Despegar Warns of Covid Effects
- Virus fears are reaching even Latin America, about as distant
as you can get from Wuhan. Despegar, a leading online travel retailer in the
region, expressed concern in its latest earnings call about two second-order
effects. One is what the outbreak is doing to Latin currencies, i.e. sending
them to new lows. The other is all the capacity cutting carriers are now doing.
Last quarter, before anyone ever heard of Covid-19, Latin America’s travel sector faced a litany of challenges, including social unrest in Chile and a new 30% tax on international travel from Argentina (never mind the deep recession there). Despegar did however see a bump in outbound travel from Argentina just before the tax took effect in December.