Despegar CEO: OTA to focus on in-destination experiences

South American OTA, Despegar, will improve app to increase sales of experiences

Despegar plan to grow their experiences offer through the tail end of the pandemic, seeing it as a “big growth opportunity”, their CEO Damian Scokin told ITB Berlin NOW.

The largest South American online travel agency acquired Mexican firm Best Day Travel Group in October 2020, having renegotiated terms that had been agreed before lockdown.

95 per cent of Best Day’s revenues came from hotels, packages and other travel products — such as in-destination activities.

Despegar said the acquisition would enhance their value proposition with a product mix aligned to their strategy,

When asked about what opportunities for growth Despegar could see, Scokin said: “Best Day provided, as you know, one of the largest operations with in-destination services. That’s part of the attractiveness of Best Day and the value they bring to the Despegar family.

“We need to strengthen our sourcing capabilities and we need to further improve on our digital platform in order to sell those as standalone products, but, given the traffic, we have the opportunity to cross sell those types of products into our customer base, either by just a single air ticket or a single hotel.

“It’s not only providing the inventory — the opportunity to go to a theme park to go to entertainment shows in Las Vegas or wherever — but to put that in front of the client since they are already using our app.”

Despegar generated $524.88m revenue in 2019, according to Statista. They also plan to grow their short-term rental operation.

“Green shoots” showing in Europe

Booking’s CEO, Glenn Fogel, said that they were beginning to see “green shoots” in countries such as Germany and the UK.

They are “still very very small, and we really need to see international travel lift up. That won’t happen until governments feel that it’s safe to have people come into your country,” he said.

Most of the second day of ITB Berlin NOW focused on marketing and distribution. Rebuilding trust, how and when to carry out performance marketing and carry out content marketing were some of the issues examined.

According to a TravelZoo survey carried out in January 2021, airlines were the only sector of travel to place in the 10 most trusted industries, coming in ninth.

When trust in travel was looked at specifically, tour operators placed sixth.

78 per cent of the 8,000 respondents said that trusting a company when booking a holiday was very important or somewhat important.

Trust in travel companies has fallen in Europe, but grown in the US and China, where tourism is considered a more important industry and there was better messaging around what was possible.

In Europe, slow refunds, poor messaging and governments kicking decisions into the long grass are contributing factors to the fall.

The best way to rebuild trust is to provide as much flexibility as possible on bookings. This was followed by implementing health and safety measures and testing. 75 per cent of respondents are willing to pay more to a company they feel they can trust.

Using flight searches to find travel intent

Nikos Diamantopoulos of Marketing Greece and Tom Starr of Amadeus’ Travel Audience crunched the data on finding travel intent from air travel searches to understand destination demand.

Some of the main challenges they saw were the decreased demand and increased competition in the market, the need to regrow that demand through trust and safety, and identifying the markets with intent for your destination and globally.

Using a mix of inspirational and reassuring messaging should help keep your experience at the top of consumers’ mind when it comes time to book.

Conversion-oriented marketing should only be used in markets where interest in your destination and globally is high. There are no exact answers as to when to run these campaigns because of the high-level of uncertainty. However, the inspiration phase will be longer.

Jan Starcke from Facebook said that the personas most likely to travel first, and therefore to target, are visitors, deal seekers, bucket-list travellers, and those who have been forced to reschedule. Operators should be ready for the announcement on when travel is going to restart to aim for conversions.

Following discussions on the potential of using virtual reality as a promotional tool and how to promote on podcasts, Rob Holmes from GLP Films talked about the strength of content marketing.

This should focus on quality storytelling and aim to build a relationship, be engaging and inspire emotion, communicate values and build trust. It should also be authentic, character driven, relatable, and show off the best possible experience.

In order for content marketing to be effective, it must have paid reach behind it.