Travo Summit 2024: 2024 to be record year for M&A

Morgann Lesne, partner of Cambon Partners, reveals how the market is shaping up

Post-pandemic, the industry is finally back to normal and 2024 will be a normal year for travel tech mergers and acquisitions said Morgan Lesne at the Travolution Summit in February.

Lesne, partner of Cambon Partners, believes that while we don’t have perfect visibility for the next 10 years of growth within the sector, we do have good visibility.

“You need to have a healthy underlying market which we have in this case and it’s even truer for travel tech because we are talking about travel is going to double in size in the next 10 years so I believe that travel tech will go even faster.”

“A lot of shareholders have been holding off their divestment because of lack of visibility and lack of uncertainty.”

He went on to say that a lot of people have held off their exit because of low multiples and crashing valuations at the beginning of 2023.

Lesne believes that private equity will be “extremely dynamic” in the coming years as people feel the conditions are better now, which is what will make 2024 a record year for travel tech M&A.

He said now, though, there's a window as credit rates are coming down, reducing the cost of credit and financing options. 

This year, we won’t see activity in large group acquisitions but rather in the small to mid-size market ones and stories of firms becoming IPOs. 

“We’re going to be seeing probably in 2024, you know, large IPOs like Hotelbeds, rebranded as HBX, we’re going to be seeing a lot of IPOs in India.

“The India market is going to be very, very active. We heard that TBO was going to market for IPO, ixigo as well. 

“And we might see here in Europe probably something going on with Etraveli, with the failure of the booking.com acquisition. 

“They need to find a new strategy and a new exit, so we’ll probably see that in a few months there’s going to be a lot of activity but not necessarily Booking.com or Expedia buying something I don’t believe that. 

Global conflicts like the Ukraine-Russia one and Israel-Hamas one in Gaza could have an impact but it’s unlikely as we’ve seen it only slows down intentions for a few weeks, before picking back up to normal levels again.

Instead, the key driver for any slowing of movement in the market that we'll see will be regulation, long term. 

Lesne said: “I think it might prevent large players like Booking.com from buying decent sized stuff for the coming years. That’s not good news for the M&A market in general.

“Every movement will be scrutinised by the EU Commission starting from you know the end of March. 

“Any single acquisition, even small ones, will be in the regulatory watch. I’m not too worried about small and mid-market,” he said.

“That factor might affect M&A transactions at a big and large scale.”

He also warned that while it’s not a strong trend for him, carbon footprint could be a concern for some.

“In the private equity world, which again is going to play a very important role in the M&A market because most of M&A activity is going to be driven by private equity and private money, but you’ve got some limited partners of funds that are now question whether or not the fund should be invested in travel related businesses. 

“It’s something we should be keeping an eye on as the source of capital might reduce a little bit or the number of people interested in invested in travel companies.”