Despegar became Latin America largest online travel agency with 100 million users and a Nasdaq IPO — then COVID wiped out travel demand in 2020 and the stock fell 85 percent, leaving the company a zombie operating at a fraction of its former scale.
Evaluating only Despegar’s profile at its peak — without knowing the outcome — the model ranked Market collapse as the #1 likely cause. That’s exactly how it died.
Key Events Timeline
FOUNDING
Despegar founded
LAYOFF
Market downturn forces cuts
SHUTDOWN
Zombie Startup: Despegar ceases operations
Full Analysis
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Documented cause
Despegar built the leading Latin American OTA across 20 countries, going public on Nasdaq in September 2017 at $26 per share. COVID-19 destroyed air travel demand globally and eliminated the revenue base of every OTA. Despegar revenue fell 75 percent in 2020. Unlike US peers who had cash reserves or government access, Despegar had to navigate currency controls in Argentina and Brazil simultaneously. The stock fell from $26 to $3.50 and has never recovered to pre-COVID levels.
Lesson
“OTA businesses in emerging markets face a double COVID exposure: travel demand collapse plus currency devaluation in the same crisis — the hedge that works for US peers does not work when your home market has capital controls.”