Despegar Opens Travel Agencies to Prod Travelers to Book Online

16.02.2024 - 21:19 / skift.com / Latin America / Dennis Schaal / Damian Scokin

Why pay Google even more to acquire customers when your company can open travel agency storefronts, and counsel customers to book trips online?

It’s not intuitive, but that’s a customer acquisition strategy for Argentina-based Despegar, one of the largest travel brands in Latin America.

Skift interviewed Despegar CEO Damian Scokin about the company’s online-offline strategy, its relationships with Expedia Group (Expedia has a 16% stake in the company) and Hopper, and efforts to expand internationally. Scokin, who’s been CEO since 2017, also discussed the company’s M&A strategy, and early generative AI products.

Following are some of the highlights:

Damian Scokin: One of the big opportunities is that half of the market is still offline in Latin America. That’s the largest portion of offline in a market anywhere in the world. It’s because of the means of payments, it is because of financing, a lot of things. Since we bought Viajes Falabella in 2019, and that was further enhanced when we bought Best Day in 2020. We have developed an operating model and a specific technology platform for operating very light offline stores that make that channel extremely profitable.

So, as you know, as of last quarter, we opened the first Despegar stores in Argentina, we’ll open five, and in Brazil [where Despegar operates under the Decolar brand], we’ll open 10. Those offline sales, both offline stores and call centers, represent 13% of Despegar’s bookings.

It’s still very minor and we don’t expect that to grow significantly. But because we are using those stores to capture consumers, and transform them into digital consumers, once we capture the data, once they become familiar with the way Despegar operates, it’s very easy to obtain their loyalty in the digital space.

Dennis Schaal: The goal is to grow your online share as a percentage of your business and for the offline to diminish?

Scokin: I wouldn’t say diminish. In the long term, certainly the growth of the online is much larger. But in the next couple of years, we will perhaps open a few more stores as a way not to become an offline company, but rather as a means of acquiring customers.

Schaal: It’s ironic. You are opening physical stores as a means of capturing online customers.

Scokin: You’re right. This is a contradiction in terms. But let’s look at it this way. It’s a different way of acquiring consumers rather than paying Google. And these are customers who don’t necessarily feel comfortable in transacting online.

A spokesperson for Despegar: Physical branches give us the possibility of reaching a segment of customers who have a preference for offline. Through the advice provided in the stores, we can encourage their next contact to be online and