BDO's prediction bookends what was the busiest year for travel M&A activity since 2018 when 20 deals were completed. Nearly half (10) of this year's 21 deals were for overseas tour operators and agents.
These included Flight Centre Travel Group's acquisition of Iglu.com, on which BDO advised, Hays Travel's moves for Cruise.co.uk and Millington Travel, and Travel Counsellors backer Vitruvian Partners' purchase of Great Rail Journeys.
BDO noted a year-on-year shift in M&A activity towards trade buyers, such as Hays Travel, with fewer deals involving private equity (PE), albeit while stressing PE investors continue to monitor travel closely.
"The bar is higher than ever to get deals completed," said BDO. "Preparation, time, positioning and the right technology solutions are key."
Three of BDO's main predictions for 2025 – deals for Iglu.com, Cruise.co.uk and Great Rail Journeys – came to fruition. Offers were made for the two other businesses it picked out at the end of last year – Riviera Travel and Audley Travel – but were ultimately rejected.
Besides Audley, Loveholidays and Travelopia, BDO flagged Rabbie's and Tour Partner Group as businesses likely to attract M&A attention over the coming year.
Loveholidays, which has grown its Atol to five million passengers, has for several years be subject to speculation about a £1 billion stock market flotation.
'Another impressive year'
In its sixth Travel Diaries report, signed off by partner Harry Stoakes, BDO outlined four reasons to be positive going into 2026, including resilient consumer spending on experiences – like travel – over "things".
Other factors include household savings running above the 10-year average creating headroom for spending, persistent or growing intent to spend on travel among all age brackets, but especially among the over-60s, and a steady uptick in UK residents travelling abroad, which rose in 2024 to 94.6 million to surpass 2019 levels (93.1 million).
Stoakes said 2025 was "another impressive year for travel M&A". "As consumers, when we consider our spending plans for the next year and review our consumption choices in previous years, I am yet to meet anyone that regretted taking a holiday," he said.
"All consumers value travel highly, that's evidenced from consumer research and the insatiable desire for people to get away."
Themes set to underpin travel M&A in 2026 include a shift away from managing ESG – environmental, social, governance – and towards adopting AI. "Understanding the opportunities and threats this has for your business is important," said BDO.
BDO also believes businesses that have a clear international strategy and can address multiple source markets will be in demand, along with those on top of their total addressable market.
Finally, the firm is advising businesses to ensure they are on top of their key metrics such as repeat rates, life-time value and customer acquisition costs per channel, factors that demonstrating "good systems, data-driven decision-making and more predictable ROI".
