Home Travel agency M&A activity in the travel sector is buoyant, particularly in small and medium-sized agencies: Travel Weekly

M&A activity in the travel sector is buoyant, particularly in small and medium-sized agencies: Travel Weekly


Mergers and acquisitions in the travel agency industry have increased in recent months. Motivation to buy or sell varies, but industry watchers see a trend: Most activity is occurring among agencies with annual pre-pandemic sales of less than $ 20 million.

According to GlobalData, transaction activity in the global travel and tourism industry increased 39.6% in June from the previous month, which, according to senior analyst Aurojyoti Bose, “could be a positive sign for the coming months “.

In addition to mergers and acquisitions, there has been an increase in the number of private equity and venture financing deals, GlobalData said.

While GlobalData’s analysis doesn’t just include travel agencies and travel management companies – it extends to travel technology startups, service providers, and hotels and casinos – all indications point to a busy market for travel agencies, both buy and sell side.

Industry lawyer Mark Pestronk, also a columnist for Travel Weekly’s Legal Briefs, said the market started to heat up around February and remained busy.

Marc Pestronk

“I would say the market is really split into two types of acquisitions,” Pestronk said. “One is made up of experienced buyers who are willing to offer prices that are a multiple of 2019’s earnings, more or less, as if the pandemic didn’t exist, and that’s a fairly new phenomenon. The other half are earn-outs, where the price is simply set as a percentage of revenue for, say, 2022 and 2023. “

Pestronk said he has seen deals between agencies of all sizes and types of businesses, with corporate, leisure and mixed agencies selling. He attributed the initial rise in February to optimism about the future of travel and an influx of private capital for larger acquisitions.

Small branch activity on the rise

Robert sweeney

Robert sweeney

Robert Sweeney, CEO of Innovative Travel Acquisitions, said much of the M&A activity he observes involves agencies that have “more than a handful of employees, but less than 100”; in other words, the middle market. They typically had annual sales before the pandemic ranging from $ 4 million to $ 20 million.

Executive search and consulting firm P. Jason King Associates is also seeing activity among agencies in this line. Specifically, said CEO P. Jason King, the bulk of M&A activity takes place among agencies with CRA appointments that make up to about $ 10 million in annual sales.

King said he expected M&A activity to slow as vaccine deployments matured, but that did not happen.

“All those who were [watching the market] and wasn’t sure he would get even more eager to shake things up, ”he said. “It’s both on the buyer’s side and the seller’s side. We are getting a huge number of buyers. “

Robert joselyn

Robert joselyn

Robert Joselyn, CEO of Joselyn Consulting Group, said conversely that he doesn’t see much activity on the leisure side. It has become more complicated to set up deals, especially as many agencies are rich in bookings – but poor in cash – waiting for customers to travel in 2022 or 2023.

Among the transactions he sees, Joselyn said, many payouts are based on price supplements over a period of time. Buyers are reluctant to bear the fixed costs of others, which complicates things when a physical agency wants to sell.

Foreign investment capital is largely fueling the rise in activity on the corporate side, Joselyn said.

But, the leisure offers are still ongoing. Joselyn recently connected Atlanta-based Epperly Travel to Jetset World Travel in Aspen, Colorado. Epperly has acquired Jetset, and the combined agency accounts for $ 25 million in annual sales before Covid.

Interest of foreign investors

A counter-trend to the overall increase in mergers and acquisitions is the declining interest of foreign investors seeking to acquire a US travel agency.

Before the pandemic, foreign interest in acquiring U.S. agencies was common, Pestronk said. But during the height of Covid, he saw that activity decline, likely because these companies were acquisition timid during a time of uncertainty.

“I predict that we will see foreigners come back” to the market, he added.

It may already be there. King said he sees interest from abroad, especially from Europe and the Middle East.

Joselyn predicts a further acceleration in M&A activity, likely in the fall, fueled by growing optimism as the year progresses. However, he warned that uncertainty still reigns, especially as international borders are opening in spurts.

Pestronk predicted that the active M&A environment will continue “for a long time, because there are so many sellers who are fed up with the business because of the pandemic.”

Private equity will also continue to fuel acquisitions, he said, especially as those behind are optimistic about the future of the travel industry.

Sweeney guessed that the increased activity would continue for at least six to nine months. Beyond that, he said, the market will turn in favor of sellers, especially given the recent consolidation.

“Once you can point to your 2022 numbers and say, ‘Here’s what we did,’ then I think early in 2023, sellers are going to take back control,” he said. But, he added, “It’s a buyer’s market right now. There aren’t two ways about it.”


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