Online travel agencies were big players in travel search during the pandemic in major Latin American countries. There's a bright future for these booking sites in the region as travel restarts.
Online travel sales in Latin America, which plunged to $9 billion in 2020, are estimated to bounce back to pre-pandemic levels of $22 billion by 2022, according to a recent study by Statista.
Online travel sellers were one of the pillars of the travel industry and they suffered as a result of the pandemic, but the study suggests they may be on a rebound.
In a 2020 survey conducted for the study, booking sites were found to be the most popular options to search for travel and tourism services among residents of major Latin American countries for that year.
“The Latin America inhabitants are highly digital, especially in Brazil, Argentina and Mexico, so the study doesn’t surprise me at all,” said Fernão Loureiro, who runs a travel consultancy in Sāo Paulo, Brazil. “ Given that, OTAs (online travel agencies) invest a high budget in ads both in social media as well as in newspapers, commercial breaks and football games.”
Although online travel agencies were prominent across Latin America, their main uses varied depending on the country. For example, in Brazil, booking sites were primarily used to book flights while they were used to book accommodations primarily in Mexico. In Argentina, online travel sites came in first as the preferred channel to book both flights and accommodations.
“It is an unstoppable trend in all means so the OTAs will definitely surf in a very positive wave for the upcoming years as people are becoming more and more digital and developing the taste of traveling as one of the most-desired things in life,” Loureiro said.
While Mexico had the highest online travel market share at 46 percent, Brazil took 31 percent, the study found. However, Brazil led the market in online travel startups with 82 in 2020 and Mexico came in second with 43 online travel startups.
The study also found that Despegar.com, an Argentine-founded company, has successfully established itself as the leading online travel agency in Latin America, where it controls up to 10 percent of the market share. The second-leading agency, CVC.com.br, controls about 6.7 percent market share.
Worth $22 billion in 2020, the travel market in Latin America is projected to go up to $83 billion by 2024 in the best case scenario. In the worst case scenario, the growth is expected to be at $56 billion.
You can find the study here.
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Photo credit: Online travel agencies are starting to recover in Latin America. Brazil's Rio de Janeiro is pictured. LhcCoutinho / Pixabay