Analytics company Globaldata has found that the global travel and tourism industry, while struggling to bounce back after the slowdown brought about by the COVID-19 pandemic, is facing another setback with a drop in deal activity.
It found the industry saw a steep year-on-year 60,4% decline in deal activity in February 2023.
An analysis of GlobalData’s Financial Deals Database shows that deal volume in the industry more than halved from 111 deals announced during February 2022 to 44 announced during February 2023.
Aurojyoti Bose, Lead Analyst at GlobalData, said: “The decline underscores the ongoing uncertainty and challenges, including changing consumer behaviour and economic volatility faced by the travel and tourism industry. As the market scenario is rapidly changing, with fears of recession investors seem to have become cautious.”
Deal activity fell greatly in most countries in February, several of them reporting double-digit declines. Some key markets didn’t see the announcement of even a single deal during the month.
The US saw a 71,9% decline in deal volume in February 2023, while the UK saw a year-on-year decline in deal volume by 46,2%. Japan, Germany and Spain did not see the announcement of 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. 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.
“The decline in deal activity in 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,” said Bose.
