Despegar says revenue mix, average sales price and focus on profitable growth all contributed to a strong second quarter.
The Latin America online travel agency reported a 16% increase to gross bookings of $1.3 billion for the three months that ended June 30.
Travel packages, an area of focus for the business, now account for 33% of gross bookings, an increase of almost 6%, while average selling prices were up 15% to $585 million year over year.
Revenue increased 23% in Q2 to $165.5 million with packages, hotels and other travel products up 27% to $102 million. Adjusted EBITDA increased 183% to $30 million.
Net income at $28 million was the company’s first positive quarter since 2019.
Commenting on the results, Damian Scokin, CEO of Despegar, said: “Our momentum accelerated and we achieved a remarkably strong performance in the second quarter, with revenues reaching a new all-time high of $165.5 million despite operating in our seasonally weakest quarter.
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"There were three driving forces behind this growth. First, a significant improvement in revenue mix, as we continue to successfully increase sales of vacation packages, further expanding our margins. Second, a sustained rise in average sales prices, reflecting the value and quality that we consistently deliver to our customers. And third, our steadfast focus on profitable growth, resulting in a robust 12.9% take rate. From a geographic standpoint, we are particularly pleased with the continued expansion of Despegar’s key Brazilian business, with transactions up 39% year over year. Additionally, demand for international traffic continued recovering across our footprint and contributed to a 16% year-over-year increase in gross bookings.”
Despegar’s buy now, pay later business Koin improved to a EBITDA loss of $600,000 compared with a loss of $4.5 million year-over-year.
Scokin also commented on key milestones for the business including the growth in its “high-margin travel packages” business, adding that the expansion of its HotelDo B2B and its white-label solutions “remain on track.”
On artificial intelligence developments, Scokin said: “We’re increasingly employing artificial intelligence and large language models to enhance the customer experience as well as our operational effectiveness. We are preparing to introduce a beta version of our innovative AI trip planner in the third quarter of this year. Building on our robust machine learning models, this new tool will not only offer bespoke travel and accommodation recommendations, but also go further by creating a conversational experience to enhance our customers’ trip planning. Additionally, our developer team is using AI for code writing and aiding our after-sales team when addressing customer requests.”
Despegar’s mobile application accounted for 38% of gross bookings, up approximately 3% year over year. The company’s loyalty program increased 194% to almost 17 million members year over year.
The OTA is also developing its offline business in cash-based economies in Latin America. The plan is to open 10 stores in Brazil and five in Argentina by the end of the year.