Business

Brazil's largest tour operator CVC will bet on home-rental platform VHC, acquired four years ago, to resume growth in 2021

Betting on the sector's in the second half of 2021, the company also wants to create "theme marketplaces" for travel products

São Conrado beach, in Rio de Janeiro, Brazil, 2014. Photo:Reuters/Sergio Moraes/ File Photo
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  • The company, which has the largest chain of franchised stores in Brazil’s travel sector, also intends to launch, later this year, a program of independent salespeople, in a format similar to that already used by cosmetic giants like Natura and Avon, aiming at expanding sales to customers;
  • In the international travel market, CVC expects a more consistent recovery only after 2022.

One of the largest tour operators in Latin America, CVC, will launch new business arms this year to gain efficiency and prepare itself for a possible vigorous resumption of Brazil’s travel market in the second semester, executives told analysts on Wednesday.

The company will concentrate investments in its subsidiary VHC, acquired by CVC in the United States in 2017 and which works similarly to Airbnb. The strategy includes expanding the base of available properties from around 225 today to about 8,000 “in a few years” and also launching VHC operations in Brazil and the Iberian peninsula in 2021, the company’s chief executive, Leonel Andrade Neto, told analysts and investors.

READ ALSO: Coronavirus variants and restrict borders: 2021 will still be mostly a year for domestic travels in Brazil

“VHC is a jewel for our business,” said the executive, one of those responsible for creating Smiles customer loyalty company. “We will invest heavily in VHC … It was the only sector that benefited from the pandemic and will be our biggest focus of expansion,” added CVC’s president without, however, giving details about how the company intends to do it.

The company, which has the largest chain of franchised stores in Brazil’s travel sector, also intends to launch, later this year, a program of independent salespeople, in a format similar to that already used by cosmetic giants like Natura and Avon, aiming at expanding sales to customers.

These independent sellers will work complementarily to physical stores, will not use the CVC brand, and will be paid a “much lower” remuneration than that received by franchisees, said Andrade Neto. “If we don’t do it [the independent sellers’ program], someone will do it, and we have the best conditions to do it because we have scale and knowledge,” said the executive.

READ ALSO: Brazil’s travel group CVC Brasil to shut down operations of its Mexican and Colombian arm Almundo

CVC wants to create “theme marketplaces” for travel products

In the presentation, held one day after the announcement of the resignation of four members of the company’s board of directors, Andrade Neto also stated that CVC wants to create a “theme marketplaces” for travel products, including offers aimed at specific audiences such as the elderly, religious and LGBT consumers.

According to the executive, the recovery of the national tourism market, which had been gearing up in the second half of last year, slowed down at the end of 2020 amid the second wave of COVID-19 infections. “I’m more comfortable today than at the beginning of December because the solution is given. Despite all the delays in Brazil, we will have vaccination, and we will end the year with the population entirely immunized,” said the executive. He stressed that the company has about 1,250 stores open in the country, 90% of its base before the pandemic.

READ ALSO: Airlines face more turbulence before vaccine relief

But in the international travel market, a more consistent recovery is expected only after 2022, said Andrade Neto. He added that, as a result, in 2022, CVC will be the same size as it was in 2019.

Throughout the presentation, Andrade Neto, who was elected to the CVC presidency in April last year, criticized the company’s previous management team regarding the lack of investments in technology and process improvement. According to him, CVC has 10 internal departments, “back offices,” “that barely speak to each other and are working manually.” To fix this, the executive is promoting a major digitization program to integrate the areas and simplify processes to support the launch of new products, which include a new company application for customers by April.

Translated by LABS

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