Brazil’s CVC Corp.’s purchase of Argentina’s Almundo is a strategic move to increase its digital reach — but more importantly it helps CVC build even greater scale beyond its home borders.
While Despegar and Booking.com have arguably become household names for finding online travel deals in Latin America, the biggest travel company by bookings in the region is one that many may have never heard of: Brazil’s CVC Corp.
The group, which started in 1972 as Agência de Viagens CVC, has since grown into a parent company with several brands covering everything from cruises, car rentals, hotels, flights, and all-inclusive packages. While Brazilians likely have seen the name plastered on one of the more than 1,200 travel agency franchise offices around the country, the name probably isn’t recognizable to many travelers in neighboring Spanish-speaking countries. But that’s changing, thanks to some key international acquisitions and a plan to become more digitally focused.
But perhaps the most transformative deal is the $77 million acquisition of Buenos Aires-based Almundo, which CVC subsidiary Submarino Viagens closed in November. The transaction closed just about a year after Spain’s Iberostar Group upped its stake in the Argentine travel company to 75 percent. Almundo, which provides services in Argentina, Colombia, Mexico, and Brazil, recorded $60 million in net revenues and $425 million in reservations during 2018, according to a CVC filing.
Almundo will give CVC a leg up in the competitive Argentine online travel market — the Brazilian conglomerate has said the purchase will double its reach in the country.
But more importantly, the Almundo acquisition will provide CVC with the “omnichannel” sales platform the company has been developing for years. Under that model, Almundo provides services via physical travel agency offices, call centers, and online to reach all types of customers, from discount-savvy online shoppers looking for a last-minute flight to those who prefer to go over package deals with agents. Almundo CEO Juan Pablo Lafosse told Skift that Almundo is a “key piece in this transformation” of CVC to become more digitally focused, and that the two companies are highly complementary.
Lafosse underscores that Almundo is an “absolutely digital company,” although it has about 100 travel agency offices in the region. Almundo says that about 27 percent of its clients use assistance such as in-person services or phone calls when booking trips, whereas 73 percent book online. In terms of the share of billing from bookings, in the past four months that number is about 46 percent from assisted sales and 54 percent from the web, due to the median ticket prices on the web being lower than those in assisted channels.
One challenge in the Argentine market has been the weak economy and inflation’s impact on travelers’ willingness to buy flights there. In the last two years, volumes have reduced significantly, by about 40 percent, Lafosse said. Therefore, travelers have been opting for closer, cheaper destinations, and average prices have fallen. So, communicating promotions to customers as quickly as possible has been key.
“Today, the client is a client much more about promotions,” he said.
The acquisition of Almundo’s omnichannel platform will position CVC to compete with the likes of Buenos Aires-based Despegar in Argentina and beyond.
But while CVC made an acquisition to deepen its online sales platform, Despegar recently made an important deal with an important brick-and-mortar travel agency in the region to expand its own omnichannel ambitions. It recently purchased Latin America-based travel agent Viajes Falabella for $27 million in June, which operates in Chile, Colombia, Peru and Argentina.
The transaction is especially notable due to the reach of the overall Fallabella brand in Latin America — the company operates physical department stores, online shopping platforms, and banking services in addition to its travel agencies, all tied to its CMR Puntos loyalty program, now connected with Despegar.
CORRECTION: The executive pictured above, second from left, is Juana Melo Pimentel. In a previous version of this story, she was incorrectly identified as Fabiana Andrade Carneiro.
Kristin Majcher is a Skift contributor based in Bogotá, Colombia.
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Photo Credit: Pictured is a vineyard and the volcano Aconcagua Cordillera, part of the Andes mountain range, in the Argentine province of Mendoza. Brazil-based travel company CVC Corp. closed a $77 million acquisition of Buenos Aires-based Almundo in November 2019. Kseniya Ragozina / Adobe
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