Competition is heating up in the Latin American online travel market. As the number of Internet savvy consumers in the region grows exponentially, online distributionis becoming a “must” for travel companies. Travel booking is still a largely offline process in Latin America, but that is about to change. Local and global companies are coming up with new ways to reach the travel consumer. PhoCusWright asked Mr. Roberto Souviron, CEO of Despegar.com, a leading regional online travel agency (OTA), for his perspective on marketplace competition.
“We believe that the Latin American market has always been a highly competitive field. Since we began 10 years ago, we have seen the rise and fall of many highly funded online initiatives and most airlines have a strong presence and commitment to online distribution. On top of this, airlines moving to zero commissions makes the game even more challenging,” said Mr. Souviron. “But what is unique in Latin America is the sense that we are not playing a fully online game here. A great majority of transactions still happen in our call centers, and even those that take place on a Web site still need some kind of manual process due to the airline restrictions and unwillingness of customers to pay with credit cards.”
The growth of online travel in emerging markets like Asia, the Middle East and Latin America represents a huge opportunity for global and local travel companies alike. Clearly, the OTA landscape is becoming more interesting around the world and Latin America is no exception.
One of the largest and most complex markets in the region is Brazil. As both a global center of commerce and a Portuguese speaking nation surrounded by Spanish speaking countries, Brazilian travel companies must balance cultural differences with regional interconnectivity. Several companies are competing for this lucrative market. Regarding the Brazil market specifics, Souviron added:
“Brazil is a clear example of a highly competitive market. Airlines like GOL, TAM, AZUL and Webjet have a strong online strategy competing fiercely for every online shopper. On the OTA front, Submarino.com, which is by far the leading e-commerce site of Brazil and one of the largest e-commerce organizations of the world, is a highly skilled company with great management which knows the game and the market. We believe that they are and will continue to be our closest competitor for the coming years. We have been competing with them for the last four years and we are doing pretty well sustaining our leading position on both the air and hotel business in Brazil.”
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