Business

Latin America's leading online travel company, Despegar registers a 75% drop in revenues in 2020

Most of the travel restrictions that were in place in LatAm at the end of last year's third quarter were lifted by November 2020, but then the second wave of infections came

Despegar
  • Transactions grew more than 2X QoQ in 2020’s last quarter, but with the second wave of COVID-19 infections hitting the main Latin American countries, the travel sector suffered again;
  • Brazil was responsible for 45% of the group’s total transactions in the fourth quarter.

The Argentine group, and leading online travel company in Latin America, Despegar announced on Friday its earnings reports for 2020’s fourth quarter and also its year-to-date results.

With the travel sector hit hardest by the COVID-19 pandemic, the group’s revenue last year was $131.3 million, which represents a 75% drop compared to the $524.9 million revenue registered in 2019. The net financial loss reported in the year was $140.6 million.

Transactions grew more than 2X QoQ in 2020’s last quarter, but with the second wave of COVID-19 infections hitting the main Latin American countries, the travel sector suffered again.

READ ALSO: Brazil and Mexico show “resilience” in domestic travel, says Airbnb

Most of the travel restrictions that were in place in LatAm at the end of last year’s third quarter were lifted by November 2020, but then the second wave of infections came. “By mid-December, mobility restrictions were restored in Mexico and international borders closed again in Argentina. In Chile, restrictions returned in some jurisdictions interrupting travel within the country. In Colombia, some jurisdictions restored complete lockdowns,” wrote the company in its statement to investors.

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

Throughout 4Q20, Brazil’s aviation sector remained open to commercial travel. The country was responsible for 45% of the group’s total transactions in the fourth quarter. Gross bookings rose 80%, but fell 69% year-on-year, mainly due to lower demand as a result of the pandemic, the continued change in the mix for domestic travel, and the devaluation of the Brazilian real.

Despegar’s CEO, Damian Scokin, said that the company has learned its path to recovery, but that “in the long-run, is likely to be bumpy.”

READ ALSO: Casai expands across Mexico and is set to launch in new Latin American markets this quarter

“Q4 recovery was strong in October and November, but we observed decreased demand in December and January as COVID cases increased globally. A more linear recovery will depend on the pace of the rollout of the vaccination programs in our relevant markets and on the lifting of travel restrictions globally. Over the next few quarters, we will continue advancing on the successful integration of both Best Day and Koin, fostering our role as the preferred travel partner for well-known international players and clients, while keeping an eye on our bottom line. As we look ahead, we have become a significantly leaner company, with a more diverse geographical reach through a broader footprint in Mexico and Brazil,” Sockin told investors.

The region’s leading online travel agency, Despegar operates in 20 countries across the region and offers a wide range of travel products in its marketplace platform, from air tickets and hotel bookings to car rental and travel packages.

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