The global travel and tourism industry, which has been struggling to rebound from the COVID-19 pandemic induced slowdown, is facing another setback with a significant drop in deal activity. The industry, which relies heavily on investment and strategic partnerships, saw a steep year-on-year (YoY) 60.4% decline in deal activity in February 2023, reveals GlobalData.
An analysis of GlobalData’s Financial Deals Database reveals deal volume in the industry more than halved from 111 deals announced during February 2022 to 44 deals announced during February 2023.
Aurojyoti Bose, Lead Analyst at GlobalData, comments: “The decline underscores the ongoing uncertainty and challenges, including changing consumer behavior, and economic volatility, faced by the travel and tourism industry. As market scenario is rapidly changing, with fears of recession investors seem to have become cautious.”
Deal activity fell significantly in most of the countries in February with several of them reporting double-digit declines. Meanwhile, some of the key markets did not see the announcement of even a single deal during the month.
For instance, the US, which happens to be top market in terms of deal volume, witnessed 71.9% decline in deal volume in February 2023. Similarly, the UK witnessed considerable year-on-year decline in deal volume by 46.2%. Meanwhile, Japan, Germany and Spain did not see the announcement of even a single deal during the month.
All deal types under the coverage (merger and acquisition, venture financing and private equity deals) also registered decline in deal volume in February 2023. The number of venture financing and private equity deals declined by 59.4% and 60%, respectively, while merger and acquisition deal volume declined by 60.9% in February 2023.
Bose concludes: “The decline in deal activity in the the travel and tourism industry is a stark reminder of the ongoing challenges and uncertainties as it seeks to recover from the pandemic. However, it also presents an opportunity to explore new models and partnerships that can drive innovation and growth in the post-pandemic era. As the industry continues to navigate these obstacles, investors should remain vigilant and adaptive to the emerging trends and opportunities.”