Paula Christi it’s just landed. But not because he literally got off a plane. With more than 3 million people throughout the country, the tourist movement last Easter was record, reported the Ministry of Tourism of the Nation. something to stop Take off -company of which the executive is general manager for Argentina and Uruguay- meant continuing the tailwind that the tourist giant already felt during the summer season, after the zone of turbulence which, after the storm of the pandemic, the tourist business was immersed at the end of November, when the Government decided to prohibit the financing of trips abroad in installments.
“There was a boom Interesting and relevant tourist at Easter. The sector is recovering very well. We hope that the trend will continue: we are already looking towards the winter holidays”, he says, in his dialogue with The chronicler.
Why so much movement at Easter?
There was a lot of demand, mainly from national destinations. A large volume of transactions was associated with the Pre-Trip, from people who had credit from the previous program and took the opportunity to use it on last week’s holidays. It is part of the recovery that the sector is experiencing. We had already seen it in the summer.
There is a lot of talk about a Pre-Trip 3. The industry is asking for it, Minister Lammens has every intention of launching it. The media published that he is about to leave. Is it still essential for the sector?
PreViaje was launched in 2020 and 2021. It is a tool that greatly helped the recovery. I understand that a third edition will have a slightly different format. Aim for low season, to help not so traditional destinations, but rather emerging ones. The high season already has a natural demand, which we saw this summer and, probably, we will also see it in the winter holidays.
“During Holy Week, there was a lot of demand. A large number of transactions were associated with people who had Pre-Travel credit and took advantage of it”
Is it no longer a crutch but can it continue to function as a cane for the tourism industry?
Sure. A slightly shortened version. A program of this type will be advanced. That PreViaje accompanies during the low season, it seems to me, is part of what we still need for the recovery.
This month, Despegar announced an agreement to finance trips with Efectivo S. Why?
For years, our regional value proposal has been to offer all possible products, accessibility through different channels and all available payment methods in all the markets in which we operate. In 2020, we bought a fintech Brazilian, Koin, which offers a product buy now pay later. That, which is expanding in Brazil, will reach other of the 22 markets in which we operate in the region. In Mexico, in fact, it already is. With this strategy of offering all means of payment, we made an alliance with Efectivo S: to provide the alternative of financing a trip with a personal loan.
Is it working?
We are just starting, three weeks ago we caught. We are still making adjustments. Simplifies the process of accessing a credit with preferential rates, directly from the option of means of payment of a trip. At what rate? The current floor is 53% and it goes up, depending on the credit evaluation. It has a limit of $1.5 million and up to 18 installments. In general, people choose 12.
Was it launched to replace the elimination of quotas for trips abroad?
It’s something we’re going to implement anyway.
Has taking off already overcome the impact that this prohibition meant?
The Central Bank measure was on November 24. That day, Black Friday was launched. For us, the biggest impact was that we had to rearrange all of our promotions and communication on very short notice. It was something we had been working on for several weeks because the entire market was waiting for the event. A lot is spent on Black Friday. Despegar suffered a 40% drop on expected sales. The sector, then, was accommodating. Argentines like to travel a lot: many decided to do it through Argentina and financed it with other alternatives. Then came the high season.
International tourism still hasn’t recovered?
There was some movement. In many countries, restrictions and requirements have been relaxed. We are starting to see some recovery trend. But there are so many variables that affect it that it is difficult to isolate one from another.
Omicron strong impact. December had the important wave. That caused the demand to drop a lot. Afterwards, we returned to an upward curve. But it happens in all passes. The projection is that the tourism industry is fully recovered by the end of 2023 or the beginning of 2024. But that recovery will take ups & downs. After Omicron, came the Russo-Ukrainian war. That made Latin Americans who wanted to go to Europe wait a bit. Now we are once again seeing good rates of demand for that destination.
“The recovery will have ups & downs. Omicron strong impact in the summer for international travel. Then came the Russian-Ukrainian war. That also caused many Latin Americans to postpone their flights to Europe. Now we are seeing good rates of demand again”
How far behind is the recovery in Argentina? In domestic airlines, for example, they celebrated the summer season but clarified that, in terms of passenger volume, they are still below 2019.
Despegar operates in 22 countries in the region. Weeks ago, we reported very positive results in Q4 last year. Although we closed lower than the same quarter of 2019, we were 25% higher in booking versus 2020 and a growth of 46% versus Q3 2021. Our ebitda it was positive. This shows that the decisions we made, to make costs more efficient, to be a lighter company, to rearrange our structure, were correct. Mexico and Colombia are markets that are already recovered. Brazil is doing well. Argentina has a good recovery. It is still a little below 2019. But we expect full recovery by the end of 2023. All sector reports predict that the recovery will initially be in domestic tourism. Later, the regional and, finally, the international long distance. In our case, Europe and the United States.
During the pandemic, the companies that stopped flying to Argentina made headlines. In the last few months, some started to come back. Will that return be sustained or prudent?
First, I’m glad the airlines are starting to come back. It is very important that Argentina is connected and is a competitive alternative. Those who travel on these flights are not only Argentines, but also foreigners who come. It is very important that the country is connected and that there are many airlines. This will increase the offer of flights. Keep in mind that while many lines are planning a comeback, this industry is plagued by complexities. For example, the fleets: in the pandemic, many got rid of planes and now they have to incorporate them again. But I am optimistic. I trust it will happen.
Argentina is still an attractive destination?
We are seeing that, in some bordering countries, they choose it as a destination. In March, Brazilians increased their demand on our platform by 96% compared to January and February. We expect many for this winter, in which Aerolineas will operate special flights to Bariloche, Ushuaia or Salta. We will be accompanying this operation with many promotions on our Brazil page. Chilean demand was also awakened. Inbound tourism began to recover. Slower than the national. But, to the extent that the requirements to travel are relaxed, they will begin to see Argentina more and more as a destination.
Also because of the exchange rate advantage?
In itself, Argentina is a destination with many natural, cultural and gastronomic attractions. Today, it is a quality alternative and super competitive in price, compared to other destinations. Ah, we have an opportunity to seize.
You mentioned before your expectation with the winter holidays. By that time, the fare bands for cabotage air tickets should already be in force. How do you think they will affect?
It is something that is still under discussion and there is not much information on where to go. It depends a lot on the implementation. I’d like to see what comes out. What you have to do is wait.
For you, conceptually, how does the existence of minimum and maximum prices influence tickets in a market?
My answer is that the more airlines there are and the more alternatives to fly that Argentines have, the better it will be for the industry. Hopefully we go in that direction. And those major alternatives are more airlines, better rates, flexibility, more route options… Any measure that restricts this premise is not good.
“We still have to wait to see what comes out with the fare bands. How will they impact? Any measure that restricts the premise that there are more options and flexibility to fly is not good”
In Brazil, Despegar bought control of Stays.net, a vacation rental management platform. What does that mean for the Argentine operation?
Stays is a tool of vacation rentals, with a very robust technology, which offers 17,000 properties of this type on its platform. In the pandemic we saw a strong trend, which continues thanks to remote work, which is the preference of travelers to combine vacations and work with long stays. The idea with Stays is to incorporate more properties in Brazil and expand it in as many markets as possible. So get to Argentina. What we offer ac is a very small volume of temporary rentals, which are the product of agreements. In three years, we expect to consolidate 140,000 properties throughout the region in Stays.
What is the advantage of having this offer through your own company and not with agreements, as until now?
A company like Stays complements our accommodation offer. This operation has two objectives. The first is to strengthen the brand proposal at Despegar holding level. The second is that you have a business already developed and that we are going to make it grow: the B2B. Companies of all kinds already have agreements with Stays and access all of their inventory.
Is there already movement for the World Cup?
We still don’t see much demand. There are many searches to Qatar. It makes people curious. Evaluate the possibility of going. But, for the moment, we see a calm demand compared to other World Cups that were played in closer countries, in which, at this point in the anticipation, the demand was greater. Going to Qatar is a decision.
How much does it influence that there are not so many options to get there?
It is more complex than going to other countries. We are still working with our partners to see what kind of agreements we can have, beyond what is currently available. Today, anyone can hire a flight. We would like to see if we can have something more closed.
The company today has more than 260 active personnel searches in the region and 180 are for Argentina. why?
Regardless of the context, there is a strategic plan for long-term growth. The acquisitions we made (this year but also Falabella Viajes before Covid) respond a lot to that. The pandemic put us in a parenthesis. It was time to take it back. This is a company that uses technology to develop its business and, for that, talent is key.