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M&A activity in the travel, leisure, and hospitality (TLH) sector remained subdued throughout 2023 as companies and investors contended with difficult financing conditions amid high interest rates. The annual total deal value and volume in the TLH segment hit a record low, with the number of deals dropping by 21 percent to 888. As a result, companies are adopting unique strategies to land new customers and improve product offerings. 

• Pursuing innovative deals for market expansion: Buyers unable to make large acquisitions are pursuing smaller, unique deals to expand into new markets. With interest rate cuts, a buying spree could be on the horizon.
• Growing through creative partnerships: Companies are focusing on organic growth through strategic alliances and partnerships, such as loyalty programs and omni-channel experiences, which extend distribution and create lasting customer value. 

While a softer economy and potential rate cuts in 2024 could breathe new life into the TLH M&A market, dealmakers must consider the impact of financing rates, the Federal Reserve's decisions, and tight labor markets when making investment choices. Ultimately, it is the leisure spender’s power that will likely cater to consumer tastes and evolving demands within the TLH sector. 

To gain more insights on the emerging M&A trends in TLH and the key considerations for driving growth in this market, download our paper, “Getting creative: M&A trends in Travel, Leisure, and Hospitality.�