As the last impacts of the pandemic fade into the rearview mirror, shares in our coverage universe are marching towards record highs, supported by sustained growth and profitability amongst operators. Global Travel and Tourism spend is on track to surpass pre-COVID levels in '24 and we should finally see a full recovery in aggregate demand levels, fueling demand for hotel technology and bolstering public Hospitality Tech company valuations.
The short-term rental market is on track to be the big winner with spending hitting $200B (up ~40%) and the value of online global short-term rental bookings expected to end '24 up 78%+ vs. pre-COVID. This represents an unprecedented shift in consumer tastes in favor of what until recently was seen as a fringe alternative to traditional hotels.
It has been a small deal marketplace in '23 for Hospitality Tech with the $9.3B of announced deal value. While this is on pace with record levels excluding SPACs, it has driven by a small number of multi-billion-dollar mega deals. The average headcount per company sold is down 67% vs. ‘21 levels. The culprit has been the tough debt market backdrop. When the cost of acquisition financing begins to ease, we expect the $100M - $1B sized companies that have been on the sidelines to come to market, setting '24 up to be a breakout year for M&A activity
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