GlobalData reveals that during the first five of months of 2023, the travel and tourism industry witnessed a massive 41 per cent year-on-year (YoY) decline in deal activity from 475 deals between January and May 2022 to 282, including mergers and acquisitions (M&A), private equity, and venture financing deals.
Commenting on the decline, GlobalData’s lead analyst Aurojyoti Bose said that it indicates “dampened sentiments and cautious approach of investors” and that the “ongoing uncertainties and impact of the geopolitical tensions, inflation and recession fears have forced deal makers to adopt a more conservative approach”.
All the deal types under coverage registered decline in volume. For instance, M&A deals volume decreased by 43 per cent while the number of venture financing deals and private equity deals YoY declined by 34 per cent and 44 per cent, respectively, between January and May 2023.
“The industry also witnessed a substantial YoY decline in deal activity across most of the regions worldwide during the period,” added Bose.
North America experienced a decline of 48 per cent in deals volume between January and May 2023 compared to the same period during the previous year, while Europe, Asia-Pacific, as well as South and Central America regions registered decline of 49 per cent, 27 per cent and 36 per cent, respectively.
Meanwhile, deals volume for the Middle East and Africa region remained unchanged.
The US, the UK, India, France, Australia and Japan witnessed significant YoY decline of 48 per cent, 48 per cent, 33 per cent, seven per cent, 29 per cent and 54 per cent, respectively, in deals volume from January to May 2023.
Bose concluded: “On the other hand, easing of travel restrictions seems to be encouraging Chinese travellers. As a result, China stood out as a notable exception and registered a 19 per cent YoY growth in the number of deals announced during the period.”