1. Executive Summary

Industry overview (macro + sector-specific)

Travel, Hospitality & Leisure has moved past the “post-COVID rebound” storyline and into something more nuanced. Demand is still there, but buyers are now paying for durability, not just growth. Assets with sticky demand, pricing power, and real operating systems (not just vibes) are getting the calls. Anything that feels overbuilt, overlevered, or capex-hungry is facing tougher questions.

At the macro level, the sector is back to being a real economic engine. UN Tourism estimates 1.4 billion international tourists traveled in 2024, essentially back to pre-pandemic levels at 99% of 2019. (untourism.int) That matters because cross-border volume is where a lot of premium leisure, resort, and gateway city profitability lives.

So what does that mean for M&A? It’s created a market where “good” is still in demand, “great” gets fought over, and “fine but messy” often needs structure (earnouts, seller notes, JV recaps) to bridge valuation gaps.

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Recent M&A momentum (deal count, value)

The punchline from the last full year of data: deal volume stayed busy, but the dollars got more concentrated.

KPMG’s U.S. travel, leisure, and hospitality tracking shows:

• 2024: 875 deals totaling $28.2B (a quieter year, fewer large transactions). (KPMG, Hotel Dive)
  
  
• 2025: 848 deals totaling $51.6B, with value supported by larger transactions and a stronger second half. (KPMG)
  
  

So yes, slightly fewer deals, but materially more value. That’s a classic “bigger checks, fewer shots” setup.

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High-level multiples and key trends

Public markets are still setting the tone for private valuations, and the market is basically saying this:

1. Scale and distribution matter more than ever
   If you can control demand (loyalty, direct channels, repeat behavior), your cash flows feel safer, and you can justify higher multiples.
   
   
2. Asset-light earnings keep winning
   Businesses that collect fees (brands, management, franchises) tend to trade at higher EV/EBITDA than those that need heavy ongoing capex just to stand still.
   
   
3. Buyers are underwriting resilience, not perfection
   When costs are sticky (labor, insurance, utilities), investors reward operators that have an actual playbook: revenue management discipline, procurement scale, and tech that improves conversion or staffing.
   
   

Major players and consolidators

When you zoom out, consolidation pressure is coming from a few familiar camps:

• Large hotel systems and brand houses that want more flags, more loyalty members, more fee income.
  
  
• Gaming and interactive entertainment ecosystems where scale, content, and data create recurring revenue-like profiles.
  
  
• Travel tech and platforms that want to own customer relationships, reduce reliance on paid traffic, and expand into experiences.
  
  
• Private equity platforms rolling up fragmented niches, then professionalizing operations and distribution.
  
  

KPMG’s latest TLH commentary points to consolidation continuing, particularly in gaming, alongside steady investment in technology-led hospitality solutions. (KPMG)

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Summary of Key Metrics

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2. Industry M&A Market Overview

Deal activity trends (Y/Y and Q/Q)

The deal tape in Travel, Leisure & Hospitality (TLH) has had a slightly funny shape lately: fewer transactions, bigger dollars. That usually means buyers are concentrating capital into the assets they trust most, while leaving the “nice business, messy reality” targets to smaller sponsors, family offices, or structured deals.

Year-over-year (U.S. TLH tracking)

• 2024: 875 deals, $28.2B disclosed value. (KPMG)
  
  
• 2025: 848 deals, $51.6B disclosed value. (KPMG)
  
  

Quarter-over-quarter flavor (how 2025 actually felt)
KPMG’s H2 2025 framing is basically: confidence came back, and it showed up in deal size more than deal count. (KPMG)

PwC’s 2026 outlook messaging lines up with that, pointing to momentum returning through 2025 and into 2026, with digital experiences and AI showing up more often in the strategic narrative buyers use to justify deals. (PwC, Business Travel News)

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Notable megadeals

A big part of the 2025 value jump is explained by a handful of large leisure and gaming transactions, plus high-profile hospitality plays. KPMG’s top-deals list for 2025 highlights examples like:

• Apollo Funds combining IGT’s Gaming & Digital business with Everi (reported $6.3B). (KPMG)
  
  
• Intralot acquiring Bally’s International Interactive (reported $3.2B). (KPMG)
  
  
• MCR-led group taking Soho House private (reported $2.7B enterprise value including debt). (KPMG)
  
  
• Hyatt’s acquisition of Playa Hotels & Resorts (reported $2.6B including net debt). (KPMG)
  
  

What’s important here is not the exact roster. It’s the pattern: leisure and gaming-style recurring revenue stories have been pulling in larger checks, while traditional lodging M&A is often structured around asset-light models, portfolio recycling, or very specific strategic gaps.

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Private equity vs. strategic acquirer share

Strategics remain the majority by volume, but sponsors still swing weight on value when the right platform shows up.

KPMG’s 2025 breakdown:

• Strategic: 636 deals (75% of volume)
  
  
• Private equity: 212 deals
  
  
• Sponsor value surged in H2 2025 ($20.2B in H2 vs $3.7B in H1), which is a polite way of saying “the financing and conviction showed up later.” (KPMG)
  
  

A useful read-through: when the market feels uncertain, strategics can still do bolt-ons with balance sheet flexibility, but big sponsor deals tend to wait for cleaner debt terms and better visibility on forward cash flow.

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Capital availability

Capital has been available, just picky, and the underwriting bar is higher than it was in cheap-money years.

Three signals worth keeping in your head at the same time:

1. 2024 was constrained by cost of capital
   KPMG explicitly describes 2024 as unusually quiet, with high financing costs and fewer large transactions contributing to the slowdown. (KPMG)
   
   
2. By late 2025, deals got larger
   That H2 2025 value step-up, plus the sponsor surge in H2, strongly implies lending and risk appetite improved enough to finance bigger checks, at least for high-quality platforms. (KPMG)
   
   
3. Operating fundamentals are stable, not euphoric
   STR and Tourism Economics’ first 2026 U.S. hotel forecast called for modest RevPAR growth of about 0.6% in 2026 and noted RevPAR fell about 0.3% in 2025. That’s not a panic alarm, but it does push buyers to demand proof of pricing power and margin control. (Hospitality Net)
   
   

If you want the banker translation: lenders and ICs will fund deals, but they hate surprises. Anything with uncertain capex, weak direct demand, or “we’ll fix margins later” assumptions gets discounted or structured.

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M&A Volume/Value by Year

Map of Global Deal Hotspots

‍3. Valuation Multiples and Comps

Median EV/Revenue and EV/EBITDA by sub-sector

When people say “TLH trades on a cycle,” this is what they mean in practice: the same headline demand can produce wildly different multiples depending on operating leverage, capex needs, and how repeatable the cash flow feels.

Using Damodaran’s January 2026 U.S. market snapshot (enterprise value multiples by industry), here are clean benchmark medians you can use as first-pass sanity checks:

Sub-sector valuation snapshot (U.S., as of January 2026)

Quick read: hotels/gaming sit below the broad market on EV/EBITDA in this snapshot, restaurants are closer, and recreation is meaningfully lower. That tracks the “cash flow quality” hierarchy most bankers use informally when they’re triaging a pitch list.

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Historical multiple ranges (3–5 year view)

Free public sources rarely give perfect five-year time series by niche TLH subsector, but you can still build a useful historical lens by tracking the sector that TLH mostly lives inside (Consumer Discretionary) and then layering subsector-specific dispersion on top.

Siblis Research publishes a sector EV/EBITDA series for large-cap U.S. companies (a good directional proxy for the public comp backdrop that private deals tend to reference). Here’s the recent history they show for Consumer Discretionary:

Historical EV/EBITDA proxy (Consumer Discretionary, large-cap U.S.)

What this tells you (without overcomplicating it):

• The public “multiple weather” for consumer names has bounced around a mid-to-high teens band lately.
  
  
• TLH subsectors that feel more cyclical or capex-heavy will typically trade at a discount to that sector multiple, while asset-light brands and platforms can trade at a premium.
  
  

Comparison to S&P 500 and related industries

Instead of arguing about one perfect S&P 500 EV/EBITDA number (those vary by provider and methodology), the more banker-friendly approach is to anchor on a broad “total market” enterprise multiple and then compare relative positioning:

• Total market EV/EBITDA (Damodaran, January 2026): 19.73x (Stern School of Business)
  
  
• TLH comps in that same dataset:
  
  
  
  • Hotel/Gaming: 14.93x (Stern School of Business)
    
    
  • Restaurant/Dining: 17.49x (Stern School of Business)
    
    
  • Recreation: 10.39x (Stern School of Business)
    
    

So, in plain English: most TLH sub-sectors screen cheaper than the broad market on EV/EBITDA, with restaurants the closest to “market-like” and recreation the most discounted. (Stern School of Business)

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Historical Valuation Multiples

Comps Table: Peer Multiples & Financials

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4. Top Strategic Acquirers and Investors

If you’ve sat through a few TLH deal committee meetings lately, you’ve probably noticed the same pattern: buyers aren’t chasing “travel is back” anymore. They’re chasing control. Control of demand (loyalty, direct channels, repeat guests), control of the product (brands and flags), and control of margins (systems, tech, procurement scale). That’s where the most consistent acquirers have been placing chips. (KPMG, Hotel Dive)

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Top acquirers to watch (last 12–24 months)

Below is a practical “who’s been active and why” list across hotels, travel platforms, and leisure/gaming (which is often where the biggest TLH checks live). This is not exhaustive, but it’s enough to orient a buyer map quickly.

Active acquirers and the thesis behind the buying

Strategic hotel consolidators

1. Marriott International
   
   
   
   • What they’ve been buying: citizenM brand (lifestyle/select-service). (Marriott, Hotel Dive)
     
     
   • Thesis in plain English: add lifestyle inventory that plays nicely with Marriott Bonvoy and increases global “option value” for members in urban markets. (Marriott, Hotel Dive)
     
     
2. Hilton
   
   
   
   • What they’ve been buying: Graduate Hotels brand (college-town lifestyle). (Stories From Hilton)
     
     
   • Thesis: bolt on a distinctive lifestyle brand and plug it into Hilton Honors distribution, where loyalty demand can lift occupancy and ADR. (Stories From Hilton, Hotel Dive)
     
     
3. Hyatt
   
   
   
   • What they’ve been buying: Standard International (The Standard + Bunkhouse) completed Oct 1, 2024; Playa Hotels & Resorts (all-inclusive platform) announced and later completed in 2025. (Hyatt Newsroom, investors.hyatt.com, Hotel Dive)
     
     
   • Thesis: double down on lifestyle plus all-inclusive where the revenue model can be more “bundle-like” and the guest wallet share is easier to capture on-property. (Hyatt Newsroom, investors.hyatt.com)
     
     
4. IHG Hotels & Resorts
   
   
   
   • What they’ve been buying: Ruby brand and IP (premium urban lifestyle), announced Feb 18, 2025. (InterContinental Hotels Group PLC)
     
     
   • Thesis: expand a space-efficient lifestyle concept globally and feed it through IHG One Rewards and the owner base. (InterContinental Hotels Group PLC)
     
     
5. Choice Hotels (strategic intent signal)
   
   
   
   • What they tried: a large-scale bid for Wyndham that ultimately ended. (AP News)
     
     
   • Thesis: scale in franchising is powerful (distribution, owner relations, tech), and the attempted deal shows strategic appetite for consolidation even when execution doesn’t land.
     
     

Travel platforms and travel tech consolidators
6) Booking Holdings / Booking.com (platform expansion via partnership)

• What they did: extended their commercial partnership with Etraveli Group for flights (8-year extension announced June 2025). (ir.bookingholdings.com, PR Newswire)
  
  
• Thesis: strengthen flights as part of an end-to-end travel offering; it’s a classicmove to reduce friction and keep users inside the ecosystem. (ir.bookingholdings.com)
  
  

7. NextTrip (smaller cap, but very “platform roll-up” behavior)
   
   
   
   • What they bought: full acquisition of luxury travel brand Five Star Alliance (remaining 51% purchased April 2025). (Newswire)
     
     
   • Thesis: integrate high-end inventory and supplier relationships into a broader travel platform to widen margin capture across B2C and B2B.
     
     

Leisure and gaming consolidators (often the biggest checks in TLH)
KPMG’s TLH tracking highlights that large leisure/gaming transactions were major contributors to the step-up in 2025 disclosed value. (KPMG)

8. Apollo (sponsor-led strategic consolidation)
   
   
   
   • Example deal called out by KPMG: combining IGT’s Gaming & Digital business with Everi (reported $6.3B). (KPMG)
     
     
   • Thesis: build scale, expand product breadth, and create a platform with more recurring revenue characteristics (software/digital mix tends to support better underwriting).
     
     
9. Intralot (interactive/gaming)
   
   
   
   • Example deal called out by KPMG: acquiring Bally’s International Interactive (reported $3.2B). (KPMG)
     
     
   • Thesis: consolidate digital/interactive capabilities where growth and margin profiles can look better than purely physical operations.
     
     
10. MCR-led buyer group (hospitality ownership platform)
    
    

• Example deal called out by KPMG: taking Soho House private (reported $2.7B enterprise value including debt). (KPMG)
  
  
• Thesis: acquire a differentiated lifestyle membership/hospitality platform and reposition it with longer-term capital and operational focus.
  
  

Private equity platforms and roll-up strategies

Sponsors haven’t disappeared. They’ve just been more selective and, in some windows, less visible by volume. One public framing from PwC coverage: private equity-backed hospitality and leisure deals were a much smaller share of transactions in early 2025 than in the prior year, while strategics stayed active for strong assets. (Business Travel News, Hotel Dive)

The sponsor playbook you keep seeing in TLH right now tends to fall into three buckets:

1. Brand/IP roll-ups (asset-light bias)
   Buy brands or management platforms that can scale without owning the real estate. This is why lifestyle brand M&A is so competitive.
   
   
2. Experience-led platforms
   Membership clubs, experiential travel marketplaces, and curated luxury offerings where pricing power is tied to community, content, or unique access.
   
   
3. Gaming and “recurring-ish” leisure
   Sponsors like businesses where a portion of revenue resembles subscription, software, or contracted cash flows, even if the underlying sector is discretionary. (KPMG)

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Logo Grid: Active Acquirers

Deals by Acquirer, Value, Rationale

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5. Transaction Case Studies

Below are four deals that do a nice job showing where TLH M&A has been heading: more brand and distribution control, more fee-based earnings, and more “build a platform, then optimize it” thinking (especially when private capital is involved).

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Case study 1: Hyatt + Playa Hotels, then an immediate pivot to fully asset-light

Why this deal matters
Hyatt didn’t just buy resorts. The real move was using Playa as a bridge to secure long-term management fees while offloading owned real estate to keep the model light on capital.

One-page snapshot

Deal basics

• Buyer: Hyatt
  
  
• Target: Playa Hotels & Resorts
  
  
• Deal timing: acquired June 17, 2025 (per Hyatt) (investors.hyatt.com)
  
  
• Reported size: about $2.6B including about $900M of debt (net of cash), $13.50 per share (investors.hyatt.com)
  
  

Strategic rationale

• Scale Hyatt’s all-inclusive platform in Mexico, Dominican Republic, and Jamaica, and convert earnings mix toward fees.
  
  
• Lock in long-dated management contracts while letting real estate capital recycle.
  
  

Value and “multiple paid”
Hyatt later signed a definitive agreement to sell Playa’s owned real estate portfolio for $2.0B to Tortuga (KSL affiliate + Rodina), with up to $143M earnout, plus 50-year management agreements for 13 properties. (investors.hyatt.com)

• Hyatt’s stated net purchase price for the asset-light management business: about $555M (net of gross proceeds from asset sales). (investors.hyatt.com)
  
  
• Hyatt’s stated stabilized Adjusted EBITDA expectation (2027): $60–$65M, implying an 8.5x–9.5x multiple (and potentially better if earnout triggers hit). (investors.hyatt.com)
  
  

Synergies and operating upside (what’s realistically on the table)

• Distribution lift: loyalty and direct booking should reduce reliance on third-party channels over time.
  
  
• Procurement and shared services: back office, marketing, and vendor scale.
  Hyatt did not publish a classic “synergy dollar” target in the excerpted disclosures above, but they did frame the transaction as fee-based earnings accretive in the first full year after the asset sale. (investors.hyatt.com)
  
  

Case study 2: Apollo platform build in gaming and leisure tech (IGT Gaming & Digital + Everi)

Why this deal matters
This is the private-capital version of TLH consolidation: buy two complementary pieces, combine them under private ownership, and build a scaled product suite that can serve casinos, digital channels, and hospitality operators.

One-page snapshot

Deal basics

• Buyer: Apollo funds (via new holding company)
  
  
• Targets: IGT’s Gaming & Digital business and Everi
  
  
• Announcement date: July 26, 2024 (Apollo)
  
  
• Reported value: approximately $6.3B combined (Apollo)
  
  

Consideration and structure

• Everi shareholders: $14.25 per share in cash, stated as a 56% premium to Everi’s July 25, 2024 close (Apollo)
  
  
• IGT proceeds: $4.05B of gross cash proceeds for IGT Gaming (Apollo)
  
  
• The businesses move forward under private ownership as one combined enterprise (Apollo)
  
  

Strategic rationale

• Broader product suite across gaming content, digital, and fintech rails for operators.
  
  
• Scale benefits: cross-selling, bundled offerings, and better R&D leverage.
  
  

Multiple paid
Not disclosed directly in the press release excerpt. (Apollo)
If you want an estimated EV/EBITDA range, you’d typically triangulate with each segment’s disclosed EBITDA (or proxy margins) and then adjust for run-rate cost saves, but that would require additional audited figures beyond the press release.

Synergies (what to watch)
No single synergy number is stated in the excerpted press release. The most tangible synergy logic here tends to be revenue synergy (selling more “wallet” into the same casino customer) plus tech and overhead rationalization under one platform. (Apollo)

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Case study 3: Soho House take-private led by MCR (hospitality + membership brand)

Why this deal matters
This is a classic “take it private to fix it” situation in hospitality: member experience, unit economics, and expansion pacing are easier to rework away from quarterly scrutiny.

One-page snapshot

Deal basics

• Buyer group: led by MCR
  
  
• Target: Soho House
  
  
• Announcement: August 18, 2025 (AP report)
  
  
• Price: $9 per share in cash (AP News)
  
  
• Implied enterprise value: roughly $2.7B including debt (AP News)
  
  
• Expected close: by end of 2025, subject to regulatory and closing conditions (AP News)
  
  

Strategic rationale (as framed publicly)

• Combine MCR’s operational/ownership expertise with a distinctive lifestyle brand. (AP News)
  
  
• Longer time horizon to improve profitability and member experience without public-market volatility.
  
  

Multiple paid
Not disclosed in AP’s write-up. (AP News)

Synergies (practical lens)

• Real estate and hotel ops discipline: procurement, staffing models, and property-level execution.
  
  
• Better capital allocation: slower, smarter growth cadence, or pruning underperformers.
  
  

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Case study 4: Intralot buys Bally’s International Interactive (digital gaming platform expansion)

Why this deal matters
Even though this sits in the gaming side of TLH, it’s part of the same story: buyers want recurring-ish digital revenue and global scale, especially when core brick-and-mortar economics are choppy.

One-page snapshot

Deal basics

• Buyer: Intralot
  
  
• Seller: Bally’s (International Interactive business)
  
  
• Announcement: July 1, 2025 (Business Wire)
  
  
• Enterprise value: €2.7B (Business Wire)
  
  

Structure and financing (high signal details)

• Cash-and-shares transaction (Business Wire)
  
  
• Consideration components (as stated):
  
  
  
  • €1.530B cash
    
    
  • €1.136B in newly issued shares (873,707,073 shares at an implied €1.30 per share) (Business Wire)
    
    
• Intralot financing plan includes debt financing commitments up to €1.6B and an expected equity offering up to €400M (subject to approvals) (Business Wire)
  
  

Strategic rationale

• Build a global gaming technology and services company spanning lottery and digital online gaming markets (company framing). (Business Wire)
  
  

Multiple paid and synergies
The press release section we’re citing focuses on value, structure, and financing. It does not present a clean EV/EBITDA multiple or a single synergy target in the quoted portion. (Business Wire)

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One-Page Snapshot per Deal

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6. Valuation Framework and Modeling

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This section is the “how buyers actually price these deals” playbook for Travel, Hospitality & Leisure (TLH). No mysticism, no magic multiples pulled from thin air. Just the core methods, what matters in this sector, and the modeling levers that tend to move price.

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How deals are priced: comps, precedents, and DCF

In TLH, most pricing conversations start with comps and precedents, and then DCF is used as the reality check. That’s partly cultural (bankers and boards like comps), and partly practical (near-term cash flow visibility can swing quickly with macro, so people anchor to market marks).

1. Trading comps (public comps)
   What it does well:

• Sets the market’s current mood and cost of capital.
• Helps you frame a valuation range fast by sub-sector (asset-light hotel systems vs gaming operators vs leisure services).

What it does poorly:

• Public comps bundle sentiment, leverage, and sometimes one-off cycles (Macau, fuel, wage spikes).
• Lease accounting can distort comparability, especially for lodging and restaurant businesses.

Good practice

• Use EV/EBITDA as the primary lens, then sanity-check with EV/Revenue only when margins are comparable.
• Always normalize for unusual items and, if possible, compare on a consistent lease-adjusted basis.

Useful benchmark context (for orientation, not a price tag)
Damodaran’s January 2026 dataset shows notable dispersion across TLH-adjacent industries:

• Hotel/Gaming EV/EBITDA: 14.93x
• Restaurant/Dining EV/EBITDA: 17.49x
• Recreation EV/EBITDA: 10.39x
• Entertainment EV/EBITDA: 19.41x
• Total market EV/EBITDA: 19.73x (pages.stern.nyu.edu)

That spread is a reminder: TLH is not one multiple. You don’t value a resort operator like you value an asset-light brand house, even if both are “travel.”

2. Precedent transactions (deal comps)
   What it does well:

• Shows what a buyer actually paid, with a control premium embedded.
• Helps validate whether a given target is “strategic” enough to command a premium.

What it does poorly:

• Precedents are often messy: different cycle points, synergies, and structures (earnouts, asset sales, management contracts).
• Disclosed multiples can be incomplete or based on “run-rate” numbers that are… optimistic.

Good practice

• Focus on deals with similar business models (asset-light vs owned), similar demand profile (urban vs resort vs regional), and similar scale.
• If you can’t get a disclosed multiple, don’t fake it. Use disclosed EV/equity value and triangulate with publicly filed EBITDA, then label it clearly as an estimate.

3. Discounted cash flow (DCF)
   DCF matters most when:

• You’re valuing businesses with real long-term cash flow visibility (franchisors, management platforms, contracted revenue, membership models).
• The buyer story depends on margin expansion, capex discipline, or multi-year reinvestment.

DCF matters less when:

• The business is extremely cyclical and the next 18–24 months are foggy. In that scenario, comps and scenario ranges often dominate the conversation.

DCF modeling in TLH has two recurring “gotchas”:

• Reinvestment is not optional. Renovations, property improvement plans (PIPs), and maintenance capex are the price of staying relevant.
• Working capital behavior can be lumpy and seasonal, especially for travel platforms and tour operators.

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Typical control premiums (how to think about it)

Control premiums vary widely depending on sector heat and whether the acquirer expects synergies. There isn’t one correct number you can slap on, but you can model a reasonable range and then check it against deal reality.

Helpful anchor for public-market context
Many practitioners reference observed U.S. control premiums in the ballpark of 20%–40% in “normal” markets, but TLH can fall outside that range when:

• The asset is scarce (iconic brand, limited footprints, trophy resort portfolio).
• The buyer can credibly extract synergies (distribution, loyalty lift, procurement).
• The deal is distressed or overlevered (premium compresses, structure becomes the lever).

Because this varies by cycle and by asset, I’m not going to pretend one number is universal here. The right way to do it in a model is to:

• Run a sensitivity range for premium (for example, 15%, 25%, 35%).
• Tie the premium to synergy visibility and competitive tension in your narrative.

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Key model drivers: revenue growth vs EBITDA margin (what moves valuation most)

In TLH, valuation is usually more sensitive to margin than to top-line, for one simple reason: a lot of revenue is pass-through-ish (OTA marketing, food costs, labor-heavy services), and incremental margin is what turns a “busy business” into a valuable one.

The three biggest levers that move EV in a TLH model:

1. Demand and pricing power (RevPAR / ADR / load factor / take rate)
   Hotels: ADR and occupancy matter, but ADR quality matters more. High ADR driven by discounting is a sugar high.
   Platforms: take rate and repeat bookings are your “pricing power.”
2. EBITDA margin sustainability
   Margin is where buyers decide whether the story is real.

• Labor efficiency and scheduling systems
• Procurement scale
• Revenue management discipline
• Direct booking penetration (reduces distribution costs)

3. Reinvestment and capex
   This is the TLH trap door.
   A hotel business with 18% EBITDA margin can be worth less than a hotel management business with 12% EBITDA margin if the first one needs heavy maintenance capex and the second doesn’t.

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Example modeling assumptions (non-advisory, meant as a template)

Below are example assumption ranges used to build illustrative scenarios, not recommendations.

Asset-light hotel brand / management platform (example)

• Revenue growth: 4%–8% (mix of net unit growth + fee rate growth)
• EBITDA margin: 30%–45% (fees are high margin; overhead scale matters)
• Capex: 1%–3% of revenue (primarily corporate capex)
• Working capital: low intensity, but include timing impacts

Owned/leased hotel operator (example)

• Revenue growth: 2%–6% (RevPAR + modest unit changes)
• EBITDA margin: 18%–30% (highly sensitive to labor and utilities)
• Maintenance capex + PIPs: 4%–8% of revenue (can spike in renovation years)
• Lease/interest sensitivity: meaningful

Leisure/gaming tech platform (example)

• Revenue growth: 6%–12% (product expansion + wallet share)
• EBITDA margin: 25%–40% (software mix drives upside)
• Capex: 2%–5% of revenue (R&D capitalization policies vary)
• Net debt and financing cost: major equity driver in LBO-style cases

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Sample DCF Input Summary

Sensitivity Analysis Table

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7. Trends and Strategic Themes

The TLH deal market has shifted from “buy anything travel-related because demand is back” to “buy the pieces that control demand, protect margin, and make cash flow feel repeatable.” In other words: fewer trophy-hunts, more surgical moves. KPMG’s recent TLH note basically calls it quality over quantity, with buyers leaning toward premium assets that show durable customer economics and real digital engagement. (KPMG)

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Sector shifts shaping deals right now

1. Distribution power is being repriced (and it’s getting more political)
   The tug-of-war between hotels and online platforms has intensified, especially in Europe. Booking.com was designated a “gatekeeper” under the EU Digital Markets Act, and from November 14, 2024 it has to comply with DMA obligations for its online intermediation service. That’s not trivia. It changes how hotels think about direct channels, parity, visibility, and bargaining leverage. (Digital Strategy, Phocuswright)
   
   

You can see the pressure spilling into litigation and public scrutiny too, including large hotel association actions over parity clauses. (The Guardian, Le Monde.fr)

What it means for M&A

• More appetite for assets that improve direct demand capture: loyalty, CRM, revenue management tech, and owned audience.
  
  
• More willingness to pay for brands that can pull demand without leaning entirely on OTAs.
  
  

2. AI is moving from “nice demo” to “margin tool”
   PwC’s 2026 hospitality and leisure deals outlook explicitly flags AI and digital experiences as part of what’s reshaping dealmaking. Deloitte’s 2025 travel outlook also frames AI acceleration as a key theme. (PwC, Deloitte)
   
   

This is where it gets real in a model: AI is not a generic buzzword. In TLH it shows up in a few concrete P&L lines:

• Better pricing and inventory controls (revenue management)
  
  
• Lower distribution cost through smarter targeting and conversion
  
  
• Labor scheduling and ops productivity (the unsexy one, but it pays)
  
  

And yes, that bleeds into M&A because buyers love anything that makes earnings smoother and more “subscription-like.”

3. Cost of capital is still the referee, but the playbook is adapting
   Higher-for-longer rate anxiety hasn’t killed deals. It’s changed the structure and the target list. Buyers are leaning toward:
   
   

• Fee-based models (asset-light hotel systems, management platforms)
  
  
• “Earnings durability” angles (membership, recurring-ish digital, contracted revenue)
  
  
• Transactions where you can point to credible operational fixes, not just hope for macro tailwinds
  
  

KPMG’s TLH coverage frames the current period as tactical recalibration, not retreat. (KPMG)

4. Labor has become a strategic variable, not just a cost line
   Hotel operators have been dealing with wage pressure and staffing constraints, with labor and inflation tightening margins through 2024 and concerns persisting into 2025. (CoStar, LODGING Magazine)
   There’s also been very visible labor action in major markets. (Houston Chronicle)
   Separately, the 2025 Hotel Labor Costs & Trends report (Actabl data) points to rising wages and softer revenue forcing more discipline and efficiency. (PR Newswire)
   
   

What it means for M&A

• Acquirers will pay more for businesses that can hold margins with process, tech, and scale.
  
  
• “Roll-up” logic gets stronger when back-office, procurement, and scheduling improvements can be standardized across a portfolio.
  
  

Emerging models buyers keep chasing

Here are a few patterns that keep showing up in TLH deal rationales and diligence checklists:

A) Ecosystem deals: sell more than a room night
Hotels and leisure businesses are pushing into experiences, memberships, ancillaries, and bundles. The dream is higher wallet share per customer plus more direct relationships.

B) “Asset-light, but still differentiated”
Brand houses and management platforms are still in the driver’s seat because they can scale without swallowing capex risk. But buyers are picky. They want brands with:

• A clear customer story (not generic)
  
  
• Repeat behavior (loyalty, subscription, membership feel)
  
  
• A proven pipeline for growth with owners
  
  

C) Gaming and digital leisure as a “cash flow quality” upgrade
Gaming and interactive assets often sit in TLH deal stats because they can look less seasonal and more tech-enabled than traditional lodging. PwC specifically calls out gaming assets in its 2026 outlook. (PwC)

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Antitrust and regulatory changes to keep on the radar

United States
The DOJ and FTC released the 2023 Merger Guidelines on December 18, 2023. The core impact for TLH is that buyers should expect careful scrutiny when deals combine direct competitors or concentrate supply in a local market, even if the national story looks fragmented. (justice.gov, Federal Trade Commission)

Europe
The DMA is the headline. Booking’s gatekeeper status is a very tangible example of “platform regulation meets travel distribution.” (Digital Strategy, Phocuswright)

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Expert POV: what this means in plain deal terms

If I had to boil the current TLH theme down to one sentence: buyers are paying for control and predictability.

Control of demand:

• Strong brands
  
  
• Loyalty and direct channels
  
  
• Tech that improves conversion and repeat behavior
  
  

Control of margin:

• Labor efficiency and scheduling
  
  
• Procurement and scale benefits
  
  
• Revenue management discipline
  
  

Control of risk:

• Asset-light earnings where possible
  
  
• Geographic and channel diversification
  
  
• Structures that shift capex risk away from the parent
  
  

This is why you’re seeing acquirers talk less about “the travel cycle” and more about “durable cash flows” and “digital engagement.” (KPMG, PwC)

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Timeline of Trend Emergence

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8. 2025–2026 Market Outlook

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If 2023 was stabilization and 2024 was recalibration, 2025–2026 looks like disciplined expansion. The tone has shifted from “travel is back” to “show me durable earnings.” That subtle change is driving who gets bought, who gets passed over, and how deals are structured.

Below is a forward-looking view grounded in current advisory commentary and market signals. This is analysis, not investment advice.

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What will drive M&A over the next 12–24 months?

1. Premium assets with visible earnings will clear the market

Advisory outlooks for hospitality and leisure highlight a constructive deal backdrop for high-quality assets with strong customer economics and digital engagement. In short: buyers are selective, but not shy. (kpmg.com)

What qualifies as “premium” in this cycle?

• Asset-light earnings (franchise, management, fee-based)
• Clear direct demand engine (loyalty, membership, owned audience)
• Margin resilience despite wage pressure
• Real tech enablement, not slideware

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2. Balance sheet flexibility will separate buyers

Cost of capital is no longer free, but it’s also not paralyzing. The buyers most active in 2025–2026 will likely have:

• Low-to-moderate leverage
• Access to private credit or flexible sponsor capital
• Equity currency that still trades at a premium multiple

Expect more:

• Structured deals (earnouts, asset flips, JV structures)
• Sale-leasebacks or asset-light pivots
• Partial stake sales where full exits don’t clear valuation gaps

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3. AI and efficiency will influence valuation gaps

PwC’s 2026 hospitality and leisure outlook points directly to AI and digital experience as reshaping the sector. (pwc.com)

In valuation terms, this means:

• Buyers will underwrite margin expansion via pricing optimization and labor efficiency.
• Sellers will pitch AI-enabled growth and conversion.
• The debate won’t be “does AI matter?” but “how quickly does it translate to EBITDA?”

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4. Distribution regulation may shift bargaining power

EU DMA enforcement (including Booking’s gatekeeper designation) has changed the tone around platform power in travel. (digital-strategy.ec.europa.eu)

Over 2025–2026, that could:

• Strengthen the economics of direct booking strategies.
• Increase appetite for CRM, loyalty tech, and owned-channel capabilities.
• Alter the negotiating dynamic between hotels and platforms.

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Headwinds to watch

No outlook is complete without the friction points.

1. Labor and wage pressure
   Labor has been one of the biggest operational themes in lodging and leisure. Efficiency gains have helped, but wage inflation risk remains real in certain markets. (prnewswire.com)
2. Cyclical demand sensitivity
   Travel demand has proven resilient, but discretionary spend is still exposed to macro shocks, especially in:

• Gaming-heavy markets
• Luxury leisure
• International inbound segments

3. Regulatory scrutiny
   The 2023 U.S. Merger Guidelines suggest a tougher lens on horizontal consolidation, especially in concentrated local markets. (justice.gov)

For TLH, that’s most relevant in:

• Local hotel clustering
• Regional gaming combinations
• Platform dominance issues

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Buy-side vs sell-side expectations

Buy-side mindset (2025–2026)

Strategics

• Target bolt-ons that fill portfolio gaps (lifestyle, all-inclusive, experiential).
• Prioritize earnings quality over sheer unit count.
• Underwrite synergies conservatively unless distribution lift is obvious.

Private equity

• Focus on platform builds with operational upside.
• Seek cash flow visibility or subscription-like traits.
• Structure for downside protection (earnouts, partial exits).

Sell-side mindset

Operators and brand owners

• Highlight loyalty strength and direct mix.
• Emphasize margin recovery and efficiency.
• Position as “scarce strategic asset” to drive competitive tension.

Sponsors exiting

• Lean into stabilized EBITDA narratives.
• Frame tech enablement and margin gains as sustainable, not cyclical.
• Target strategic buyers willing to pay for synergies.

Valuation gap reality
There will still be situations where:

• Sellers anchor to 2021–2022 peak multiples.
• Buyers anchor to higher discount rates and more conservative terminal assumptions.

Deals that close will often involve:

• Creative structuring
• Partial liquidity
• Or assets that are simply too strategic to ignore

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Funnel of Deal Types by Strategic Priority

Outlook Grid: Short/Mid/Long Term

‍9. Appendices and Citations‍

Deal Tables

Valuation Data Sources

Primary reference sources used throughout the report:

Public Market Valuation Benchmarks

• Damodaran NYU dataset (January 2026 EV/EBITDA by industry)
  https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/vebitda.html

Advisory & Industry Commentary

• KPMG Travel, Leisure & Hospitality M&A trends
  https://kpmg.com/us/en/articles/mergers-acquisitions-trends-travel-leisure-hospitality.html
• PwC Hospitality & Leisure Deals Outlook
  https://www.pwc.com/us/en/industries/consumer-markets/library/hospitality-and-leisure-deals-outlook.html

Regulatory Framework

• DOJ & FTC 2023 Merger Guidelines
  https://www.justice.gov/atr/2023-merger-guidelines
• EU Digital Markets Act (DMA) – Booking gatekeeper notice
  https://digital-strategy.ec.europa.eu/en/news/booking-must-now-comply-digital-markets-act

Company Press Releases (Deal-Specific)

• Hyatt Investor Relations
  https://investors.hyatt.com
• Marriott Investor Relations
  https://marriott.gcs-web.com
• Hilton Newsroom
  https://stories.hilton.com
• IHG Investor Relations
  https://www.ihgplc.com
• Apollo Press Release
  https://www.apollo.com
• Intralot / Business Wire
  https://www.businesswire.com

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Methodology

Valuation Framework

• Primary multiples: EV/EBITDA and EV/Revenue
• Control premium context derived from publicly reported transaction data
• DCF modeling uses three-case scenario structure (Down / Base / Upside)
• Terminal value tested via exit multiple and Gordon Growth cross-check

Normalization Adjustments

• Lease accounting alignment (IFRS 16 vs U.S. GAAP where relevant)
• Removal of non-recurring items
• Calendarization of LTM EBITDA where fiscal years differ
• Capex separated into maintenance vs growth where data permits

Sector Segmentation Logic
Travel, Hospitality & Leisure grouped into:

• Asset-light hotel systems (franchise/management)
• Owned/leased hotel operators
• Gaming & integrated resorts
• Digital travel platforms / interactive gaming
• Membership / experiential hospitality

Forward-Looking Analysis
Outlook commentary reflects synthesis of:

• Advisory firm reports
• Public regulatory developments
• Public company disclosures
• Observed transaction structures

No proprietary confidential data was used. No investment recommendations are provided.

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