How Travel & Hospitality Tech Is Leveraging Advanced Technologies for M&A Growth

A pile-up of private equity dry powder predicts significant deal activity for tech companies in travel and hospitality. Last year, hotels and property management system deals dominated; this year, the market is expected to broaden into marketing software and further into aviation and other travel verticals. While the investor community remains committed to the vertical, software founders and smaller tech firms looking to sell or raise funds can help make themselves more attractive to buyers and investors by building sound businesses with smart tech integrations.

The travel and hospitality technology sector is moving beyond simply experimenting with advanced technologies like artificial intelligence (AI), machine learning (ML), and big data analytics to identifying which technologies add real value and putting them to work. The integration of these technologies is driving a significant transformation in the space, not only allowing users to enhance service offerings and meet evolving consumer expectations but also creating what we believe are attractive opportunities for mergers and acquisitions (M&A).

M&A Landscape: A Surge in Activity

In 2025, the sector is witnessing a surge in M&A activity, with private equity firms and strategic investors seeking to acquire companies in order to grow more quickly.

Private equity firms, in particular, are playing a significant role, with approximately $330 billion in unallocated capital earmarked for technology investments. These firms are actively pursuing acquisitions of travel and hospitality tech companies with annual recurring revenues between $5 million and $25 million, aiming to scale these businesses and prepare them for eventual exits. PE-backed platforms are also acquiring smaller tech firms to add capabilities, enter new markets, or add customers.

The success of a variety of cloud-based travel & hospitality platforms which have moved established systems into the digital world—such as Mews, Guesty, and former VPA client Hostaway—have caught investors’ attention. And there’s significant room for further digitization in hospitality software.

The Strategic Imperative of Advanced Technologies

The adoption of AI, ML, and big data analytics has become a strategic imperative for travel and hospitality companies aiming to stay competitive and responsive to customer needs. These technologies enable businesses to personalize customer experiences at an unprecedented level, streamline booking processes and customer service operations, predict and forecast demand patterns, or even react to market disruptions. Increased productivity and efficiency is also a key issue when there’s market uncertainty due to geopolitics, tariffs, and consumer sentiment.

HotelOnline confirms that AI/ML has garnered the most investment in travel sectors (65%) from 2019-2024, which means travel tech startups can’t ignore it.

In fact, no one can ignore it. Deloitte’s Tech Trends 2025 Report posits that it’s not just about more AI, it’s that AI will be ubiquitous in the way that electricity or the Internet is: we won’t even notice it, but we’ll expect it to work. They found that AI is the foundation and common thread for almost every tech trend in this year’s report. So the question is not whether companies should adopt AI, it’s how they should.

If we think of it a bit romantically, like EHL (formerly, École hôtelière de Lausanne, the world’s leading hospitality management school in Switzerland) does in their 2025 Hospitality Outlook report, the travel and hospitality space is the perfect candidate to nail down how to use AI to complement service, community, and authenticity. Travel—whether thrifty, solo, or luxury—is where people are looking for transformative experiences, wellness, and human connection.

How to Integrate AI: A Shift in Operations

While Large Language Models took up all the air last year, what’s next for AI might be small or medium language models that are trained on smaller sets of data to do discrete tasks, according to Deloitte’s 16th annual Tech Trends report. For example, one chatbot could be devoted to answering customer questions while a different model assesses revenue opportunities. Multimodal AI that takes input in more forms than just text and open-source options will enable organizations to build a series of models that do separate tasks.

One of the main things AI proliferation will demand of organizations is good data. If you unleash a model on incomplete or incorrect data, then the outputs will be twice as bad. Solid data governance, AI governance, and privacy compliance—especially as more data is available and shareable—will be crucial.

For example, AI-driven personalization in marketing allows travel companies to tailor deals based on traveler personas or circumstances that span a variety of languages, socioeconomic backgrounds, and purchasing preferences. Personalization is not just about increased satisfaction and loyalty, but meeting an expectation that today’s customers already have. However, integrating gen AI into things like targeted promotions and highly-tailored content requires a different organizational framework, new tools, and prioritization of validation by staff.

Applying personalization to other aspects of travel like hotel room preferences, dietary restrictions, transportation services, activity suggestions, and the like would also require clean data, trustworthy analytics, and well-trained teams. Predictive analytics for property maintenance, dynamic pricing, and staffing rotation means that multiple systems and teams need to be communicating with each other and accurately. But picturing the specific needs of a property owner and how AI could enhance and boost the functionality of that solution is a great way to start thinking about integrating advanced technologies.

Conclusion: Navigating the M&A Landscape

The integration of advanced AI technologies in the travel and hospitality sector is not just a trend but a fundamental shift that is reshaping the industry. For founders, understanding this landscape is crucial. Whether the goal is to grow independently or to position the company for acquisition, embracing AI, ML, and big data analytics is becoming essential.

Travel and hospitality tech founders should reach out to an investment bank to see where they stand in this complex environment. Vista Point Advisors offers strategic guidance to help assess your current value propositions and explore future M&A opportunities. Reach out to a banker if you’ve got questions or learn about the different benefits of a minority, majority, or full sale.

This material and the opinions voiced are for general information only and are not intended to provide specific advice or recommendations for any individual or entity. All opinions and views constitute our judgments as of the date of writing and are subject to change at any time without notice. The material may contain "forward-looking" information that is not purely historical in nature. Such information may include, among other things, projections, forecasts, estimates of market returns and proposed or expected portfolio composition.

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