May 19. At the beginning of the pandemic, it was clear there would be plenty of mergers and acquisition targets. Despegar found at least a couple in Viajanet and Stays.
Despegar is hanging in there performance-wise, has high hopes for a pending acquisition of Viajanet at what might be considered an attractive price, and is investing in Brazil and Colombia to pick up market share.
Argentina-based Despegar, which does business in its largest market, Brazil, through its Decolar brand, intends to buy flight online travel agency Viajanet for $15 million based on a collapsed airline market — at half of Viajanet’s $30 million in 2019 revenue. Despegar expects the deal to close in late June or early July.
During its first quarter earnings call Thursday, officials discussed diversifying Viajanet’s product mix — its gross bookings are about 98 percent for Brazilian domestic flights — by cross-selling from Despegar’s supply, removing costs through synergies, and improving Viajanet’s performance marketing.
In addition to leaning into marketing in countries that are seeing the largest travel recoveries, Despegar, which operates in 20 markets, primarily in Latin America, reached an agreement in January to acquire 51 percent of “Brazil’s leading vacation rental channel manager,” Stays, for $3.1 million. Despegar expects that deal to close in the second quarter.
Despegar unit Koin entered into a partnership this month with Movii, a fintech company in Colombia, to expand a buy now and pay later offering in the country. This could help Despegar make inroads in Colombia, which has a substantial e-commerce scene, because access to credit cards there is limited.
Despegar Chief Financial Officer Alberto Lopez Gaffney told analysts Thursday that Despegar intends to lean into marketing activities in countries that are seeing the most aggressive travel recoveries.