Businesses that faltered during the pandemic have bounced back stronger than ever, and five years on new niches are opening up, says Nicholas Neveling.
Geopolitical chaos, cost-of-living crises, market uncertainties. Sounds like the perfect time to get away from it all. Despite people being more circumspect about their spending, travel has proved remarkably resilient. It’s simple: “People tend to always want to go on holiday,” says David Wilson, a founding partner at Panoramic Growth Equity. “From a personal perspective, it’s right up there in terms of what I want to do with my family, as opposed to buying material assets. Those holiday memories last a lifetime.”
Harry Stoakes, who leads the leisure M&A team at BDO agrees: “If I had a choice between replacing a car or sacrificing a holiday, I’d happily drive an old banger.”
Stoakes says deal volume in the sector has returned to pre-Covid levels, with strong propositions coming to market: “When I’m looking at a travel business and thinking ‘will this sell?’ it needs to have growth of 15% or above and gross margins over 25%. The way for travel businesses to achieve that is by offering more complicated itineraries and experiences, so it’s harder for consumers to compare pricing with DIY holidays booked through the likes of Booking.com and Airbnb.” It’s only the companies that offer more complicated itineraries and experiences that can beat the price transparency of those models.
Many buyers see travel as a necessity, rather than a luxury item
With opacity being key to delivering strong margins, it’s no surprise that the most successful recent sales and expansions in the sector have been luxury tour companies. “We like businesses like these that have high margins because the product is complicated,” says Stoakes.
“They also tend to be good at selling and good at load management [ensuring tours are full], which means they must have good systems and, therefore, good technology. And that, in turn, makes the business scalable and replicable.” For Stoakes these are the hallmarks of a sound investment opportunity: “It suggests that a single year is not just a one-off, but they’ve got the systems in place to automate pricing and load factors, and this success that they’ve seen will continue.”
Tech a break
Mobeus partner Justin Maltz, a long-time investor in the travel sector, says that when the big online travel agents first took off, the market bifurcated. “You had these really large technology-led businesses with huge scale that were using technology to disrupt the traditional travel agents. That’s quite a hard private equity investment,” he says. “We chose to focus on the specialist operators, which operate at lower volume, doing a lot more value-add and operating on higher margins. They’ve been more resilient through the various economic and geopolitical ups and downs of the past few years.”
Mobeus acquired outdoor adventure and experience tours operator Active Travel Group in 2018. Since then, it has backed the company in a series of bolt-ons. In 2024 Mobeus also supported the £15m MBO of Distant Journeys, a long-haul tour operator aimed at the “older demographic”.
Maltz says trade buyers are now back in the market, following a post-Covid hiatus as they sorted out their own balance sheets. “There were more trade than PE buyers last year,” he says, citing the acquisition of cruise and ski operator Iglu from LDC by Australia’s Flight Centre in December, and Tour Partner Group’s bolt-on of tour operator and hotel consolidator JacTravel, in April. “PE did have quite a big buying spree pre-Covid and some of those businesses haven’t recovered as much as they’d like, which has taken a bit of PE demand out of the market,” he adds.
Given that the pandemic has added a couple of years to typical PE hold times in the sector, we could see a glut of pre-2020 investments coming onto the market over the next year. “Obviously in 2021 and 2022 there was no transaction activity at all,” says Stoakes. “But the deal volume that we’ve seen during the last couple of years looks good in terms of a strong recovery.”
Nor is this recovery purely domestic. “There’s no shortage of international trade buyers,” says Stoakes, “and what’s driving that is that UK businesses have some of the best travel tech in the world, along with the best customer acquisition and retention. We have good products and great service that can really compete in the international landscape, and are therefore attractive to overseas buyers.”
Matt Goodbourn, an M&A adviser at Grant Thornton, says a “particularly strong end of year” presages a “bump in the number of businesses coming to market” in 2026. He tempers this enthusiasm, however, with a note of caution: “The bar is higher than ever to get deals completed. I think we’re still seeing a market that’s challenging to transact in. Processes are taking a long time, and diligence can be a particular sticking point.
“Businesses looking to sell or gain investment are going to need to find a way to stand out from the crowd. I think a lot of our work, as advisers, is about working with these businesses to help articulate the value story, supported by solid data and reporting, and demonstrate what the overall market opportunity is.”
Coach class
“Niche is key,” says Alex Hunton of FRP Corporate Finance. One of the particular niches he has in mind is luxury coach travel – or, even more niche, luxury coach travel to work. That may seem more “transport” than “travel”, but it’s a fine example of how assets can be made to “sweat”, particularly in a fragmented market that is ripe for consolidation and logistical efficiencies.
“The coach industry has been very old-school,” he says, “but some have seen the opportunity to get into an industry which is absolutely fundamental – both in terms of leisure travel and workplace travel. As employers look for new ways to attract and retain staff, some employers are putting on shuttle services to get people to work.”
With executive coaches costing hundreds of thousands of pounds, barriers to entry in the industry are a lot higher than they once were. “It’s about trying to find a best-in-class between independent coach operators and the bus plcs that are also looking to get more into coach,” says Hunton. “It means you’ve got increasing levels of acquisitions.”
Potential efficiencies from tech overlay and the increasing ESG benefits of workplace coach travel, as well as “a lot of fragmentation” enhance the niche’s appeal. “There’s an opportunity to consolidate and modernise some of these businesses, particularly given the linkage and synergies between what you’ve seen in the wider travel sector and how these companies can support tour operators too,” says Hunton.
Building niche markets
Panoramic’s Wilson has seen value in writing smaller (£2m-£8m) cheque sizes for travel companies with pretty niche offerings, such as northern lights tour specialists The Aurora Zone. Through a series of bolt-on acquisitions, Panoramic has built a small group under the banner of Artisan Travel Group. Although the firm has already received offers for Artisan, it is early in their hold cycle, so the decision on whether to sell the whole group, divest part of it, or grow it further has not been made.
He points out that certain demographics – such as that targeted by Travel Editions, a recent Artisan acquisition – are less affected by macroeconomics. “Their customers tend to not be so sensitive to interest rate or tax rises, and prioritise travel and holiday spend – they’re generally older with some cash in the bank.”
Travel cash flows are good because customers pay in advance
Wilson adds that the dynamics of the travel sector bring extra confidence. “You can see into the future with the bookings cycle and cash flows are good because customers pay in advance,” he says. “And there is always the opportunity of bolting smaller assets together and gaining synergies from centralising marketing, procurement, technology and so on.”
BDO’s Stoakes, who has more than two decades’ experience of travel deals, says it’s the technology element that gives the UK travel industry the edge over the competition: “It’s the best in Europe in terms of tech and tech investment, and we’ve seen that through the various online travel agents that have succeeded over the years.”
FRP Corporate Finance director Alex Hunton believes tech platforms could help one travel segment – coach operators – think and act more like logistics businesses. “Most of these businesses aren’t utilising data to plan more efficiently,” he says. “The operators that are starting to think differently – taking that data, making it smarter and increasingly using AI to optimise fleet utilisation – are the ones seeing real margin improvement.”
The overall picture is of a consumer market where, as Stoakes puts it, “Survey data puts travel at number one, viewed by many buyers as a necessity, rather than a luxury item.” That said, it’s the luxury operators that are most in demand, combining the opacity of a complex travel itinerary with a well-to-do customer base. Although this can still mean cruises, “experiential” travel options for a more adventurous generation of retirees are a flourishing area. “We’re seeing a lot of interest in things like adventure travel, cultural travel, and wellness tourism,” says Goodbourn.
With trade buyers looking at consolidation plays, and PE ever-interested in acquisitions – and soon to be looking at exits – the feeling is that travel is strong enough to cope with macro headwinds in 2026, particularly if they leave people feeling more in need of a holiday than ever.
That ship has sailed
LDC exited its 10-year investment in cruise and ski operator Iglu in December 2025, having more than doubled the company’s value to £122m.
The acquisition will help Australian group Flight Centre Travel expand its cruise footprint. Iglu CEO David Gooch, who will stay with the business, says they expect to continue to “explore new opportunities to scale the business as part of a global specialist”.
Under LDC’s ownership, Iglu invested significantly in technology and booking systems, and expanded across Europe, while introducing more product lines. Richard Downs, who co-founded the company as a ski operator in 1998, says LDC enabled Iglu to take its “proven model to new markets and dramatically scale the business, whilst investing in our technology infrastructure and brands”, adding that LDC’s support during the pandemic meant they could “take full advantage of the subsequent resurgence in international travel, which helped re-accelerate growth”.
“This transaction highlighted a value-adding approach to investment, as well as the value of long-term support,” says LDC partner, David Andrews. “Whilst the business is now unrecognisable in terms of its technology, market presence and scale, the team have remained true to their founding principles of innovating the market.”
Flight Centre’s global reach and technology infrastructure should help the 418-employee, Portsmouth-based firm travel further still.
