Miami-based Viajo (www.viajo.com) sees no room for a third player in the Latin American online travel agency business, regional director Marcelo Young told BNamericas.com.
Viajo and current rival Despegar (www.despegar.com
) “were the first to shift from the offline to the online world, and I think there`s only room for two,” he said. “At the middle of last year there were almost 20 Internet agencies trying to copy the model that Viajo and Despegar started, but today there`s two of us left and I believe we`re going to be the only two to carry on.”
Viajo is the online division of conventional travel agency Felgueres Travel, which saw US$100mn in sales last year, of which US$20mn came from the online market. Meanwhile, Despegar closed the year with US$12mn in sales.
Regarding recent capital raised by Despegar, Young expected the rival site to maintain its current business model rather than rushing its path to profitability. Closure of the round shows that the model works, that there`s business and that various economic groups are interested in investing in the online travel sector, he said.
In Viajo`s case, existing funds should take the site through to its 1Q02 breakeven target, Young said, adding that the company is also in talks to acquire an offline agency, a deal that would be financed through a strategic alliance rather than a financing round.