Company has a portfolio of 420,000 homes worldwide, 70,000 of which in Latin America
07/18/2022
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Sector has been strengthened by remote work — Foto: Getty Images
After completing the acquisition of Stays.net — a Brazilian company that manages reservations for real estate owners on platforms such as Booking, Airbnb, and Expedia — online travel agency Despegar is expected to expand in the vacation rental segment. Ivan Marenco, vacations rental VP at Despegar, says the sector has been strengthened by remote work, attracting investments from groups such as travel and tourism company CVC, which at the end of last year increased its stake in vacations rental company VHC to 100% from 69%.
Currently, Despegar, which is known as Decolar in Brazil, has a portfolio of 420,000 homes in the segment worldwide, of which nearly 70,000 in Latin America. With the acquisition of Stays.net, announced in March and completed earlier this month, the company will add 20,000 more homes to its portfolio.
“We want, in the next three years, to multiply the number of Stays properties by five,” the executive told Valor. The addition of Stays into the portfolio puts Despegar close to its goal of ending 2022 with 100,000 properties on its platform in Latin America.
According to the executive, rental management platforms like Stays have a small presence in the region, unlike other markets. “In Latin America, the segment is not so mature yet. We see that only 10% of vacation rental properties have managers. When we look at more mature markets, such as Europe, this percentage is 50%. This gap is a great opportunity that we see for Stays and Despegar,” he said.
With this strategy in sight, Despegar bought a 51% stake in the company for R$15 million. Stays operates basically in Brazil, but Mr. Marenco said that there are already studies to expand its scope to Mexico at first. Other markets such as Colombia and Argentina are also on the radar.
According to a study carried out by Deloitte in 2021, 43% of travelers opted for a temporary rental during the pandemic. Of that total, three out of four kept that option after things went back to normal. Data from Despegar shows that, on average, the segment has a 10% lower price than typical hotels.
The sector has been gaining strength, especially given the decision of companies to extend their vacation policies and the greater flexibility given to workers, which have supported new trends such as the so-called “workation” or “anywhere office.” These phenomena allow workers to extend their stay and schedule a longer trip, often with their families.
The opportunity exists and has been explored by several companies in the sector. Airbnb, a platform that connects properties for rent and tourists, reported a revenue of $1.5 billion in the first quarter of this year, up 70% year-over-year and 80% compared with the first quarter of 2019 — before the pandemic.
The company’s outlook is quite different from that reported by many traditional hotels, which are still struggling to recover their pre-pandemic numbers — especially operations more focused on corporate demand, which shrank dramatically in the pandemic.
In Brazil, CVC, the country’s largest travel agency, had already been eyeing the vacation rental market since 2019, when it bought control of U.S.-based VHC. Its executives realized that it would be an avenue of growth to be explored. Since August last year, CVC has owned 100% of VHC, which operates mainly in the United States, Brazil, and the Dominican Republic. The business focuses on properties for higher-income customers and is in the process of expanding to markets such as Europe.
*By Cristian Favaro — São Paulo
Source: Valor International