Despegar CEO Damian Scokin says he’s “encouraged” by the Latin America-based online travel agency’s results for the three-month period ending December 31, 2020.
Transactions for the period grew 2X quarter-over-quarter. Excluding the contribution of Best Day, which Despegar acquired last January, transactions would have increased 74%.
Room nights increased quarter-over-quarter, while on a year-over-year basis, transactions and room nights decreased 56% and 61%, respectively.
Gross booking for Q4 increased 143% quarter-over-quarter to $401.3 million, but declined year-over-year.
Despegar reports revenues of $53.2 million, up 354% quarter-over-quarter but down 63% year-on-year.
Selling and marketing expenses decreased 74% year-over-year, compared to the 69% decline in gross bookings in the period. Sequentially, the ratio of marketing expenses to gross bookings remained relatively unchanged, the company reports.
Mobile accounted for 50% of transactions in Q4 2020, up 900 bps year-over-year.
"We’re encouraged by the quarterly results which demonstrate that the efforts and initiatives implemented throughout 2020 are delivering the expected results despite ongoing adverse market circumstances. In 4Q20, we i) consolidated three months of Best Day operations, ii) improved revenue margin, iii) kept our structural costs and marketing spend in check while continuing to focus on gaining further efficiencies and improving profitability and iv) closed the year with a strong balance sheet,” Scokin says.
“In this context, Despegar on a standalone basis was close to achieving Adjusted EBITDA break-even in 4Q20 when excluding Extraordinary Charges such as extraordinary cancellations due to COVID-19, restructuring charges and M&A and capital raise expenses.”
Scokin says recovery is still likely to be “bumpy.” Q4 recovery was strong in October and November, but Despegar observed a decrease in demand in December and January as COVID cases rose globally.
Brazil accounted for 45% of Despegar’s total transactions for the quarter, which increased sequentially by 56% and declined by 48% compared to Q4 2019.
In Mexico, transactions and gross bookings decreased 18% and 26%, respectively, on a year-over-year basis.
“As we look ahead, we have become a significantly leaner company, with a more diverse geographical reach through a broader footprint in Mexico and Brazil."