Despegar.com, Corp. (NYSE:DESP) Q3 2018 Earnings Conference Call Transcript

Nov 08, 2018 • 08:00 am ET

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Despegar.com, Corp. (NYSE:DESP) Q3 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good morning, and welcome to the Despegar Third Quarter 2018 Earnings Call. A slide presentation is accompanying today's webcast and is available in the Investors section of the company's website, www.investor.despegar.com. There will be an opportunity for you to ask questions, at the end of today's presentation. This conference call is being recorded. As a reminder, all participants will be in a listen-only mode.

Now I would like to turn the call over to Mr. Javier Kelly, IR. Please go ahead.

Executive
Javier Kelly

Good morning, everyone, and thanks for joining us today for a discussion of our third quarter 2018 results. In addition to reporting financial results in accordance, with US generally accepted accounting principles, we'll discuss certain non-GAAP financial measures. Investors are encouraged to review the reconciliation of these non-GAAP financial results, which can be found in the press release.

I would now like to turn the call over to our CEO, Damian Scokin, who will provide an overview of the third quarter, and then update you on our strategic priorities. Alberto Lopez Gaffney, our new CFO, will afterwards discuss the quarter's financials, and after that we will open the call to your questions. Damian, please go ahead.

Executive
Damian Scokin

Thank you, Javier. Good morning, everyone, and thank you all for joining us. Before I discuss Despegar's third quarter performance, I would like to take a moment to introduce Alberto Lopez Gaffney, our new CFO, who joined on October 29. Alberto's solid experience in finance and capital market growth, will be key as we work to ensure we capture all our growth opportunities. Furthermore, he has a long established and proven track record of consistently delivering results. I would also like to thank Bettina Zubin for her significant contributions, as interim CFO. We are pleased to have Alberto join us.

Now to third quarter results. Overall, we performed well on a number of key operating metrics, in light of the challenging environment, particularly in Argentina and Brazil, which saw the travel industry across the whole region decline in the low double-digit range. Excluding Argentina and Brazil, transactions, which are impacted by weakened currency, as people travel less, expanded in the low 20% range, while gross bookings and revenues also delivered a robust performance.

As we have discussed in prior calls, we have been strategically focused on reinforcing our position in the marketplace, as the leading online travel agency. We have made significant investments in support of this goal, which has the desired impact of increasing our market share, and improving post-travel customer satisfaction scores. We were able to accomplish this, while many other competitors were suffering the impact of the economic turmoil.

Our long-term strategy focused on driving sales of higher-margin Packages, Hotels and Other Products remains intact. With transactions and as a percentage of total revenues in this higher-margin segment increasing close to 380 points in the quarter. Even in this increasingly difficult macro environment, we grew room nights by 12% year-on-year, and we believe there is more room for growth ahead of