Merger and acquisitions activity in travel and tourism industry continued to fall in January 2023
Global market research and analyst firm GlobalData says that challenging global economic conditions and their implications reflected their impact on the travel and tourism sector’s deal activity in the first month of 2023.
In a press statement, the GlobalData says that a total of 38 deals, comprising merger and acquisition, venture financing and private equity deals, were announced in the sector globally in January 2023, which is a decline of 42.4 pc in terms of deals volume compared to the previous month, reveals GlobalData, a leading data and analytics company.
Aurojyoti Bose
“Deal-making sentiment in the global travel and tourism sector appears to have been heavily impacted by current geopolitical tensions and recession fears. Deal volume in several leading economies experienced considerable slowdown, which contributed to the overall decline,” says Aurojyoti Bose, Lead Analyst at GlobalData.
The statement adds that an analysis of GlobalData’s Financial Deals Database shows that key markets such as the US, the UK, China, Australia, and Japan experienced a decline in deals volume in January 2023 compared to the previous month.
“As deal-making sentiment took a hit in most of the key markets, all the deal types under coverage also experienced a decline,” adds Bose.
The statement adds that there was a decline of 36.8 pc, 50 pc and 50 pc in the number of merger and acquisition deals, venture financing deals, and private equity deals announced during January 2023 compared to the previous month, respectively.
The fall in January 2023 marks a continuation of the trend in 2022 when GlobalData registered a decline of 29 pc in total deal value to USD 2.8 trillion from the USD 3.9 trillion reported across all industries in 2021. The firm says that total deals count also fell by 6 pc, from 39,170 in 2021 to 36,704 in 2022 across all industries.
The market slowdown in 2022 also impacted the number of mega deals worth over USD 1 billion each. A total of 497 mega deals were completed, compared to the 835 mega deals reported in 2021.
“A combination of factors including higher debt costs, declining equity markets, and economic uncertainty are driving the slowdown in the M&A market. When the dot-com bubble burst, M&A volumes fell by 50 pc. The declines to date have not been so steep, but the outlook remains uncertain and deal activity is likely to remain subdued at least in the first half of 2023,” says Shri Charan Padala, Principal Analyst, Thematic Intelligence at GlobalData.
