Despite recession, Brazil may see digital travel boom
It seems like a paradox. Brazil faces “its worst recession in 25 years“, reports Bloomberg News.
But Brazil will also see digital travel sales grow 14% this year, to $12 billion, according to a forecast from eMarketer, a New York consultancy.
Part of the discrepancy may be explained by Brazilians’s rapid adoption of digital platforms. They are shifting the spending that they used to do with bricks-and-mortar agencies to online agencies and metasearch websites.
So, even if total travel spending drops, share gained by digital travel companies could increase.
This outlook may also be affected by the 2016 Summer Olympics, which Brazil is hosting.
It’s also possible the forecast will need to be revised later.
In the meantime, how will local players fare in the economic turbulence?
Earlier this week, Hotel Urbano, a hotel booking website, obtained the financial help it will need. It received a $60 million stake from Priceline Group, having raised $135 million in total, with an estimated billion-dollar valuation.
Hotel Urbano had risen quickly in three years, appearing to drive heavy traffic from display ads, its Facebook page, and content marketing.
Earlier this spring, Decolar, a travel agency conglomerate headquartered in Brazil, also fortified its Portuguese-language Decolar.com and Spanish-language Despegar.com. Expedia Inc made a $270 million investment in the company.
Mundi, the largest home-grown Brazilian metasearch site, reorganized itself. It now says that it is profitable and growing.
For a while, Voopter, a metasearch startup in Brazil, claimed it had overtaken all of the metasearch players in Brazil, citing statistics from SimilarWeb, an analytics firm.
It feeds its verified Google Analytics data to SimilarWeb, unlike the other players, so the comparisons aren’t exact.
But in the past two months, SimilarWeb recalculated how its algorithm works, lowering traffic estimates for many travel content websites.
This algorithm change may have lowered how much it appears to have been plumping up Voopter’s traffic, without revising the older numbers — creating the wrong impression that the startup has had a steep drop in traffic.