At a stroke, Despegar will boost its annual revenue by about 25 percent. Acquiring Best Day Travel Group, one of the largest travel agencies in Mexico, will also solidify its set of products, including in the promising business-to-business segment.
The purchase price was 17 times Best Day’s earnings before interest, tax, depreciation, and amortization — a measure of profit — of $8 million last year.
In 2019, Best Day booked about $140 million in revenues, with about 70 percent of its revenue generated online and about 70 percent of it booked by Mexicans.
As Skift noted in its profile of Despegar earlier this month, the company wants to double its mobile bookings by 2025. Acquiring Best Day will help with that goal, enabling Despegar to boost its group annualized revenues by about a quarter.
Best Day primarily sells all types of travel to consumers. However, it also has a business-to-business unit, HotelDo, that offers wholesaler services. The company also is a provider of destination services.
“This acquisition is a significant landmark given our goal to continue expanding our operations in Mexico, Latin America’s most important tourism market and the seventh most important destination worldwide,” said Despegar CEO Damián Scokin in a press statement.
For more context, see our story earlier this month: “Latin America’s Despegar Wants to Double Bookings by 2025: How Realistic Is That?” and about the other giant player in Latin America via Skift’s profile this month of Brazil’s CVC Corp.
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Photo credit: The staircase located at the edge of cliff at the Mayan Ruins of Tulum in Mexico. Brain & Storm / Flickr