How Private Equity Firms in the US, UK, and Middle East Can Dominate 2025 Travel Revolution with Luxury, Experience & Tech Investments

Published on November 25, 2025

The travel sector is a rapidly evolving industry, experiencing consistent growth and shifting dynamics that present new opportunities for investors, particularly private equity firms. Over the past few years, various factors, such as technological advancements and changes in consumer preferences, have shaped the travel market in unprecedented ways. As travel continues to expand globally, firms with an interest in leisure and luxury travel can expect an array of investment prospects.

The Travel Industry’s Growth and Market Performance

The global travel market has experienced a steady upward trajectory, with a compound annual growth rate (CAGR) of 3% from 2017 to 2024. This growth is forecast to accelerate, largely driven by increased travel from emerging regions like Latin America and the Middle East. The travel equity market has reflected this positive trend, with significant market activity and a strong total shareholder return (TSR) performance since 2019. However, since 2020, the average size of transactions has decreased, signaling a shift towards smaller investments in most travel segments. This change in transaction size opens up new opportunities for investors looking for smaller-scale ventures in the travel space.

Private equity firms, both in the US and internationally, need to understand how changing market dynamics are impacting travel preferences. Factors such as the integration of artificial intelligence (AI) and shifting generational travel preferences are among the key influences guiding this transformation.

Changing Traveler Preferences for Experiences

A major trend driving growth in the travel sector is the evolving demand for unique and personalised travel experiences. For decades, consumers have allocated a larger portion of their disposable income to experiences rather than material goods, and travel has been a significant beneficiary of this shift. Tourists are increasingly seeking adventures that go beyond traditional leisure trips, opting for experiences that allow them to disconnect, engage in nontraditional activities, and embrace community and social-based travel.

Travelers are increasingly prioritizing experiences where they can unplug from the daily grind. Whether it’s hiking in remote locations or relaxing in secluded resorts, these trips often fall under the category of adventure tourism. While the surge in adventure travel post-pandemic has stabilised, this segment continues to witness steady growth in revenue.

Furthermore, there is a growing demand for nontraditional experiences. Trends such as noctourism, which involves exploring destinations after dark, and wellness tourism are gaining momentum. Likewise, culinary tourism and immersive cultural and art-based travel are becoming popular options. As travel costs rise and social media showcases unique destinations, many tourists are opting for less commercialized, off-the-beaten-path locations, which offer a more authentic travel experience.

The Rise of Social and Community Travel

Another significant shift in travel trends is the rise in social and community-driven travel. Many travelers are opting to explore the world with others, whether through group tours, solo traveler collectives, or multigenerational family trips. In the US, family travel represents the largest leisure segment, with 44% of leisure trips involving family vacations. Moreover, multigenerational travel, where multiple family generations travel together, is on the rise, representing 46% of family trips. The growing availability of diverse accommodations and travel options that cater to families has driven this trend, providing ample opportunities for investment in family-centric services and facilities.

Multipurpose Travel: Combining Leisure with Business

Another trend that has gained traction in recent years is the concept of multipurpose travel, where travelers blend business trips with leisure activities or visits to friends and family. This type of travel enables people to combine work commitments with relaxation or personal time. Wellness tourism has seen an increase as individuals seek to integrate mental health, relaxation, and physical well-being into their vacations. Other popular combinations include event tourism, volunteer travel, and digital nomadism. Recognizing this shift, major travel companies have adapted by creating platforms that allow customers to book multifaceted trips that mix different elements of travel.

Luxury Travel: Growing Demand Among the Affluent

Luxury travel is another area of the market that is showing rapid growth. Driven by an increase in the number of high-net-worth individuals, particularly in emerging markets and among younger generations, luxury travel is expanding at a rate of 6% CAGR. This growth rate is higher than the broader travel industry, reflecting the growing demand for exclusive and high-end travel experiences. North America, Asia, and the Middle East are the regions experiencing the fastest growth in luxury travel.

As wealth in these regions continues to rise, luxury travel companies are evolving to meet the demand. High-end hotel chains are increasingly offering exclusive services, such as luxury yacht charters, private jets, and memberships in exclusive travel clubs. Fashion brands have also entered the luxury travel space, with hotels owned by iconic names like Bulgari and Versace catering to affluent travelers.

The Impact of Technology on Travel

Technology is playing an increasingly important role in shaping the travel experience. The rise of generative AI is changing how travelers plan their trips, making travel planning more efficient and personalised. AI is now being used to assist travelers in finding destinations, selecting accommodation, and creating itineraries. According to a recent survey, 29% of travelers reported using AI for travel-related tasks such as finding inspiration, recommendations for local food, and transportation planning.

Travel companies are also leveraging AI to enhance customer service and personalise the guest experience. For example, hotels can collect data on a guest’s preferences, such as ordering tea every morning, and use that data to customise the guest’s experience. Additionally, AI-powered systems are being used for web traffic generation, driving search engine optimization (SEO) improvements by offering tailored recommendations for travelers.

Furthermore, AI-powered travel planning tools are providing customers with the ability to customise their travel experience on a scale never before possible. Platforms like Airbnb, Marriott Bonvoy, and Accor Live Limitless allow guests to select features tailored to their preferences, such as room views or hotel amenities, giving them the ability to “build” their ideal vacation experience.

Investment Opportunities for Private Equity Firms

As new travel trends continue to emerge, private equity firms have a range of investment opportunities to explore. One such area is adventure travel, where companies offering unique outdoor experiences are positioned to capture market share. The growing popularity of expedition cruises, particularly those focused on remote destinations and wildlife experiences, is creating strong demand for this niche market. Luxury yachting is also on the rise, with increasing demand for chartered yacht services, presenting an opportunity for private equity investments in yacht charter operations.

Another promising investment opportunity lies in the wellness tourism sector. As consumers prioritise health and well-being, wellness resorts and experiences are becoming increasingly popular. Private equity firms can tap into this market by partnering with wellness retreat operators or investing in facilities that offer comprehensive wellness services, including postnatal care and restorative treatments.

Moreover, the market for marinas is experiencing a surge in demand, particularly in the Mediterranean region. As more people invest in luxury yachts, the demand for high-end marina services is outpacing supply. With a limited number of marina berths available and a growing number of yachts, private equity firms can invest in marina infrastructure to capitalize on this market gap.

Embracing New Technologies for Future Growth

The travel industry is increasingly relying on AI and automation to streamline operations and improve customer experiences. Private equity firms should look towards technology companies offering solutions that enhance travel services, such as AI-powered search engines, cloud-based reservation systems, and automated customer service tools. Additionally, investing in automation technology for areas like baggage handling and hotel check-ins can help meet growing consumer demands for seamless travel experiences.

As the travel industry continues to evolve, private equity firms have a unique opportunity to capitalise on the emerging trends of experience-driven tourism, luxury travel, and technological advancements. By staying informed of market shifts and consumer preferences, investors can position themselves to take advantage of the lucrative opportunities the travel sector has to offer.

[Source McKinsey And Company]