Travel M&A review: Winter 2024
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Travel M&A continues to soar
Households are continuing to prioritise holidays despite squeezed budgets, causing investors to back the sector. Nicola Sartori reviews a bumper year for travel M&A and explores the trends that will drive dealmaking in 2025.
By Nicola Sartori
Back in 2022, we released data showing that financially-pressed consumers were prioritising holidays above other household spending. That trend has firmly held, with research from trade association ABTA showing that more than two-thirds of UK households plan to travel abroad in 2025.
The ongoing consumer commitment to travel is reflected in soaring M&A, as buyers and lenders view the sector as increasingly robust.
Source: Mergermarket
At the beginning of the year, our conversations with clients on both sides of M&A indicated that confidence in the travel sector had returned.
As the year progressed, deals took longer than expected as investors carried out stringent due diligence while companies experienced changes in booking patterns and waited for clarity on the UK economy and the results of global elections.
We saw a jump in Q4 numbers as those deals completed, suggesting travel M&A has finally returned to full swing.
Travel deal volumes continue upward march
Announced M&A activity in travel and accommodation quarterly (UK targets or acquirors)
Source: Mergermarket
2024 ended on a high, with Q4 deal volumes up 15% on the previous quarter and a striking 130% on the same quarter last year.
This took annual deal totals to 79, almost double 2023 numbers and the busiest year since we began monitoring activity in 2018.
The number of transactions involving trade buyers continued to grow as travel companies had breathing space to focus on strategy after years of responding to the upheaval of the global pandemic.
Meanwhile, 2024 was a quiet year for UK IPOs, including travel. Indeed, the biggest public markets' event for the sector was TUI's delisting from the London Stock Exchange (LSE) in June.
Private equity's record involvement
Private equity (PE) involvement in travel M&A increased by 57% in Q4 2024 compared to Q3 2024 (11 v seven deals) and leapt 450% compared to the same quarter last year.
In 2024 as a whole, PE was responsible for 40% of travel M&A, compared to 22% in 2023. Its confidence in the sector can be summed up by KKR's statement on its acquisition of 33 UK hotels in December.
"Our purchase…reflects our conviction in the UK and the opportunity we see to invest behind strong fundamentals and long-term growth in the European hospitality sector," a KKR spokesperson said.
PE targets growth opportunities
We were pleased to support our client, Soho Square, in its growth investment in Newmarket Holidays in October 2024. The UK-based escorted tour operator’s fastest-growing segment is long-haul tours, including destinations like Zimbabwe and India. We provided buy-side financial and tax due diligence support.
Smaller deals helped drive Q4 PE volumes
PE demonstrated its confidence in existing travel assets with bolt-on deals in Q4 2024 while banking on growth with minority stakes.
Artisan Travel Holdings buys Travel Editions
In November 2024, tailor-made tour operator Artisan Travel Holdings acquired Travel Editions, provider of escorted tours on art and history. Panoramic Growth Equity backs Artisan, which operates a stable of travel brands, including The Aurora Zone, dedicated to trips to see the northern lights.
VOSAIO buys Operation Europe
In November 2024, VOSAIO acquired fellow B2B group-travel service provider Operation Europe. In May 2024, BGF took a multi-million minority stake in VOSAIO.
Host & Stay continues acquisition strategy
In November 2024, short-term rental management company Host & Stay continued its buy-and-build strategy with the purchase of Peak Staycations and Peak Cottage Management, its fifth acquisition of the year. Growth Partner took a £10.5 million minority stake in Host & Stay in September 2024.
Financial investors back B-Corps
Two deals involving B-Corps reflect growing consumer demand for socially responsible travel.
Gresham House buys Much Better Adventures
In December 2024, UK-based Gresham House invested in Much Better Adventures, a B-Corp active outdoor adventure specialist with a focus on "lower-impact" travel. Much Better Adventures partners with local, independent tourism businesses. Gresham House is also an investor in TravelLocal, which connects consumers with experts in their chosen destination.
Inside Travel Group completes MBO
In November 2024, Piper Private Equity and Japanese sovereign wealth fund Cool Japan backed the MBO of Inside Travel Group, a B-Corp which specialises in Asia-focused travel adventure. The group's InsideJapan and InsideAsia brands promise access to "off-radar sites and hands-on experiences".
A strong year-end for travel and tour operators
Hotels
Source: Mergermarket
Travel
Source: Mergermarket
In Q4 2024, the majority (56%) of transactions involved travel and tour operators, with hotels accounting for 44% of activity.
Domestic deals dominate
Investment in the UK was down slightly in Q4 2024 compared to Q3 2024
Overseas investment in UK assets accounted for 35% of deals, compared to 40% in Q3 2024
- UK-based entities buying overseas assets accounted for 13% of deals, in line with Q3 2024
- Domestic-to-domestic was the most popular transaction type, accounting for 52% of all deals compared to 45% in Q3 2024
Q4 cross-border deals
Gray Dawes continues acquisition spree
In November 2024, UK-based travel management company Gray Dawes Group acquired Australia's Verve Travel and Leisure. This is Gray Dawes's sixteenth acquisition in recent years as it executes an impressive buy-and-build strategy. In 2024, it also bought Dutch firm VCK Travel.
US firm scoops up gap year specialist
In October 2024, America's International Training and Exchange (Intrax) bought 360 Gap, a UK-based gap year specialist. Intrax specialises in cultural and educational exchanges, such as working holidays in the USA, internships, camp counsellor placements, and high-school exchanges.
Talma increases UK footprint with Blue Cube deal
In October 2024, Israel-based Talma Travel Solutions acquired UK business travel management company Blue Cube to bolt on to its previous UK acquisition, Norad, which it acquired in March 2022.
Hotels
Hotel deal volumes – 2024 v 2023
There were 29 deals in 2024 compared to 21 in 2023.
Q4 hotel deal volumes
There were eight hotel deals in Q4 2024 compared to nine in Q3 2024 and seven in the same quarter last year.
Q4 hotel deals
- In December 2024, a joint venture between KKR and Baupost purchased 33 Marriott International Hotels in the UK from ADIA, a subsidiary of the Abu Dhabi Investment Authority.
- In November 2024, Trinity Investments, Oaktree Capital Management and Partners Group acquired the 266-room Standard Hotel in London.
- In October 2024, Singapore-based hospitality group CDL Hospitality Trusts acquired Hotel Indigo Exeter. The 104-room hotel was converted from a former House of Fraser store.
- In October 2024, a consortium including US singer Pharrell Williams, Cyprus-based Mohari Hospitality, and the UK's Omnam Group acquired the 5-star Hôtel Saint-James & Albany in Paris.
Five 2025 travel M&A trends
1- Niche is nice
Throughout 2024, PE gravitated towards niche travel companies, specialising in passenger type (groups, students, mature travellers, etc) or purpose (sports events, history, gap years, etc). PE and lenders are attracted to these assets for their typically higher margins, and the trend shows no sign of slowing in 2025.
Leading the trend – going for goals
In October 2024, Compass Group's sports hospitality firm, Keith Prowse, acquired Gullivers Sports Travel to expand its stadia tour and events business. Gullivers partners include Welsh Ruby Union, Royal Ascot, and England's international cricket tours.
2- Tailor-made luxury
Luxury travellers are significantly more likely to book holidays through specialist operators compared to non-luxury travellers (51% vs 34%), according to Mintel. Meanwhile, research from Vamoos shows that 85% of luxury travellers say that working with travel experts is the only way to have a true luxury travel experience. We expect investors to continue to chase luxury agencies in 2025 for these reasons.
3- AI's silent influence
Research from ABTA shows that consumers aren't rushing to AI bots to book their breaks, with 27% of people (including younger generations) still leafing through holiday brochures for inspiration.
However, investors will be seeking companies that are making clever use of customer-facing and behind-the-scenes technology, such as predictive analytics, to optimise pricing strategies, forecast demand, and improve route planning.
4- Return of mainstream private equity houses
Since the beginning of 2023 when the industry was still reeling from the pandemic, deals have been dominated by smaller private equity houses investing in minority stakes.
However, throughout 2024, we’ve seen more mainstream PE-players return to the table using bolt-on deals to build existing platforms. They’ll be further encouraged by a slowly improving UK economy, which means debt is becoming cheaper and covenants and conditions are improving.
5- Continued demand for experience-led travel
Booking.com identified 'noctourism' as a trend for 2025. The portmanteau of 'nocturnal + tourism' refers to booking night-time experiences, such as the northern lights or cooler climates. This is just one example of the broader trend for experience-led holidays that drove M&A in 2024, and we expect it to continue in 2025.
InsideJapan, for example, offers trips that "get beneath the surface" of destinations by offering a menu of hands-on local experiences under categories like anime, food and drink, philosophy, and sport.
Raring to grow
Last year’s deal data shows a sector that has bounced back stronger from pandemic upheaval and is raring to grow. We expect this momentum to continue in 2025.
