Mergers and acquisitions in the global hospitality industry has declined year-on-year so far in 2025, according to a new PwC report.
Using S&P Global Market Intelligence data, PwC in its midyear M&A outlook determined that the total value of deals in the hospitality and leisure sector completed by 15 May 2025 were valued at a total of around $4 billion - less than half the value of such deals in the first half of 2024.
PwC cited several factors for the M&A slowdown, including "high borrowing costs, valuation mismatches and policy uncertainty".
“Tariff uncertainty and trade headwinds are complicating cross-border activity,” said PwC. “Domestic-focused [US] and service-oriented [hospitality and leisure] operators remain better positioned for dealmaking.”
Hospitality and leisure deals backed by private equity investors have particularly slowed in 2025, according to PwC. Private equity-backed deals comprised 7 per cent of total hospitality and leisure transactions in the first four-and-a-half months of 2025, compared with a figure of 43 per cent during the same period of last year.
PwC said this indicates "financial buyers have largely stayed on the sideline, while strategic players remained active for strong assets".
Looking ahead, PwC suggested prolonged economic volatility could bring more underperforming hospitality assets to the M&A market, while "clarity on interest rate policy and trade developments" could "shape valuation confidence, transaction pacing and ultimately consumer sentiment toward travel".
Some of the major US-based hotel companies have still been busy with acquisitions this year, with Hyatt Hotels Corp last week completing the purchase of all-inclusive resort chain Playa Hotels & Resorts for $2.6 billion, while Marriott International has announced a deal to buy Netherlands-based independent brand CitizenM in a $355 million deal.