Mergers and Acquisitions in Travel and Tourism Industry in 2020 - Thematic Research

Summary

In 2019, tourism accounted for 7% of global trade. The United Nations projects that export revenues from tourism, which supports one in 10 jobs globally, could fall by $910bn to $1.2tn in 2020. This worldwide blow to tourism revenues created by COVID-19 has meant that nearly all tourism related companies have had to dramatically reduce spending in order to navigate through this pandemic, resulting in reduced M&A activity.

This report starts with a specific deep dive in to M&A activity in H1 2020. Deal frequency, value and rationale will be compared between Q1 and Q2 2020, alongside H1 2019 and H1 2020, assessing how the pandemic has altered activity between these fiscal periods. Announced deals between January 2020 and August 2020 are then examined to provide a contemporary analysis, assessing which sub-sectors and countries are experiencing the most activity in terms of deal volume and value. COVID-19’s direct impact on M&A activity is then outlined and T&T themes are connected to M&A deals that have been announced between 12 September 2019 to 31 August 2020, in order to provide continuity from the last T&T M&A report. Future M&A deals are then discussed, along with the likelihood of them being completed in order to conclude with a forward-looking perspective.

The regular inclusion of particular themes can highlight the direction in which a particular sub-sector may be moving, such as the re-occurring mention of personalization in passenger transportation M&A deals.

Key Highlights

• 19 M&A deals have been confirmed within the lodging sub-sector from January 2020 to August 2020. However, the sub-sector with the highest deal value in this time period is passenger transportation, with announced deals amounting to $3.9bn. A key contributing deal towards this figure was an acquisition that had to be initiated directly because of COVID-19’s devastating impact on travel demand.
• In May 2020, Deutsche Lufthansa AG was informed by the Economic Stabilization Fund (WSF) of the Federal Republic of Germany that its stabilization package had been approved, worth $326.9m. The WSF stated it will subscribe to shares by way of a capital increase in order to build up a 20% stake in the share capital of Deutsche Lufthansa AG.
• Major companies are fiercely competing for returning demand as domestic and international tourism starts to re-open in many destinations. Smaller lodging companies may have no choice but to listen to offers from larger competitors, as they may not have the cash reserves available in order to navigate successfully through the pandemic.
• Travelers will stick to what they know best as the ‘fear factor’ around COVID-19 will still be present in the medium term. Bigger brands will be more likely to convince consumers that they can offer familiarity and safety over independents or smaller scale hotel companies. This factor, amongst others, may spur M&A activity and consolidation within the sub-sector.
• As COVID-19 redefines business priorities, it is important for companies to focus not only on the themes that are important for the short-term but also invest in themes that would enable them to become more resilient and responsive in the longer term. Generally speaking, COVID-19 has considerably hastened the shift towards digitalization across several industries.
• There has been an increased demand for laptops, broadband, and video conferencing. Post-COVID-19, many businesses will continue to use these technologies as their employees and customers become more accustomed to working remotely, which will impact specific types of tourism, such as MICE tourism.

Scope

• This report provides a comprehensive overview of the T&T M&A market.
• This reports assesses the impact of COVID-19 on M&A activity and how the pandemic has disrupted certain deals.
• This report identifies the main themes contributing to M&A activity between 12 September 2019 to 31 August 2020.
• We highlight companies involved in recent M&A activity in T&T, such as Asiana Airlines Inc, HDC Hyundai Development Company, Deutsche Lufthansa AG and Yatra Online Inc.

Reasons to Buy

• Understand the T&T M&A market.
• Assess the themes that are driving M&A activity in T&T.
• Discover how the impact of COVID-19 is disrupting deal activity in T&T.
• the publisher's thematic research ecosystem is a single, integrated global research platform that provides an easy-to-use framework for tracking all themes across all companies in all sectors.
• It has a proven track record of identifying the important themes early, enabling companies to make the right investments ahead of the competition, and secure that all-important competitive advantage.