Despegar.com, Expedia announce new Lodging Outsourcing Agreement

Despegar.com (DESP) announced the signing of a new Lodging Outsourcing Agreement with Expedia (EXPE). This agreement enhances both parties’ business relationship, fostering new long-term growth opportunities, while enabling Despegar to further optimize its lodging supply, the former said in a filing. The renewed partnership between Expedia Group and Despegar, unlocks several strategic advantages for both parties, the company added. “The Agreement enables Despegar to further optimize its lodging supply to pursue key growth initiatives, including its B2B, White Label, SaaS, and M&A strategies. Despegar is able to expand its own directly sourced non-Latin American hotel supply and establish new strategic partnerships. In addition, the Agreement benefits the Expedia Group providing Expedia a guaranteed percentage of Despegar’s global hotel bookings and exclusive rights to distribute certain lodging supply in Latin America. This enhanced collaboration will also benefit both parties by fostering new long-term growth opportunities while deepening the successful business partnership through Despegar’s leading technology platform and extensive Latin American customer base and supply, in combination with Expedia’s global supply.” Most of the terms of the agreement will take effect on January 1, 2025. The new agreement has a ten-year term. Under the original agreement, the previously recorded perpetual $125M contingent liability on Despegar’s balance sheet will now, under the new agreement, be amortized over 10 years, materially improving Despegar’s Net Asset position.