Latin American online travel company Despegar is reporting adjusted EBITDA of $9 million in the fourth quarter of 2021, a 9% increase above Q4 2019, despite gross bookings rising only 75% of the same quarter’s level.
Gross bookings for the quarter ending December 31, 2021, were up 46% quarter-over-quarter to $958.8 million. On a year-over-year basis, gross bookings increased 139% and were 25% lower than Q4 2019 levels.
Excluding extraordinary charges and Koin, Despegar’s merchant payments solution in Brazil, the company’s CEO Damian Scokin says its improvement in profitability is “even more impressive,” and adjusted EBITDA for the fourth quarter of 2021 would have been $16.3 million, 30% above the comparable Q4 2019 level.
Transactions rose 22% quarter-over-quarter and to 82% of Q4 2019 volume, with mobile representing 47% of transactions in Q4 2021, up 333 basis points compared to the fourth quarter of 2019. On a year-over-year basis, transactions rose 86% but were 18% below Q4 2019 levels.
Room nights rose 32% quarter-over-quarter to 71% of Q4 2019 levels.
Revenues increased 49% quarter-over-quarter to $124.6 million, or 86% of Q4 2019 levels. On a year-over-year basis, revenues grew 134% to $124.6 million.
Net loss for Q4 2021 was $3.8 million compared to a net loss of $2.1 million in Q4 2020.
Gross profit increased 73% quarter-over-quarter in Q4 2021 to a record $73.7 million since the onset of the pandemic, with the gross margin expanding 799 basis points to 58%.
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In its Q4 2021 earnings statement, Despegar says it has reached an agreement to acquire a 51% ownership stake in Brazilian vacation rental channel manager Stays for approximately $3.1 million.
“Given the relevance of Brazil’s travel market and consistent with our M&A strategy to acquire new core competencies and broaden our product portfolio, we have agreed to acquire 51% of Stays, the leading channel manager in the vacation rental segment in that country,” Scokin says.
He adds that Despegar’s loyalty program finished the year strongly, with membership nearly tripling sequentially to 2.8 million customers.
Sales and marketing expenses for the fourth quarter of 2021 rose 163% year-over-year to $34.6 million, an increase of 33 basis points as a percentage of gross bookings when compared to Q4 2020. The company says the increase reflects branding and performance marketing investments in countries with strong recovery trends.
“Despegar’s encouraging fourth quarter results reflect the efforts we have made over the last two years to reduce our cost structure, capture synergies from acquisitions, diversify our revenue streams and increase profitability. These initiatives have significantly boosted our company’s earnings power, which is growing with improving demand conditions that we benefited from this quarter,” Scokin says.
“While Omicron is still dampening travel trends in the current quarter, we anticipate seeing a recovery in travel purchases next quarter and expect to benefit from substantial pent-up demand during the remainder of the year.”