We’ve been spending a lot of time talking about inflation, declining valuations and a slowdown in M&A. But what about the positive things in this market? Summer might be over, but there’s a never bad time to talk about traveling and vacations.
“We’re seeing a growing share of wallet going towards ‘experiences’ versus ‘things,’ which has been happening for some time now,” Harris Williams managing director Will Bain tells Mergers & Acquisitions. “Overseas travel in particular has seen a good recovery since the pandemic, and exciting new concepts continue to emerge in other recreational and experiential areas.”
So where are buyers parking their capital? Hotels is one area, as industry watchers expect recovery in that subsector to continue despite a tough economy. Hotel properties were arguably undervalued as investors shunned the sector throughout the pandemic. Meanwhile, some operators have business models that are more resilient and put them in a better position to make long-term bets during downturns.
Earlier today, Blackstone said it is selling British seaside holiday resorts operator Butlins back to its former owner, the Harris family (not related to Harris Williams), who is also a partner in the PE firm’s larger U.K. Bourne Leisure business. Bourne owns Butlins, which has three sites, alongside other hotel and caravan park groups such as the Haven and Warner Leisure Hotels brands.
And in June, Paceline Equity Partners bought the Delta Hotel Virginia Beach Bayfront Suites, a full-service hotel located on the northern coast of Virginia Beach. The hotel is the only one in the area which operates its own beachfront.
“Now I think you’re starting to see those vacations that were missed out. You’re seeing more and more dollars spent on experiences, tourism and travel,” adds KeyBanc Capital Markets director Ryan Hartzell.
– Demitri Diakantonis