Summary:
- Hospitality is shifting from expansion to optimization post-pandemic.
- Deal activity remains steady and selective, led by strategic buyers.
- The largest H&L deals in late 2025 involved digital platforms.
THE HOSPITALITY INDUSTRY shifted from expansion to optimization after several years of post-pandemic normalization, according to Pricewaterhouse Coopers. Deal activity remains steady but selective, with strategic buyers accounting for most transactions.
PwC’s “U.S. Deals 2026 Outlook” found that buyers seek assets that extend digital capabilities, reinforce brands and add experiential value. Third-quarter deal volume rose about 40 percent from the second quarter, driven by improving financial conditions and clearer trade and macro risks.
“Hospitality and leisure are no longer defined by venues or categories, but by the seamless delivery of interconnected experiences to value-focused consumers,” said Jonathan Shing, PwC’s leader for U.S. hospitality and leisure deals.
Year-to-date deal volumes are comparable to 2024, but deal value has declined, with average transaction size down about 55 percent. The gap reflects uneven recovery across subsegments: strength in luxury, softness in economy and a recovering corporate and international travel base.
Future dealmaking is expected to target properties and capabilities that support an ecosystem strategy where AI, loyalty and experiential design converge to drive growth, deepen customer relationships and secure advantage.
PE pulls back
Private equity remains cautious, contributing 10 percent of disclosed deal value year to date, down from over 50 percent in 2024. High interest rates, the sector’s asset-heavy structure and valuation gaps have raised return thresholds, making deals outside top-tier assets harder to justify.
Strategic transactions have filled the gap, with value up about 7 percent year over year. Cross-border investment has held steady, showing continued international interest in U.S. assets. Gaming has become a focus: all three of the largest hospitality and leisure deals in the second half of 2025 involved digital gaming assets and foreign buyers.
Operators and investors are targeting back-office modernization—finance, HR, logistics and event technology—to improve efficiency and scalability. Platforms that support personalization, loyalty and digital engagement are reshaping the front-end experience. The focus is on building end-to-end digital infrastructure that integrates AI, operations and experience-based monetization.
Corporate buyers take lead
With less competition from private equity, corporate acquirers focused on properties that expand loyalty programs, improve personalization, or strengthen cross-channel engagement. M&A interest centered on resorts and digital gaming assets, as investors pursued distinct demand drivers and higher-margin opportunities.
The largest hospitality and leisure deals in the second half of 2025 involved digital platforms, highlighting the sector’s convergence with entertainment and international capital. Deal volume from international buyers remained flat despite geopolitical and macroeconomic uncertainty. Infrastructure and integration also drew focus.
Investments targeted guest-facing innovation and back-office systems, including loyalty integration, event logistics and AI personalization engines. Buyers focused on unified customer identity, loyalty programs and personalized engagement.
Third-quarter deal volume was 40 percent higher than the first- and second-quarter averages, showing a return of activity to the hospitality and leisure M&A market amid clearer trade and macroeconomic conditions.
Traditional M&A will continue to drive deal volume, but the largest bets in 2026 are expected to focus on connected ecosystems and AI-driven platforms. Data governance remains a constraint on fully leveraging AI. Winning assets will combine brand equity with data fluency, omnichannel research and embedded personalization. As AI moves from experimentation to scaled deployment, the sector enters a new phase of competitive differentiation.
Key trends
Agentic AI use cases are expanding across hospitality and leisure. In travel, AI assistants rebook itineraries in real time. In hospitality, predictive analytics and digital concierges improve service and efficiency. In gaming, adaptive platforms redefine personalization. The most valuable use cases empower staff rather than replace them.
Trusted brands provide more than familiarity—they offer strategic protection. Investors are seeking assets where loyalty, recognition and content ecosystems drive monetization and margin.
As AI deployment scales, data governance separates leaders from laggards. M&A strategies increasingly depend on unifying, activating and protecting customer data across platforms and regions. Buyers are investing in full-stack platforms that combine content, loyalty, booking and analytics to create seamless guest journeys that blur traditional sector lines.
Dealmakers are also assigning value to loyalty ecosystems for driving cross-brand conversion, retention and upsell. With capital costs still elevated, success depends on post-close clarity. Day One integration plans should prioritize data readiness, customer identity unification and loyalty platform integration.
In June, PwC’s Hospitality & Leisure: U.S. Deals 2025 Midyear Outlook, based on S&P Global Market Intelligence, found that hospitality and leisure dealmakers entered 2025 cautiously, but ongoing volatility in capital markets and trade policy prompted a reassessment of growth strategies. Large transformative deals remain limited, while targeted M&A helps operators adjust portfolios, refine strategy, and expand digital capabilities.
