Despegar gets boost from travel packages in Q1

Despegar has launched new features across its website and mobile application to boost customer engagement and enable cross-selling.

Reporting first quarter results for 2023, the company said travel demand in Latin America continues to recover with Despegar reporting gross booking up 44% year over year to $1 billion.

Revenue increased 41% for the quarter to $159 million while adjusted EBITDA for the online travel agency increased 154% to $17.3 million.

Commenting on the earnings, chief executive Damian Scokin said “higher margin vacation packages” are an increasing part of the revenue mix with packages accounting for 34% of gross bookings, up from 30% in the first quarter of 2022.

During an analyst call, Scokin referred to a recently launched “personalized homepage. This feature helps drive customer engagement by offering tailor-made flight and travel packages based on their purchase history. Engagement, as well as customer experience are also improved by providing information that enriches travel planning such as discount alerts and reels with travel tips and destination recommendations.”

For customers requiring help from an agent, Despegar has launched a video-assisted sales channel “helping customers transition from offline to online.”

“This not only improves conversion rates, but also enables our sales team to cross-sell travel products, such as travel insurance and extra baggage. Initial results across all initiatives have been very encouraging, helping us better monetize Despegar’s customer base.”

Responding to a question on artificial intelligence and whether the company would use ChatGPT to bring down cost of revenue, Scokin said it was “one of the many opportunities that this AI technology provides us."

“We are already working, particularly in customer service and operations, in training models to help us provide more channels for access and better service to our consumers. We've been already working for, I would say, a couple of years to read sentiment from text to speech to text efforts that have been in place for a while. So there's a lot of things that can be done and a lot of things we've been doing with AI and now even more with that ChatGPT."