Private equity firms are stepping up their investments in the global travel and tourism industry, targeting hotels, resorts, restaurants, and tour operators as they seek to capitalise on a sector rebounding strongly after the COVID-19 pandemic.

In the second quarter of 2024 alone, private equity (PE) deals in Europe’s tourism and leisure industry totalled nearly $823 million (€724.4 million), according to GlobalData. One standout transaction saw Ares Management Corporation and EQ Group acquire Landsec’s hotel portfolio in the UK for £400 million (€466.7 million).

Analysts say this uptick in activity is driven by multiple factors, including improved travel demand, constrained supply in prime tourism locations, and a growing preference for luxury and wellness experiences over material goods. During the pandemic, PE firms had already begun snapping up undervalued travel assets, anticipating future growth.

“Private equity now accounts for around 40% of M&A activity in the UK travel sector,” said Andrew Keller, director at Stax Consulting. “We’re seeing strong interest in tech-enabled and experiential travel firms, with many PE players adopting buy-and-build strategies.”

Graham Miller of the Nova School of Business & Economics notes that the hotel, resort, and restaurant sectors have seen significant PE interest. Investments are also rising in travel infrastructure and service firms, especially in emerging destinations like Central Asia and Scandinavia.

Demographic trends are also playing a role. “Affluent baby boomers nearing retirement are expected to drive higher future demand, while regulatory and construction cost barriers make acquiring existing hotels more attractive than building new ones,” explained Dr. René-Ojas Woltering of EHL Hospitality Business School.

To boost profitability, PE firms often remodel properties, streamline operations, introduce new technologies, and target high-margin segments such as luxury and group travel. In some cases, they also restructure debt and integrate AI tools to improve operations.

However, this aggressive transformation comes with challenges. Labour shortages, rising costs, regulatory barriers, and cultural clashes between investors and company founders can complicate the path to profitability. Maintaining service quality while implementing cost-cutting measures also remains a delicate balancing act.

“The alignment of investor goals with the company’s long-term vision is essential,” Miller said. “If not managed well, private equity involvement can threaten brand identity and sustainability.”

Despite macroeconomic uncertainties, the resilience of the travel sector continues to attract PE interest, as consumers remain eager to explore—albeit on shorter or more budget-conscious trips.

Apple Inc. posted better-than-expected earnings for its fiscal second quarter, but shares fell nearly 4% in after-hours trading on Thursday, as mounting concerns over declining sales in China and escalating tariff uncertainty dampened investor enthusiasm.

The tech giant reported a 5% year-on-year increase in revenue to $95.4 billion for the March quarter, surpassing analysts’ forecasts of $94.6 billion. Earnings per share also came in stronger than anticipated at $1.65, above the projected $1.62. Apple highlighted double-digit growth in its Services division and modest gains in iPhone sales, driven by demand for the newly released, budget-friendly iPhone 16e.

Despite the positive headline figures, investors focused on Apple’s weaker performance in Greater China, where revenue fell by 2.3% year-on-year to $16 billion. The dip follows an 11% decline in the previous quarter and reflects intensifying competition from domestic smartphone makers like Xiaomi and Vivo, as well as lagging innovation in artificial intelligence features compared to rivals.

In contrast, U.S. sales rose 8% over the same period. However, Apple CEO Tim Cook noted there was no evidence of consumers speeding up purchases in anticipation of new tariffs, suggesting that broader economic uncertainty continues to shape consumer behavior.

Tariff-related costs remain a looming challenge. Apple expects a $900 million increase in expenses during the June quarter if no new levies are introduced. While President Donald Trump recently exempted electronics from a fresh wave of China tariffs, existing measures continue to impact key components. Cook described the outlook for the second half of the year as “very difficult” to predict.

In response to ongoing trade tensions, Apple is reportedly accelerating efforts to shift iPhone production for the U.S. market to India, potentially starting in 2026. Cook confirmed that while some assembly has moved, most global production remains in China.

Apple’s Services segment, which includes Apple TV+, iCloud, and the App Store, saw revenue grow 12% to $26.7 billion. Though still robust, this marked a slight slowdown from 14% growth last quarter. The division is under scrutiny in the EU and U.S. over regulatory concerns related to digital marketplaces and payment systems.

Elsewhere, sales of Mac and iPad devices rose 7% and 15% respectively, boosted by the launch of new M3-powered models. However, the Wearables, Home, and Accessories segment declined 5%, a dip attributed to last year’s Vision Pro launch creating a tough year-on-year comparison.

Despite the uncertainty, Apple increased its quarterly dividend by 4% to $0.26 per share and authorized a new $100 billion stock buyback program. Still, shares have fallen 16% year-to-date, underscoring investor caution as the company navigates a complex geopolitical and regulatory landscape.

Apple forecast low-to-mid single-digit revenue growth for the current quarter, falling short of analysts’ expectations for a 5% rise.