Despegar Surfs Rising Wave of Mobile Travel Bookings in Latin America – Skift

A healthy performance in mobile bookings in Mexico and Colombia helped offset weakness in Argentina for Despegar, enabling Latin America’s largest online travel agency to prevent a decline in year-over-year revenue growth and avoid layoffs.

In 2018, the Argentine company reported $531 million in revenue, which was flat year-over-year growth. However, if you factor out a fluctuating exchange rate, revenue was up 19 percent, according to financial reports filed on Thursday.

Despegar only generated net income of $19.2 million, a year-over-year decline of 59 percent. But some may credit the company with eking out any profit despite an unforeseen economic and political crisis in its home market of Argentina.

Argentina’s crisis worsened in the last months of 2018, and its economy may not hit bottom until this spring, said Despegar’s executives on a call with analysts. In response, the company has trimmed its sails in the storm. It has cut its commissions, run sales for consumers, and slashed its marketing expenditure in Argentina.

Despegar saw better results in other markets, driving 10 percent year-on-year growth in Mexico and 61 percent year-on-year growth in Colombia.

A Bet on Mobile

The mobile revolution in Latin America may not be happening at the same breathtaking speed and scale as in China. However, many millennials in South America are embracing mobile devices as their primary internet device at a rapid pace. Despegar has been riding the trend by investing heavily in its mobile offering.

In 2018, Despegar saw ongoing growth in mobile transactions, up 34 percent, year-over-year. Mobile accounted for 36 percent of all of the company’s 10.4 million transactions last year. Customers aren’t just booking flights on their smartphones. Sales of vacation packages via mobile apps doubled year-over-year, for example. All other categories of products grew at double-digit rates.

Despegar rolled out features for its mobile app last year that included expanded notifications in WhatsApp, one of the most popular messaging services on the continent, to receive notices of check-in availability and alerts for the right airport baggage carousel for luggage pick-up. The company also made its flight search tool on mobile more flexible, such as by making it easier to find cheaper flights through alternative airports.

Expedia Group remains among one of the travel agent’s largest shareholders. Despegar depends on Expedia for hotel-booking services outside of Latin America. In the long run, the company, which operates as Decolar in Brazil, hopes to benefit as Latin America’s economies continue to develop.

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