Despegar collapses after admitting a cut in its expected income

Despegar’s stock market plunged by more than 10% after presenting its results, although it later reduced its losses because it “reduced its annual revenue forecast by 60 million dollars.”

“The revised forecast reflects between $35 million and $40 million in foreign exchange difficulties, between $5 million and $10 million of impact from flooding in Brazil and the remainder due to the divestment of a business unit,” after selling its incoming service to W2M from Bestday.

In its second quarter results report, Despegar Group noted that nearly half of all transactions (49%) were made through its applications, making them the central axis of the business within its omnichannel strategy.

Mobile downloads also increased 43% compared to the same period in 2023 with 18 million, allowing the company to reach a new all-time high. The company had a Conversion Rate of 13.8% in the quarter, a growth driven by demand from Brazil and Mexico for domestic air transactions.

Despegar achieved 46% higher revenues in this quarter compared to last year, and a 37% increase in gross bookings, while the B2B business experienced a 43% year-over-year expansion and White Label operations grew 7% year-over-year.

During the second quarter, its revenues amounted to US$185 million, with an adjusted EBITDA of US$37 million, 22% more than the previous year, with an adjusted EBITDA margin of 19.8%, so excluding extraordinary impacts from the previous year, EBITDA growth was 82% year-on-year.”

For its part, Pasaporte Despegar reached 27.9 million members throughout the region, with a 65% year-on-year increase. Approximately 75% of transactions are made by members of the program.

As reported by REPORTUR.mxit was recently announced that World2Meet (W2M) would strengthen its position in the Caribbean with the acquisition of the Despegar group’s inbound Destination Management Company (DMC), which formerly operated as BD Travel within the Bestday Group. Thanks to this operation, Iberostar’s Travel division strengthens its service offering in Mexico and the Dominican Republic. (Despegar sells Bestday’s former inbound business to W2M).

The company, which was renamed BD Experience, has more than 30 years of experience in the industry and specializes in passenger transportation. It offers services such as airport transfers, private and group tours, and assistance for tourists. This involved the transition of almost 600 employees, changing Despegar’s business structure.