Industry Mergers and Acquisitions on the Rise

mergers and acquisitionsMergers and acquisitions in the hospitality and meetings industries appear to be having a growth spurt lately.

The pandemic may have put a damper on the mergers and acquisitions front in some business sectors, but recent moves and forecasts for the near future indicate M&A may be picking up in the meetings and hotel industries.

Hospitality Mergers and Acquisitions: Let’s Make a Deal

Beginning last summer as vaccination levels began to rise in the U.S. and people began to emerge from their COVID cocoons, leisure travel — and business travel from small- and medium-sized companies — brought in much-needed cash flow on the hotel side, especially from drive-in markets. But the 2021 M&A scene for hotels outpaced recovery, which is expected to reach pre-pandemic levels by the end of 2022.

According to a recent LW Hospitality Advisors’ survey, major hotel sales in the fall of 2021 hit $14.4 billion, a steady increase from $4.66 billion in Q2 and $8.1 billion in Q1 2021. Compare this to the dismal year in 2020, when hospitality deals were down 52% from 2019 with a total transaction volume of $5.3 billion, as opposed to $177 billion before the pandemic struck.

Of course, the 2021 numbers included some major deals, such as the Las Vegas Sands Corporation selling its two Las Vegas properties — The Venetian Resort Las Vegas and the Sands Expo and Convention Center for about $6.25 billion last spring. Other big hotel, casino and resort deals included Blackstone’s sale of The Cosmopolitan in Las Vegas for $5.65 billion to a partnership between the Cherng Family Trust, Stonepeak Partners and Blackstone Real Estate Income Trust, with MGM Resorts International taking over the lease and operations of the resort for $1.625 billion. The $3.9 billion sale/leaseback deal for  the Aria Resort & Casino and Vdara Hotel & Spa in Las Vegas also helped pump up the M&A numbers in 2021.

Another big deal was Hyatt Hotels Corp.’s $2.7 billion acquisition of Apple Leisure Group (ALG), which will operate as a distinct business unit within Hyatt and doubles the chain’s resort portfolio. ALG includes the AMR Collection of 100 hotels and resorts in 10 countries, as well as 24 new projects in the pipeline in the Americas and Europe. AMR brands include Secrets Resorts & Spa, Dreams Resorts & Spas, Breathless Resorts & Spas and Zoëtry Wellness & Spa Resorts, as well as the fast-growing Alua® Hotels & Resorts brand.

The activity on the hospitality side is likely to continue heating up in 2022. Ashford Hospitality Trust President and CEO Rob Hays, speaking at the NYU International Hospitality Industry Investment Conference, said the money raised for hotel deals could be the most equity capital ever to exist in the hotel industry.

The upshot? As hotel and travel watchdog Skift reports, expect a hotel deal-making deluge this year.

Travel and Infrastructure M&A Also on the Rise

Transportation and travel companies also are getting more M&A action these days. While some of these deals fly under the radar of most meeting professionals, such as Dublin-based AerCap’s acquisition of its U.S. rival in the aircraft lessor space, GE Capital Aviation Services, in November, others bear paying attention to. One such is Blackstone and Starwood Capital’s takeover of  Extended Stay America for $6 billion, which according to Skift was the third largest travel-related acquisition of the year. Rental car companies also weren’t immune to M&A fever, one example being Certares, Knighthead and Apollo outbidding the competition at auction to lead U.S.-based Hertz out of bankruptcy in a deal worth about $4.7 billion.

But one of the more significant deals to go down in 2021 in the travel management company sector was American Express Global Business Travel’s snapping up of Egencia from Expedia last May and its acquisition of Ovation Travel Group in January 2021. While the terms of the deals were not disclosed, Eric Bock, GBT’s Global Head of Mergers and Acquisitions, said after the deal to acquire Ovation went through early last year, “Despite the pandemic, GBT continues to execute on its strategy to grow organically and through acquisitions in the U.S. small and medium enterprise (SME) segment. This acquisition adds a very high-quality asset and business that will enhance the service and capabilities we offer customers.”

Meetings and Tech M&As

M&A in the meetings industry — notably in the tech sector — also have been heating up lately. Event tech company Bizzabo, flush with $138 million it raised in a Series E round, has been a busy buyer as it looks to expand its hybrid events platform. Among its recent acquisitions are artificial intelligence scheduling tool provider X.ai, which will power its Meeting Scheduler, Bizzabo for Exhibitors and Smart Recommendations services; Swedish startup Whalebone, which offers crowd amplification and crowd visualization services to improve the digital interactions between speakers and audience members; TeeVid, whose broadcast solutions are being integrated into the companies new video production suite; and wearable tech startup Klik, whose products will be used to collect and use attendee behavior data and provide recommendations on sessions, networking opportunities and sponsor interactions.

Meeting event management tech giant Cvent also sparked some buzz when it acquired event production software company Shoflo last spring, as well as going public in December 2021 after completing a merger with special-purpose acquisition company (SPAC) Dragoneer Growth Opportunities Corp. that was announced last summer.

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