After being hit particularly hard by COVID, the hospitality industry is benefiting from exploding travel demand highlighted by a recent resurgence in business travel. In January of 2023, U.S. revenue per available room ("RevPAR"), the industry's most watched KPI was 27% higher than its January 2019 level – a meteoric rebound from 80% lower in March of 2020, which has held up well despite macro rumblings.
However, after cutting to the bone during COVID, hoteliers find themselves struggling to cost-effectively deliver in the current tight labor market and inflationary environment. The solution: technology. As the industry completes its transition from life support to profitability, technology is playing an important role in driving efficiency on two primary fronts: operational optimization, solutions that help hotels to ensure service consistency, manage costs, and do more with less (headcount in particular); and demand generation, platforms that enable hoteliers to drive direct bookings revenue, recapture distribution from OTAs and optimize their pricing strategies.
Against this backdrop, PEs and strategics are indulging in the industry's re-opening with a frenzy in deal making. Hospitality tech M&A is tracking at 81 deals for $14.6B in 2023, headlined by Blackstone's $4.6B acquisition of Cvent in March. This trend is set to continue to accelerate both at AGC, where we have several assets in market and coming soon, and across Wall Street where we expect to see a record number of marquee companies trade hands over the next 24 months. Below is a link to the report. Please feel free to reach out with any questions or comments.
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