GCA becomes part of Houlihan Lokey

Insights

The winning categories remain those consistent with the new normal of avoiding high “stranger volume”: private mobility, short term rental, camping, RV rental and outdoor activities

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Sector Report: Travel and Hospitality Technology September 2021

EXECUTIVE SUMMARY

Trends & Drivers

  • In an unwelcome continuation of 2020, travel and hospitality in 2021 has been dominated by the global pandemic
    • International travel remains at a fraction of its former levels, with many commentators now expecting a return to 2019 volumes to be delayed until 2024 at the earliest
    • Domestic travel has fared better, although the debate has changed to if, rather than when, corporate travel fully recovers
    • The winning categories remain those consistent with the new normal of avoiding high “stranger volume”: private mobility, short term rental, camping, RV rental and outdoor activities
  • Announced M&A activity has been dominated by SPAC mergers, largely within these winning segments
    • Grab (private urban mobility), Vacasa and HomeToGo (short term rental) went public via SPACS with an aggregate valuation approaching $50Bn with Grab and HomeToGo both at double digit revenue multiples
    • By contrast HotelPlanner/Reservations.com brought together two hotel distribution technology providers at a low to mid single digit revenue multiple
  • Financing activity was more broadly spread, with notable raises from Hopper (next gen OTA), Bolt (urban mobility), Outdoorsy (RV rental), Flixbus (long distance bus ticketing) and TravelPerk (corporate travel)
  • Looking forward, uncertainty looks set to remain the only constant. This in turn implies low capital intensity, high flexibility business models will remain in high demand from the investment community. When the cycle truly turns there will be high beta gains among the more operationally geared travel sector participants but few feel able to judge when that point will be
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