Evaluating only Despegar (COVID crisis)’s profile at its peak — without knowing the outcome — the model ranked Competition as the #1 likely cause. Documented cause: Market timing.
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Documented cause
Despegar, Latin America's leading online travel agency, saw revenues collapse 70% in 2020 when COVID-19 eliminated air travel across the region. As a pure-play OTA with limited diversification, Despegar had no revenue substitute. The company laid off over 1,000 employees, raised emergency capital, and needed three years to recover to 2019 revenue levels.
Lesson
“Single-sector dependency in travel is an existential risk during pandemic events. The OTAs that diversified into accommodation, experiences, and corporate travel recovered faster. Pure-play flight search has no resilience when flights stop.”
FAQ
What happened to Despegar during COVID?
Despegar, Latin America's leading OTA, saw revenues collapse 70% in 2020 when COVID-19 eliminated air travel. The company laid off over 1,000 employees and needed three years to recover to pre-COVID revenue levels.