Dive Brief:
- In the third quarter of 2025, hospitality and leisure M&A deal volume was roughly 45% higher than both Q1 and Q2 averages, signaling rising optimism and activity in the sector, according to a PwC report published Tuesday.
- During the third quarter, private equity investors remained cautious, but corporate acquirers focused on properties that could “expand loyalty ecosystems, enhance personalization capabilities, or deepen cross-channel customer engagement,” per the report. Meanwhile, deal volume from international buyers remained steady year over year, and M&A interest skewed toward luxury investments during the quarter.
- Looking ahead to 2026, traditional M&A will continue to drive deal volume across the hospitality industry, but the biggest opportunities will be centered on “creating connected ecosystems and scaling AI-driven platforms,” according to PwC.
Dive Insight:
As travel demand stabilizes following a turbulent year and AI adoption accelerates, hospitality dealmakers will look to acquire properties and capabilities that merge artificial intelligence, loyalty and experiential design to ultimately foster stronger customer relationships, according to the report.
“Hospitality and leisure are no longer defined by venues or categories, but by the seamless delivery of interconnected experiences to value-focused consumers,” Jonathan Shing, U.S. hospitality and leisure deals leader at PwC, said in the report.
Hospitality dealmakers will shift interest toward assets where loyalty, recognition and content ecosystems drive monetization and margin, per the report. Additionally, dealmakers will invest in full-stack platforms that combine content, loyalty, booking and analytics, as agentic AI use cases accelerate industrywide, per PwC. For example, consumers are increasingly using AI assistants throughout the travel planning and booking processes, the report noted.
Looking ahead, improving capital market conditions and strong sector fundamentals are “setting the stage for renewed M&A activity in hospitality and leisure,” per the report. Hospitality M&A had stalled in the first half of the year amid volatile capital markets, trade policy shifts and dampened consumer sentiment, PwC previously reported.
Hospitality industry professionals told Hotel Dive last week that the Federal Reserve’s latest main interest rate cut bodes well for capital markets and has the potential to spur hotel investment in 2026.
However, with “capital costs still elevated, deal success will depend on post-close clarity,” according to the PwC report.
