The travel and hospitality technology market is experiencing unprecedented growth in 2025. Travel spending has surged past pre-pandemic levels, empowering operators to invest heavily in technology. This positive trend has propelled the AGC Travel & Hospitality Tech Index, comprised of 25 companies, to achieve topline growth nearly three times that of the S&P 500, with expanding margins. This remarkable performance has attracted investors, driving public share prices to record highs and fueling a 147% year-over-year increase in M&A value in 2024.
AGC Partners: A Key Player in the Travel Tech Deal Landscape
Agc Partners has closed five travel and hospitality tech deals in just over a year, with nine more currently in the market, establishing itself as a leading global bank in the sector. This active engagement provides AGC Partners with unparalleled insights into market trends, suggesting that the current growth trajectory is just the beginning.
M&A Surge Fueled by Favorable Financial Conditions
AGC Partners’ Q1 2024 report predicted a surge in deal-making activity due to easing financial conditions. This prediction has proven accurate, with junk bond yields decreasing by approximately 275 basis points and issuance nearly tripling, igniting the M&A market.
PE-Backed Platforms Driving M&A Growth
Private equity-backed platforms are poised to continue driving M&A activity into 2026 and beyond. Driven by the need to scale for eventual exits, and fueled by cheaper debt and over $330 billion in tech PE dry powder, these platforms are actively seeking revenue acquisition to achieve IPO scale.
Expanding Focus Beyond Hotel Software
While recent deal activity has concentrated on hotel software, particularly PMS and core systems of record, a broadening trend emerged in late 2024. This expansion encompasses marketing technology for hotels, aviation, and other travel verticals. This diversification reflects growing investor confidence in the travel sector as a whole.
Continued Growth Anticipated for Travel & Hospitality Tech
The confluence of robust travel spending, strong operator performance, and favorable financial conditions creates a fertile ground for continued M&A activity in the travel and hospitality technology sector. AGC Partners’ deep involvement in the market positions them as a key player in shaping the future of this dynamic industry. With a proven track record and insightful market perspective, AGC Partners is well-equipped to guide companies and investors through this exciting period of growth and transformation.
