activity. The absence of this external factor in 2023 trading data means buyers and sellers can enter talks with clarity on underlying business performance.

We’re seeing this momentum continue into 2024. Several deals have already completed in January, and our M&A and due diligence teams are strapping in for a busy 2024.

Announced M&A activity in travel and accommodation by quarter (UK targets or acquirers)


Nine deals in the final quarter of 2023 ensured the year for travel sector M&A finished on a high. They brought 2023's deal volume to 40, reflecting returning confidence in the sector. Although this annual total appeared down on 2022 and 2021, those years were artificially boosted by distressed or stressed deals and UK hotel deals.

The total value for 2023 deals with publicly disclosed financial information stood at £1.29 billion. This is a drop from the £4.90 billion reported in 2022 but close to the £1.36 billion achieved in 2019.


Key Q4 2023 travel deals


Subsector spotlight

Buyers target hotels

Hotels remained the most popular subsector in Q4, representing 67% of deals. Five of the six transactions involved overseas buyers from Saudi Arabia, Spain, Ireland, Norway, and the USA, respectively.

Compared to other real estate subsectors, where rents are often fixed for years at a time, hotels are attractive because room rates can be varied daily to reflect inflation. The gap between seller and buyer price expectations has also narrowed, as interest rates have – at least for the time being – plateaued. This enables deals that work for both parties.

Many 2023 hotel acquisitions were the first step in development plans to build a portfolio or to invest significant time and money into repositioning properties for a niche, such as the leisure market. Buyers with the funds to execute this strategy will continue to seek suitable assets, driving deal activity in 2024.


Private equity interest

2023 was also the year we saw mainstream private equity return to investing in the travel sector.  Although private equity only accounted for two deals in Q4, their appetite to invest in the sector has returned and they are looking for opportunities to deploy capital.


Travel trends

In addition to a strong appetite for hotels, we should see the following factors drive deals in 2024:

Three reasons we'll see more travel deals in 2024

1 Clear post-pandemic data

In 2022, travel companies posted strong results, and emerging 2023 trading data proves that these weren't just a post-COVID bounce, giving trade buyers and private investors the green light to invest.

2 Private equity seeks exits

The pandemic severely disrupted the typical three-to-five-year exit cycle for private equity-owned businesses. Those who acquired assets prior to 2020 are now assessing their options, for what are now (in many cases) proving to be high-performing assets.

3 Trade appetite remains strong

Trade buyers were responsible for 75% of transaction activity in 2023, reflecting that travel companies are no longer hunkering down but growing through strategic mergers and bolt-ons.


For more insight and guidance, get in touch with Nicola Sartori.