Connecting Many Services, Offering Many OptionsThu, 12/01/2016 - 12:34
Q: How is Despegar.com capitalizing on Mexico’s growth in air passengers?
A: Mexico ranks third in importance among the 21 countries in which Despegar.com operates, after Brazil and Argentina. We are betting on a combination of a wide touristic offer, competitive prices, financing opportunities and the technology that backs our platform to keep our position as industry leaders and to help us increase our client base. One of the main advantages of the tourism sector is that it can be automated easily. We believe our online sales strategy will allow us to maintain our double-digit growth for the next few years. Despegar.com will capture the natural increase of the tourism industry and attract clients from less efficient sales channels.
Q: What are the main advantages that Despegar.com offers over its competitors?
A: As the largest travel agency in Latin America, we are in an advantageous position to create agreements with various suppliers. Through these agreements, we can offer quality products all over the world. Our strategy focuses on variety and price. We are trying to reduce the steps to acquire a product, both on our webpage and through our app. Mexico has the largest number of sales through mobile devices in Latin America. Twenty-three percent of our sales were performed through tablets and cellphones. This high percentage can be explained by the ease of use of the platforms and the offers we make available.
Q: Which alliances were necessary to support your operations?
A: We have connected 200,000 hotels at a global level but our agreements extend beyond hotels and flights, including arrangements with several banks to offer interest-free credit. We are pioneering an e-wallet application alongside Bancomer, which will generate a temporary credit card number while an online sale is performed to ensure a simple and safe process. The company also is developing a co-marketing strategy to allow customers to pay with points. Banks are essential for the industry and associating with a financial product allows us to increase sales without sacrificing our profit margin.
We have alliances with promotors at international destinations, such as Visit Las Vegas and Visit Orlando, and national entities in Riviera Nayarit and Cancun. In Mexico, destinations such as Las Vegas and Orlando are extremely popular so we want to continue developing alliances of this kind. We also have smaller partnerships with technology developers, including Oracle, to develop automated service and operations solutions.
Q: How can Despegar.com shield itself from local and global economic fluctuations?
A: As a company, it is necessary for us to diversify our product and distribution because that allows the company as a whole to continue growing even if some areas shrink. We are working closely with the promotional councils of the destinations we work with to find ways to support them. In most cases, these efforts crystallize in alliances with the destinations, permitting us to offer additional discounts to visitors. Our ultimate goal is to provide customers with the best possible available offer.
In Mexico, we are in an excellent position due to varied and high quality local destinations. We have seen migration toward domestic destinations that pushes their growth. This is the case for Cancun, which has high occupancy rates and is growing as a tourist destination. Local alliances help us to weather global economic instability. It is always possible to use exchange rates to manage this risk through financial instruments. An IPO is a priority for us but not a necessity as we have solid financial and market positions. We will become public when necessary according to our strategy.
Q: What are Despegar.com’s short-term goals?
A: In 2017 we will focus on three areas. The first will be cellphone technology to increase our number of users. The second is product personalization. We want all our services to target individual users directly and according to their preferences. The third is the generation of dynamic packages to include airplane tickets, hotel reservations, car rentals and tickets to local shows with flexible dates. All this will be backed by technology that automates processes to generate savings while increasing sales.