Private equity (PE) firms are accelerating their entry into the global travel and tourism sector, capitalising on a strong post-pandemic recovery, robust demand, and attractive market conditions.

According to GlobalData’s Deals Database, the second quarter of 2024 alone saw 14 PE deals in Europe’s tourism and leisure sector, collectively valued at $822.9 million (€724.4m). One of the standout transactions was the £400 million (€466.7m) acquisition of Landsec’s hotel portfolio in the UK by Ares Management Corporation and operating partner EQ Group.

Experts attribute this resurgence to a combination of pent-up travel demand and strategic investment opportunities that emerged during the COVID-19 crisis. “Private equity activity in the travel sector now accounts for approximately 40% of UK travel M&A in 2024,” said Andrew Keller, Director at Stax Consulting. “There’s a strong focus on tech-enabled and experiential travel businesses, with many firms adopting ‘buy-and-build’ strategies.”

This trend is particularly evident in sectors like hotels, resorts, restaurants, and tour operators, which have attracted substantial investment. Graham Miller, of the Nova School of Business & Economics, noted that tour operators and restaurant groups have also become prime targets for PE funding.

Dr. René-Ojas Woltering of EHL Hospitality Business School points to favourable demographic and supply-side trends, including affluent baby boomers entering retirement and the high cost of building new hotels, as key drivers behind PE’s growing appetite.

“Private equity firms thrive on market dislocations,” Woltering said. “The COVID-19 crisis presented a rare window for acquiring undervalued assets in travel — and many firms are now reaping the rewards.”

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