Strategic partnerships rise as high capital costs stall deal-making – hope for a rebound in 2025 grows with easing economic pressures
Apr 1, 2025
2024 was a notably subdued year for mergers and acquisitions (M&A) in the travel, leisure, and hospitality sector, as deal volumes dropped to their lowest levels since 2020, according to a new KPMG report. Economic uncertainty and high capital costs kept many potential mergers on hold. Yet, the industry found alternative ways to grow and adapt – especially through strategic partnerships and loyalty alliances – offering a lower-risk path to collaboration. Signs of economic recovery and easing interest rates toward the end of the year suggest that M&A activity could rebound in 2025, giving the sector a reason for cautious optimism.
Key takeaways
- Deal volume drop: 2024 saw only 875 deals worth $28.2 billion in travel, leisure, and hospitality – a 20% decline from 2023 and the lowest since 2020.
- Shift toward partnerships: Despite fewer M&A transactions, companies pursued strategic partnerships and loyalty tie-ins, especially in markets like Las Vegas, as a lower-risk alternative to full acquisitions.
- Economic pressures: High capital costs were a major barrier to M&A activity throughout most of 2024.
- Mixed trends in hospitality and leisure: While the number of deals in hospitality and leisure rose 5% (to 820 deals), total deal value decreased by 5.7%, to $27.6 billion.
- Notable deal: Standard General LP’s $4.3 billion acquisition of Bally’s Corporation stood out, with Bally’s planning a major casino resort in Chicago.
- Future outlook: Improving economic indicators – like falling inflation and lower interest rates – may fuel a rebound in 2025. A business-friendly political climate and a stabilizing labor market could further support deal-making.
- Strategic focus: M&A goals in the sector include digital transformation, geographic diversification, sustainable practices, and competitive positioning post-pandemic.
Get the full story at Hotel Dive
