Merger and acquisition activity in the travel industry is slowing down due to market volatility.

M&A activity in the travel industry is experiencing a shift as deals are taking longer to finalize amidst market fluctuations. One notable event that exemplifies this trend is the decision by 3i Group to delay the sale of Audley Travel. The global stock market turbulence, partly due to the impact of President Donald Trump’s tariffs, has contributed to the uncertainty surrounding company valuations within the travel sector.

Despite these challenges, industry experts and M&A advisors indicate that there is still significant interest in travel-related acquisitions. However, transactions are now characterized by extended timelines and more rigorous due diligence processes. Martin Alcock, Director of Travel Trade Consultancy, noted that the pace of transactions has slowed down in the current year, partly attributed to the external factors like the uncertainty surrounding the US administration. He stated that while ongoing deals are progressing, there is a noticeable increase in the meticulous scrutiny of assumptions and details, leading to a lengthier process.

Henry Wells, the head of consumer affairs at Cavendish, echoed similar sentiments, acknowledging that uncertainties in the market environment pose challenges for deal-making. Nevertheless, he remains optimistic about the future of M&A activities in the travel sector, particularly for high-quality businesses. Wells emphasized that despite the prolonged duration of transactions, there are still opportunities for buyers who demonstrate conviction and diligence in their decision-making processes.

Christopher Jones from Clearwater highlighted the evolving landscape of travel deals, noting that the industry is currently witnessing a surplus of sellers in comparison to buyers. This imbalance, coupled with factors such as tariffs and economic uncertainties, has made the deal-making environment more complex. Jones emphasized the importance of differentiation for businesses aiming to attract investment and navigate the challenges of the current market conditions.

Nicola Sartori, leading the consumer industries division at Grant Thornton, emphasized that despite the nuances of the current market, there has been a consistent level of deal activity in the small to mid-sized market segment. While the delay in the Audley Travel sale was attributed to market volatility stemming from US trade policy, Sartori emphasized that this was an exception rather than the norm. Overall, there is sustained interest from various entities including corporates, private equity firms, and PE-backed trade buyers, albeit with extended timelines compared to previous standards.

In conclusion, the travel industry is experiencing a period of transition in M&A activities, characterized by increased complexity, extended timelines, and heightened diligence requirements. While market uncertainties and external factors pose challenges, there remains a strong interest in acquiring travel businesses, particularly those with unique value propositions and differentiation strategies. The ability to weather the current market conditions and demonstrate conviction in deal-making processes will be crucial for businesses seeking to navigate the evolving landscape of M&A in the travel sector.