Despegar has upgraded its mobile app and launched travel packages functionality as it looks to meet rising customer expectations.
Announcing fourth quarter 2022 results, Damian Scokin, CEO of the Latin American online travel agency, says the app enables faster booking with fewer information fields and more auto-population of any that remain.
Mobile currently represents about half of Despegar’s bookings.
Meanwhile, travel packages are preselected for customers based on travel preferences and customer data points, he adds.
“This new product feature significantly reduces the amount of time a customer needs to conduct a travel search and increases conversion rates by offering packages that are more likely to appeal to them. Over time, such innovations help set our brand apart and strengthen customer loyalty.”
Despegar revealed its fifth consecutive quarter of positive adjusted EBITDA, which increased 39% to $12.5 million year over year, and the company sees full recovery in the Latin America market by the end of 2023.
Gross bookings for the OTA were $1.1 billion for the quarter, an increase of 10% year over year and 82% of Q4, 2019 levels.
The company’s revenue increased 17% to $145.5 million versus Q4 2021, marking a return to 2019 levels.
Despegar’s net loss for the quarter increased to approximately $15 million compared with $12.5 million year over year.
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“We are nearing the end of the first quarter and I’m glad to report that travel demand has picked up considerably, which bodes well for the rest of 2023, particularly with regard to our operating leverage," Scokin says. "As such, we anticipate 1Q23 adjusted EBITDA in dollars to be in the 'mid teens' area. We are also initiating annual financial guidance and expect to deliver 2023 consolidated revenues in the range of $640 to $700 million and adjusted EBITDA between $80 and $100 million, in line with the projections we provided during last year's investor day, which assume a full recovery in Latin America’s travel market by year-end 2023.”
In terms of a market breakdown, Brazil made up 41% of total transactions in Q4, up 4% year over year, while gross bookings increased 44%.
Mexico accounted for 18% of transactions for the quarter and saw gross bookings increase 5%, while in the rest of Latin America transactions increased 24% and gross bookings were up 7% year over year.
Despegar says technology and product development expenses increased 28% in the quarter to $25 million.
Meanwhile, selling and marketing spend was up 34% to $46 million, attributed to brand awareness building and performance marketing in Brazil.