Private equity firms have rediscovered their taste for leisure, restaurant and hotel companies following the sector’s crash during the economic crisis triggered by the pandemic.
Within the leisure, restaurant and hotel sector, there are a handful of verticals, including casinos and gaming; hotels and resorts; cruise lines; leisure facilities; restaurants and bars; and other restaurants, hotels and leisure.
While most of these verticals saw a jump in deal activity between 2020 and 2021, the hotel and resorts vertical’s leap was notable, with the number of deals rising from eight to 14. The vertical is on pace to match last year’s total, having completed seven deals at the year’s halfway point, according to PitchBook data.
The “other restaurants, hotels and leisure” vertical—which includes companies that cater to restaurant, hotel and leisure businesses—also performed well, jumping from 10 deals to 19 deals. The leisure facilities vertical—which includes businesses such as gyms and spas—rose from 28 deals to 39 deals.
Some of the largest deals in the US hotel and resorts sector include a duo of transactions by Cerberus Capital Management and Highgate Hotels. In 2021, the group acquired Colony Capital’s hospitality portfolio for $2.7 billion. Later that year, the group also landed hotel owner CorePoint Lodging for $1.5 billion.
In January, Summit Hotel Partners and Singapore sovereign wealth fund GIC purchased 27 hotel properties from NewcrestImage for $822 million.
Under the umbrella sector that is restaurants, hotels and leisure, TPG has been the top investor since 2017 with 17 deals, followed by KSL Capital Partners with 16 pacts and Roark Capital Group with 11.
Here are the most active investors by deal count since the start of 2017.
Featured image by Magnilion/Getty Images
Learn about our editorial standards.
