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P1251949958XwSUb

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Is there any potential for online travel. in Latin America? ... The leading online travel agency in Iberoamerica. Who We Are. Management Group Profile: ... – PowerPoint PPT presentation

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Title: P1251949958XwSUb


1
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2
Building the online travel marketplace in
Latin America The Despegar.com strategy
  • Christian A. Vilate
  • Chief Product Officer

3
Agenda
  • Who we are
  • Is there any potential for online travel
  • in Latin America?
  • What are the challenges and rewards of entering
    the Latin American market?
  • How we deal with different cultures

4
Who We Are
The leading online travel agency in Iberoamerica
  • Launched in December 1999
  • Today full operational presence in 9 countries
  • 9 call centers with fulfillment offices
  • 100 employees

USA
Spain
Mexico
Colombia
Venezuela
Brazil
Chile
Uruguay
Argentina
5
Who We Are
  • Management Group Profile
  • 20 MBAs from top tier US Schools
  • From 8 nationalities
  • With experience in diverse areas, among others
  • travel industry
  • business consulting
  • investment banking
  • software implementation
  • media industry
  • telco industry

Institutional Investors Hicks, Muse, Furst
Tate Merrill Lynch Texas Pacific and The Accor
Group
6
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7
Agenda
  • Who we are
  • Is there any potential for online travel
  • in Latin America?
  • What are the challenges and rewards of entering
    the Latin American market?
  • How we deal with different cultures

8
Latin America in Figures
  • 500 million people
  • 15-20 with standards of living of first world
    countries
  • The fastest growingInternet region in the
    world

9
Iberoamerica is a healthy travel market...
Travel tourist demand in Latin America, Spain
Portugal
  • Improvements in hotel infrastructure
  • Increasing competition among airlines
  • More stable macroeconomic scenarios
  • Exchange rate stability
  • Resurgence of credit markets

600
500
519
400
6.4 CAGR
300
US Billions
263
200
100
0
1999
2010
Latin America
Iberia
Source WTTC
10
...with a huge opportunity for e-travel
  • Fragmented industry with no dominant leaders
  • Unreliable travel industry structure
  • Non-professional
  • Limited access to information and services
  • Frustrating buying experience for customers.
  • Inefficiencies and high cost systems
  • Non-transparent service agents run after
    commissions

11
Agenda
  • Who we are
  • Is there any potential for online travel
  • in Latin America?
  • What are the challenges and rewards of entering
    the Latin American market?
  • How we deal with different cultures

12
Challenges
  • Low PC penetration
  • High cost of telecomunication services
  • Lack of confidence in e-commerce
  • Lower credit card penetration / fraud risks
  • Non-transparent pricing policies regulated
    markets
  • Delivery process
  • Huge managerial effort
  • Understanding of cultural issues
  • Low look-to-book ratio

13
Rewards
  • Almost untapped market
  • Easier to achieve brand dominance / cheaper media
    cost
  • Very limited competition
  • Higher profitability
  • Inbound outbound tourism
  • First mover advantage is a key asset

14
Our Strategy
  • Expand regionally at a fast pace
  • Build strong local operations
  • Human touch customer service
  • Use technology as a key differentiator
  • Explore new segments

15
Agenda
  • Who we are
  • Is there any potential for online travel
  • in Latin America?
  • What are the challenges and rewards of entering
    the Latin American market?
  • How we deal with different cultures

16
Latin America is not a single country
  • Cultural diversity
  • Languages
  • Preferences traditions
  • Economic diversity
  • Payment methods
  • Currencies
  • Regulatory legal frameworks

17
Cultural differencies
  • Top 10 travel destinations coincide among
    countries...
  • ...but relevant content is different.
  • Andean countries (Colombia, Venezuela) Mexico
    are very US oriented
  • Brazil is almost a continent in itself
  • Southern cone (Argentina, Chile Uruguay)
    preference for european and caribbean
    destinations
  • Spain is a more sophisticated market with
    completely different tastes

18
Economic diversity
  • 2 hemispheres allows for seasonal
    diversification
  • Payment methods
  • Different currencies
  • Regulatory legal frameworks
  • Suppliers change from country to country

19
Our strategy
Make local what is localRegionalize everything
else
Operations
Technology
Contents
Brand Awareness
20
Local call centers
  • Customer service support tailored to each markets
    needs
  • Local language
  • Local 0-800 number
  • Staff trained in local editorial and travel
    content
  • Educational and selling mechanism
  • Goal is to migrate call center users to 100 web
    users
  • Call center is a necessary intermediate step from
    bricks to clicks
  • Reduces Latin American consumers skepticism

21
Local Presence
  • Higher understanding of each market dynamics
  • Opportunity to build and leverage local
    negotiations and to gain access to cheaper rates
  • Payment methods adapted to local usage
  • Local content (editorial commercial)
  • Cross selling of products among countries
  • Greater control of local operations

22
Local Fulfillment
Achieved through an association with a travel
agent
Revenue sharing
c
Travel Agency Carlson Wagon Lit
Back office capacity
23
Regional Economies to Scale
  • Technology lower labor cost
  • Brand awareness
  • Leverage local negotiations
  • Traffic deals with portals
  • Share best practices
  • Reference content

24
Regional Branding
TRAFFIC
REVENUES
Online and off-line advertising campaigns
Alliances
Public Relations
25
Results by now are very rewarding
  • Conversion rate (look to book) is steadily
    growing
  • Strong improvement in quality of products and
    reservation tools
  • Regional expansion completed
  • Products have become competitive compared to
    market rates

26
Thank you.
  • Christian A. Vilate
  • Chief Product Officer
  • cvilate_at_despegar.com

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