Despegar, the largest online travel company in Latin America, recently sold its destination management unit, BDExperience, to World2Meet, a division of the Spain-based tourism company Iberostar Group. The financial terms of the sale were not disclosed, but the deal resulted in nearly 600 Despegar employees transitioning to become employees of World2Meet, which amounts to around 13% of Despegar’s workforce. The sale closed on August 1, with Despegar announcing it on Thursday. Despegar’s Chief Financial Officer, Amit Singh, stated that the divestment of BDExperience would have a “material” impact on the company’s financials, noting that the revenue per BDExperience employee is slightly lower than average.
Despegar and World2Meet have also entered into a long-term strategic alliance as part of the deal, with World2Meet set to provide destination services to Despegar in Mexico and the Dominican Republic. Despegar’s CEO, Damian Scokin, explained that the purpose of the deal was to streamline the company’s operations and allow it to focus on its core services of selling travel. BDExperience, as a Despegar brand with a 30-year track record, assisted tourists with group and private tours, airport transfers, and personalized assistance. Iberostar Group, the parent company of World2Meet, is a global tourism company that specializes in hotels and resorts, a vacation club, and destination services.
Destination management companies such as BDExperience use a network of travel providers in a specific destination to handle various tourist needs, including airport transfers, logistics support, and special events. By selling BDExperience, Despegar aims to better focus on its core services of selling travel, which would help the company become more efficient and leaner overall. While the financial terms of the deal were not disclosed, it is expected to have a significant impact on Despegar’s financials due to the transfer of nearly 600 employees to World2Meet. The strategic alliance between Despegar and World2Meet will allow the latter to provide destination services in Mexico and the Dominican Republic.
Overall, the sale of BDExperience by Despegar seems to be a strategic move to streamline operations and sharpen the company’s focus on its core objective of selling travel services. By partnering with World2Meet for destination services in specific regions, Despegar can ensure that it continues to offer a high level of service to its customers while also reducing operational complexity. The sale will also enable Despegar to reallocate resources and personnel to other areas of its business that are more aligned with its long-term goals. As a result, the company may become better positioned to capitalize on growth opportunities in the online travel industry in Latin America and beyond.
In conclusion, the divestment of BDExperience by Despegar to World2Meet represents a strategic shift in the company’s approach to its business model. By selling off a non-core unit and entering into a strategic alliance for destination services, Despegar is taking steps to increase efficiency, reduce costs, and focus on its core competency of selling travel. While the financial impact of the sale is expected to be significant, the long-term benefits for Despegar in terms of operational effectiveness and strategic positioning could outweigh the short-term costs. The move reflects a broader trend in the travel industry towards consolidation and specialization, as companies seek to adapt to changing consumer preferences and market dynamics.Ultimately, Despegar’s decision to sell BDExperience appears to be a calculated move aimed at strengthening its competitive position in the online travel market and driving sustainable growth in the future.
