Despegar, the leading online travel company in Latin America with 17 million customers, recently announced its third quarter (July – September) 2018 financial results. The company said that while the number of transactions increased by 13%, from 2.3 million to 2.6 million the average selling price per transaction fell by 13% from US$484 to $421. Consequently, gross revenues declined by 2% to 1,092.3 million in the third quarter compared to the same quarter 2017.
The CEO, Damian Scokin, said that this was largely due to a 46% year on year depreciation in the value of the currency of Argentina and a 20% year on year depreciation in the value of the Brazilian currency. Brazil accounts for 40% of Despegar’s business. He also said that there had been a shift from international to domestic travel which also impacted these numbers. He concluded by saying he expected further industry deterioration in the 4th quarter.
In the first nine months of 2018 Despegar reported that the number of customer transactions increased by 16%, from 6.6 million in 2017 to 7.7 million in 2018. The average selling price per transaction fell by 6% however, falling from $484 in 2017 to $456 in 2018. Consequently, gross revenues grew just 10% in the first nine months of 2018 to $3.5 billion.
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Jim Hepple is an Assistant Professor at the University of Aruba and is Managing Director of Tourism Analytics.