Despegar partners with HBX Group to expand travel options

BRITISH VIRGIN ISLANDS - Despegar.com, Corp. (NYSE:DESP), a prominent travel technology company in Latin America valued at $1.61 billion, has entered into a strategic partnership with HBX Group, a key player in the B2B travel technology marketplace. This alliance aims to broaden Despegar’s service offerings by incorporating HBX Group’s European and North American non-air inventory into its platform. The announcement comes as Despegar’s stock has shown remarkable strength, delivering a 104% return over the past year. InvestingPro analysis indicates the company is currently trading near its Fair Value, with 12 additional key insights available to subscribers.

The partnership is designed to provide Despegar’s customers, both in the B2C and B2B sectors, with greater access to a variety of accommodations and travel solutions. By leveraging HBX Group’s inventory, Despegar intends to enhance its travel packages and lodging options, aiming to offer more value and choice to travelers.

According to the terms of the agreement, HBX Group will make an advance payment to Despegar, and in return, Despegar must achieve certain booking targets for HBX Group’s products over an anticipated period of approximately eight and a half years. If Despegar fails to meet these targets, it may incur penalties, including payment of a percentage of the shortfall amount. The partnership comes at a time when Despegar demonstrates strong operational performance, with impressive gross profit margins of 71% and revenue growth of 16.7% in the last twelve months.

Damian Scokin, CEO of Despegar, expressed enthusiasm about the partnership, stating it will not only improve their product offerings but also strengthen their commitment to delivering excellent travel experiences at competitive prices. Similarly, Nicolas Huss, CEO at HBX Group, highlighted the joint effort to redefine the travel experience for customers by offering an unparalleled selection and value.

This collaboration is expected to enhance the travel options available to Despegar’s customers, providing them with more flexibility and choice, while also giving HBX Group’s accommodation suppliers access to Despegar’s extensive distribution channels. The partnership underscores both companies’ commitment to innovation and customer satisfaction in the travel industry.

Despegar has been a transformative force in Latin America’s tourism sector for over two decades, revolutionizing the industry with technology. The company operates in 19 countries across the region and is listed on the New York Stock Exchange. For detailed insights into Despegar’s financial health and growth prospects, including comprehensive valuation analysis and expert projections, access the full company research report on InvestingPro, available alongside 1,400+ other detailed US equity reports.

The information in this article is based on a press release statement.

In other recent news, Despegar.com has seen a flurry of activity. The company’s acquisition by Dutch holding company Prosus (OTC:PROSF) has led TD Cowen to upgrade Despegar.com’s rating from Sell to Hold, with a new price target of $19.50. The acquisition price aligns with this target, reflecting a 33% premium over the prior closing price. This development follows a year of impressive momentum for Despegar.com, including a 105.71% year-to-date return and strong revenue growth of 16.73%.

In addition to the acquisition, Despegar.com has reported increased net revenue and adjusted EBITDA for the recent quarter, surpassing estimates from Morgan Stanley (NYSE:MS). The online travel agency has also announced a 10-year lodging outsourcing agreement with Expedia (NASDAQ:EXPE), slated to begin in 2025. Despite foreign exchange challenges, particularly in Brazil and Mexico, Despegar.com maintains a positive revenue outlook and has increased its adjusted EBITDA forecast.

Morgan Stanley has echoed this optimism, upgrading earnings forecasts and lifting the stock target by 23%. These developments, combined with strategic B2B and Software (ETR:SOWGn) as a Service initiatives, indicate a promising trajectory for Despegar.com. However, the company’s future performance will be influenced by the successful completion of the Prosus acquisition and the implementation of its long-term growth strategies.

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