20-F

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2020

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-38209

Despegar.com, Corp.

(Exact Name of Registrant as Specified in its charter)

N/A

(Translation of Registrant’s name into English)

British Virgin Islands

(Jurisdiction of Incorporation or Organization)

Juana Manso 1069, Floor 5

Ciudad Autónoma de Buenos Aires, Argentina C1107CBU

Telephone: +54 11 4894-3500

(Address of principal executive offices)

Mariano Scagliarini, General Counsel

Juana Manso 1069, Floor 5

Ciudad Autónoma de Buenos Aires, Argentina C1107CBU

Telephone: +54 11 4894-3500

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Ordinary Shares, no par value	DESP	The New York Stock Exchange

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the Annual Report:

At December 31, 2020 70,099,328 ordinary shares

Indicate by check mark if the registrant is a well-known seasoned issuer , as defined in Rule 405 of the Securities Act.     Yes  ☐    No  ☒

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.    Yes  ☐    No  ☒

Note- Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Emerging growth company	☒

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act.  ☒

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.  ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP  ☒	International Financial Reporting Standards as issued		Other   ☐
	by the International Accounting Standards Board	☐

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.    Item 17  ☐    Item 18  ☐

If this is an Annual Report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

TABLE OF CONTENTS

		Page
PART I.	INTRODUCTION		1
ITEM 1	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS		4
ITEM 2	OFFER STATISTICS AND EXPECTED TIMETABLE		4
ITEM 3	KEY INFORMATION		4
ITEM 4	INFORMATION ON THE COMPANY		39
ITEM 4A.	UNRESOLVED STAFF COMMENTS		64
ITEM 5	OPERATING AND FINANCIAL REVIEW AND PROSPECTS		65
ITEM 6	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES		88
ITEM 7	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS		97
ITEM 8	FINANCIAL INFORMATION		103
ITEM 9	THE OFFER AND LISTING		104
ITEM 10	ADDITIONAL INFORMATION		105
ITEM 11	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		117
ITEM 12	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES		118
PART II.			119
ITEM 13	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES		119
ITEM 14	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS		119
ITEM 15	CONTROLS AND PROCEDURES		119
ITEM 16	[RESERVED]		121
ITEM 16A.	AUDIT COMMITTEE FINANCIAL EXPERT		121
ITEM 16B.	CODE OF ETHICS		121
ITEM 16C.	PRINCIPAL ACCOUNTANT FEES AND SERVICES		121
ITEM 16D.	EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES		122
ITEM 16E.	PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS		122
ITEM 16F.	CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT		122
ITEM 16G.	CORPORATE GOVERNANCE		122
ITEM 16H.	MINE SAFETY DISCLOSURE		123
PART III.			123
ITEM 17	FINANCIAL STATEMENTS		123
ITEM 18	FINANCIAL STATEMENTS		123
ITEM 19	EXHIBITS		123

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PART I.

INTRODUCTION

Unless the context suggests otherwise, references in this Annual Report to “Despegar,” the “Company,” “we” “us” and “our” are to Despegar.com, Corp., a business company incorporated in the British Virgin Islands (“BVI”), and its consolidated subsidiaries. Unless the context suggests otherwise, references to “Latin America” are to South America, Mexico, Central America and the Caribbean.

We were formed as a business company in BVI on February 10, 2017. On May 3, 2017, the stockholders of our predecessor, Decolar.com, Inc., a Delaware corporation, exchanged their shares of Decolar.com, Inc. for ordinary shares of Despegar.com, Corp. to create a BVI holding company. Following the exchange, our shareholders own shares of Despegar.com, Corp. and Decolar.com, Inc. is a wholly-owned subsidiary of Despegar.com, Corp.

Financial Statements

Our consolidated financial information contained in this Annual Report derives from our audited consolidated financial statements as of December 31, 2020 and 2019 and for the fiscal years ended December 31, 2020, 2019 and 2018 included in this Annual Report. Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and presented in U.S. dollars.

Adjusted Segment EBITDA

This Annual Report includes certain references to Adjusted Segment EBITDA for each of our segments (Air; and Packages, Hotels and Other Travel Products). We use Adjusted Segment EBITDA for purposes of making decisions about allocating resources to our segments and to internally evaluate their financial performance because we believe Adjusted Segment EBITDA reflects current core operating performance of each segment and provides an indicator of each segment’s ability to generate cash. For 2020, we have changed our definition of Adjusted Segment EBITDA reported internally to exclude restructuring charges and acquisition costs. We have effected this change retroactively to all years presented in this Annual Report. However, we did not have restructuring charges in either 2019 or 2018 and we did not consummate any acquisitions in 2018.

Adjusted Segment EBITDA is calculated, with respect to each segment, as our net loss for the year exclusive of financial income / (expense), income tax, depreciation, amortization, impairment charges, stock-based compensation expense, restructuring charges and acquisition costs. See note 20 to our audited consolidated financial statements for our Adjusted Segment EBITDA and segment information.

Non-GAAP Financial Information

Consolidated Adjusted EBITDA

This Annual Report includes certain references to Consolidated Adjusted EBITDA, a non-GAAP financial measure. For 2020, we have changed our definition of Consolidated Adjusted EBITDA to exclude restructuring charges and acquisition costs. We have effected this change retroactively to all years presented in this Annual Report. However, we did not have restructuring charges in either 2019 or 2018 and we did not consummate any acquisitions 2018.

We define Consolidated Adjusted EBITDA as net loss for the year exclusive of financial income / (expense), income tax, depreciation, amortization, impairment charges of long-lived assets, stock-based compensation expense, restructuring charges and acquisition costs. See “Item 5. Operating and Financial Review and Prospects—A. Operating Results — Key Business Metrics” for a reconciliation of Consolidated Adjusted EBITDA to net income / (loss). Consolidated Adjusted EBITDA is not prepared in accordance with U.S. GAAP. Accordingly, you are cautioned not to place undue reliance on this information and should note that Consolidated Adjusted EBITDA, as calculated by us, may differ materially from similarly titled measures reported by other companies, including our competitors.

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Market Data

This Annual Report includes industry, market and competitive position data that we have derived from independent consultant reports, publicly available information, industry publications, official government information and other third-party sources, as well as our internal data and estimates. Independent consultant reports, industry publications and other published sources generally indicate that the information contained therein was obtained from sources believed to be reliable. Although we believe that this information is reliable, the information has not been independently verified by us.

Certain Operating Measures

This Annual Report includes certain references to number of transactions and gross bookings, both operating measures. Number of transactions is the total number of travel customer orders completed on our platform during a given period. Gross bookings is the aggregate purchase price of all travel products booked by our travel customers through our platform during a given period. For more information, see “Item 5. Operating and Financial Review and Prospects—A. Operating Results — Key Business Metrics.”

Currency Presentation

In this Annual Report, references to “dollars” and “$” are to the currency of the United States, references to “Brazilian real,” “Brazilian reais” and “R$” are to the currency of Brazil, references to “Argentine pesos” and “AR$” are to the currency of Argentina and references to “Mexican peso” and “MX$” are to the currency of Mexico.

Rounding

Certain figures included in this Annual Report have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables may not be exact arithmetic aggregations or percentages of the figures that precede them.

Trademarks

Our key trademarks are “Despegar,” “Despegar.com,” “Decolar” and “Decolar.com.” The key trademarks of Viajes Beda S.A. de C.V. (“Viajes Beda”) and Transporturist S.A. de C.V. (“Transporturist” and, together with Viajes Beda, “Best Day”), which we acquired on October 1, 2020, are “Best Day”, “BD Experience” and “HotelDo.” Other trademarks or service marks appearing in this Annual Report are the property of their respective holders. Solely for the convenience of the reader, we refer to our brands in this Annual Report without the ® symbol, but these references are not intended to indicate in any way that we will not assert our rights to these brands to the fullest extent permitted by law.

Forward-Looking Statements and Risk Factor Summary

This Annual Report includes forward-looking statements, principally under the captions “Item 3. Key Information,” “Item 4. Information on the Company––Business Overview” and “Item 5. Operating and Financial Review and Prospects.” We have based these forward-looking statements largely on our current beliefs, expectations and projections about future events and financial trends affecting our business and our market. Many important factors, in addition to those discussed elsewhere in this Annual Report, could cause our actual results to differ substantially from those anticipated in our forward-looking statements.

We operate in a competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Annual Report. The words “believe,” “may,” “should,” “aim,” “estimate,” “continue,” “anticipate,” “intend,” “will,” “expect” and similar words are intended to identify forward-looking statements. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, capital expenditures, financing plans, competitive position, industry environment,

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potential growth opportunities, the effects of future regulation and the effects of competition. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly or to revise any forward-looking statements after we distribute this Annual Report because of new information, future events or other factors. These statements are intended to qualify for the safe harbors from liability provided by Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. In light of the risks and uncertainties described above, the future events and circumstances discussed in this Annual Report might not occur or come into existence and forward-looking statements are thus not guarantees of future performance. In particular, the COVID-19 pandemic, and governments’ extraordinary measures to limit the spread of the virus, are disrupting the global economy and the travel industry, and consequently adversely affecting our business, results of operation and cash flows and, as conditions are recent, uncertain and changing rapidly, it is difficult to predict the full extent of the impact that the pandemic will have. Considering these limitations, you should not make any investment decision in reliance on forward-looking statements contained in this Annual Report. In evaluating forward-looking statements, current and prospective shareholders should specifically consider various factors, including the risks listed below and those discussed under the caption “Item 3. Key Information—D. Risk Factors” in this Annual Report.

We are providing the following summary of the risk factors contained in this Annual Report to enhance the readability and accessibility of our risk factor disclosures. We encourage you to carefully review the full risk factors contained in this Annual Report in their entirety for additional information regarding the material factors that make an investment in our securities speculative or risky. Some of the factors, risks and uncertainties that might materially affect the forward-looking statements contained herein and may make an investment in our securities speculative or risky include, but are not limited to, the following:

• the ongoing COVID-19 pandemic is disrupting the global economy and the travel industry, and consequently adversely affecting our business, results of operations and cash flows, and it is difficult to predict the full extent of the impact that the pandemic will have on our Company;

• we are subject to the risks generally associated with doing business in Latin America and risks associated with our business concentration within this region;

• general declines or disruptions in the travel industry may adversely affect our business and results of operations;

• our business and results of operations may be adversely affected by macroeconomic conditions;

• we are exposed to fluctuations in currency exchange rates;

• if we are unable to maintain or increase consumer traffic to our sites and our conversion rates, our business and results of operations may be harmed;

• our business could be negatively affected by changes in search engine algorithms and dynamics or other traffic-generating arrangements;

• we operate in a highly competitive and evolving market, and pressure from existing and new companies, as well as consolidation within the industry, may adversely affect our business and results of operations;

• if we are unable to maintain existing, and establish new, arrangements with travel suppliers, our business may be adversely affected;

• we rely on the value of our brands, and any failure to maintain or enhance consumer awareness of our brands could adversely affect our business and results of operations;

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• we rely on information technology, including third-party technology, to operate our business and maintain our competitiveness, and any failure to adapt to technological developments or industry trends, including third-party technology, could adversely affect our business;

• we are subject to payments-related fraud risk;

• any system interruption, security breaches or lack of sufficient redundancy in our information systems may harm our business;

• our ability to attract, train and retain executives and other qualified employees, particularly highly-skilled IT professionals, is critical to our business and future growth;

• our business depends on the availability of credit cards and financing options for consumers;

• internet regulation in the countries where we operate is scarce, and several legal issues related to the internet are uncertain;

• acquisitions could present risks and disrupt our ongoing business;

• we may not be able to consummate acquisitions or other strategic opportunities in the future;

• we are a foreign private issuer under U.S. securities regulations and, as a result, we will not be subject to U.S. proxy rules and will be subject to Exchange Act reporting obligations that, to some extent, are more lenient and less frequent than those of a U.S. issuer; and

• the strategic interests of our significant shareholders may, from time to time, differ from and conflict with our interests and the interests of our other shareholders.

These cautionary statements should not be construed by you to be exhaustive and are made only as of the date hereof. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Additional Information

Our principal website addresses are www.despegar.com and www.decolar.com. The information on our websites should not be deemed to be part of this Annual Report. SEC also maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding registrants that make electronic filings with SEC using its EDGAR system.

ITEM 1 IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2 OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3 KEY INFORMATION

A. Removed and Reserved.

The selected financial data previously required by Item 3.A of Form 20-F has been omitted in reliance on SEC Release No. 33-10890, Management’s Discussion and Analysis, Selected Financial Data and Supplementary Financial Information.

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B. Capitalization and Indebtedness

Not applicable.

C. Reasons for the Offer and Use of Proceeds

Not applicable.

D. Risk Factors

You should carefully consider the risks described below, in addition to the other information contained in this Annual Report. We also may face additional risks and uncertainties that are not presently known to us, or that as of the date of this Annual Report we deem immaterial, which may impair our business, financial condition and results of operations. If any of these events occur, the trading price of our ordinary shares could decline. In general, you take more risk when you invest in the securities of issuers with operations in emerging markets such as Latin American countries than when you invest in the securities of issuers in the United States and other developed markets. The information in this Risk Factors section includes forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of numerous factors, including those described in “Forward-Looking Statements.”

Risks Related to Our Business

The ongoing COVID-19 pandemic has had, and is expected to continue to have, a material adverse impact on the global economy, travel industry, and consequently our business, results of operations, cash flows and liquidity.

The outbreak of COVID-19 rapidly spread across the globe in 2020 and is continuing to disrupt worldwide economic activity and –in particular– the travel industry. Countries around the world, including across Latin America, have adopted extraordinary measures to limit the spread of COVID-19, including imposing travel restrictions and bans, closing borders, establishing restrictions on public gatherings, instructing residents to practice social distancing, requiring closures of non-essential businesses, issuing stay at home advisories and orders, implementing quarantines and similar actions. The degree of containment of the virus, and the recovery in travel, has varied country by country. During the recovery period, there have been instances where cases of COVID-19 have started to increase again after a period of decline, which in some cases impacted the recovery of travel in certain countries. While many countries have begun the process of vaccinating their residents against COVID-19, the large scale and challenging logistics of distributing the vaccines, as well as uncertainty over the efficacy of the vaccine against new variants of the virus, may contribute to delays in economic recovery. COVID-19 has also had broader economic impacts, including an increase in unemployment levels and reduction in economic activity, which could lead to recession and further reduction in consumer or business spending on travel activities, which may negatively impact the timing and level of a recovery in travel demand.

Demand for travel began showing early signs of weakness by the beginning of March 2020. Within a matter of days, with more news of the potentially extensive spreading of the virus to other parts of the world, travel demand began to decline significantly, and then the decline accelerated precipitously as governments implemented strict measures to limit the spread of the virus. During the nine-month period ended December 31, 2020, our gross bookings declined by 83% as compared to the corresponding nine-month period of 2019. During the second quarter of 2020, our gross bookings declined by 94% compared to the first quarter of 2020. During the third quarter of 2020, our gross bookings increased by 238% compared to the second quarter of 2020 and during the fourth quarter of 2020, our gross bookings increased by 143% compared to the third quarter of 2020. In addition, we have incurred additional customer service costs in connection with servicing travelers affected by the outbreak, which also has a negative impact on our results of operations.

As an intermediary in the travel industry, a significant portion of our revenue is affected by the operations of our travel suppliers. The effects of the pandemic and governments’ measures have forced many travel suppliers to reduce operations and to seek government support in order to maintain their businesses. The suspension or termination of services by major travel suppliers, in particular airlines, negatively impacts the products we can offer to our travel customers.

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The pandemic has impeded global economic activity for an extended period and could continue to do so, even as restrictions are lifted, leading to a continuation of the already significant decrease in per capita income and disposable income, increased and sustained unemployment or a decline in consumer confidence, all of which could significantly reduce discretionary spending by individuals and businesses on travel. In turn, that could have a negative impact on demand for our services and could lead our partners, or us, to reduce prices or offer incentives to attract travelers. We also cannot predict the long-term effects of the COVID-19 pandemic on our partners and their business and operations or the ways that the pandemic may fundamentally alter the travel industry. In particular, we may need to adjust to a travel industry with fewer and different suppliers as well as structural changes to certain types of travel.

While we have undertaken certain actions to attempt to mitigate the effects of COVID-19 on our business, our cost-savings activities may lead to disruptions in our business, inability to enhance or preserve our brand awareness, reduced employee morale and productivity, increased attrition, and problems retaining existing and recruiting future employees, all of which could have a material adverse impact on our business, financial condition, results of operations and cash flows.

For the reasons set forth above and other reasons that may come to light as the COVID-19 pandemic and containment measures evolve over time, it is difficult to estimate with accuracy the impact to our future revenues, results of operations, cash flows, liquidity or financial condition, but such impacts have been and will continue to be significant and could continue to have a material adverse effect on our business, financial condition, results of operations, cash flows and liquidity position for the foreseeable future.

We are subject to the risks generally associated with doing business in Latin America.

Our business serves the Latin American travel industry and substantially all of our revenue is derived from Latin American countries. Substantially all of our operations are located in Latin America. Moreover, we have a significant number of transactions from Brazil, Mexico and Argentina as well as other Latin American countries. In 2020 and 2019, Brazil accounted for 47% and 39% of our transactions and Argentina accounted for 11% and 22% of our transactions. In addition, on October 1, 2020 we completed our acquisition of Best Day, increasing significantly our exposure to Mexico. In 2020 and in 2019, Mexico accounted for 20% and 14% of our transactions.

As a result, we are subject to the risks generally associated with doing business in the region, including:

• political, social and macroeconomic instability;

• cycles of severe economic downturns;

• currency devaluations and fluctuations;

• periods of high inflation;

• availability, quality and level of usage of the internet and e-commerce;

• high levels of credit risk and fraud;

• uncertainty or changes in governmental regulation, including applicable to travel services operations and internet and e-commerce services;

• uncertainty or changes in tax laws and regulations;

• limited access to financing, both for companies and for consumers;

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• exchange and capital controls;

• limited infrastructure, including in the travel and technology sectors;

• adverse labor conditions and difficulties in hiring, training and retaining qualified personnel;

• the challenges of doing business across a region with multiple languages, different currencies and regulatory regimes that varies from country to country; and

• the impact of adverse global conditions in the region.

Any of these risks could have a material adverse effect on our business, financial condition and results of operations. For more information, see “—Risks Related to Latin America.”

General declines or disruptions in the travel industry may adversely affect our business and results of operations.

Our business is significantly affected by the trends that occur in the travel industry. As the travel industry is highly sensitive to business and personal discretionary spending levels, it tends to decline during general economic downturns. Trends or events that tend to reduce travel and are likely to reduce our revenue include:

• health-related risks, such as the ongoing COVID-19 pandemic, or future outbreaks of Zika virus, H1N1 influenza, Ebola virus, yellow fever, avian flu, or any other serious contagious diseases;

• terrorist attacks or threats of terrorist attacks or wars;

• fluctuations in currency exchange rates;

• increased prices in the airline ticketing, hotel, or other travel-related sectors;

• significant changes in oil prices;

• travel-related strikes or labor unrest, bankruptcies or liquidations;

• travel-related accidents or the grounding of aircraft due to safety or other concerns;

• political unrest;

• high levels of crime;

• natural disasters or severe weather conditions, including volcanic eruptions, hurricanes, flooding or earthquakes;

• changes in immigration policy; and

• travel restrictions or other security procedures implemented in connection with any major events, particularly those that affect travel by Latin Americans within their respective countries, across the region and outbound from the region to the rest of the world.

We could be severely and adversely affected by declines or disruptions in the travel industry and, in many cases, have little or no control over the occurrence of such events. Such events could result in a decrease in demand for our travel services. Any decrease in demand, depending on the scope and duration, could significantly and adversely affect our business and financial performance over the short and long term.

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Our business and results of operations are adversely affected by macroeconomic conditions.

Consumer purchases of discretionary items generally decline during periods of recession and other periods in which disposable income is adversely affected. As a substantial portion of travel expenditure, for both business and leisure, is discretionary, the travel industry tends to experience weak or reduced demand during economic downturns.

General adverse economic conditions, including the possibility of recessionary conditions in Latin America or a worldwide economic slowdown, would adversely impact our business, financial condition and results of operations. Past weakness and uncertainty in the global economy and in Latin America have negatively impacted consumer spending patterns and demand for travel services and may continue to do so in the future.

As an intermediary in the travel industry, a significant portion of our revenue is affected by prices charged by our travel suppliers. During periods of poor economic conditions, airlines and hotels tend to reduce rates or offer discounted sales to stimulate demand, thereby reducing our commission-based income. A slowdown in economic conditions may also result in a decrease in transaction volumes and adversely affect our revenue, including our consumer fee-based income. It is difficult to predict the effects of the uncertainty in global economic conditions. If economic conditions decline globally or in Latin America, our business, financial condition and results of operations could be adversely impacted.

Moreover, the ongoing COVID-19 pandemic has significantly increased economic uncertainty and resulted in a global recession, which may continue to adversely affect consumer spending and travel demand even after the health concerns of the virus have subsided.

We are exposed to fluctuations in currency exchange rates.

Because we conduct our business outside the United States and receive almost all of our revenue in currencies other than the dollar, but report our results in dollars, we face exposure to adverse movements in currency exchange rates. The currencies of certain countries where we operate, including Brazil and Argentina, have historically experienced significant devaluations. The Brazilian real depreciated 17%, 4% and 29% during 2018, 2019 and 2020, respectively; the Argentine peso depreciated 51%, 59% and 40.5% during 2018, 2019 and 2020, respectively and the Mexican peso depreciated 0.25% during 2018, appreciated 4.17% during 2019 and depreciated 5.5% during 2020. The results of operations in the countries where we operate are exposed to foreign exchange rate fluctuations as the financial results of the applicable subsidiaries are translated from the local currency into dollars upon consolidation. If the dollar weakens against foreign currencies, the translation of these foreign-currency-denominated transactions will typically result in increased revenue and operating expenses, and our revenue and operating expenses will typically decrease if the dollar strengthens. Moreover, if the dollar strengthens against the foreign currencies of countries in which we operate, the purchasing power of our travel customers from those countries could be negatively affected by potentially increased prices in local currencies, and we could experience a reduction in the demand for our travel services.

Additionally, foreign exchange exposure also arises from pre-pay transactions, where we accept upfront payments for bookings in the travel customer’s home currency, but payment to the hotel is not due until after the travel customer checks out, and is paid by us in the hotel’s home currency. We are therefore exposed to foreign exchange risk between the time of the initial reservation and the time when the hotel is paid.

We minimize our foreign currency exposures by managing natural hedges, netting our current assets and current liabilities in the same foreign currencies, and managing short term loans and investments for hedging purposes. Additionally, from time to time we enter into derivative transactions. However, depending on the size of the exposures and the relative movements of exchange rates, if we choose not to hedge or fail to hedge effectively our exposure, we could experience a material adverse effect on our financial condition and results of operations.

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We incurred net losses, operating losses and negative operating cash flows in 2020 and may experience earnings declines or net losses in the future.

In 2020, we incurred a net loss of $142.6 million, operating losses of $177.2 million and negative operating cash flows of $118.3 million. We cannot assure you that we can sustain profitability or avoid net losses in the future. Our ability to remain profitable depends on various factors, including our ability to generate additional transaction volume and revenue and control our costs and expenses. We may incur significant losses in the future for a number of reasons, including the other risks described in this Annual Report, and we may further encounter unforeseen expenses, difficulties, complications, delays and other unknown events. If our costs and expenses increase at a more rapid rate than our revenue, we may not be able to sustain profitability and may incur losses.

If we are unable to maintain or increase consumer traffic to our sites and our conversion rates, our business and results of operations would be harmed.

Our ability to generate revenue depends, in part, on our ability to attract consumers to our platform. If we fail to maintain or increase consumer traffic and our conversion rates, our ability to grow our revenue could be negatively affected. We expect that our efforts to maintain or increase traffic are likely to include, among other things, significant increases to our marketing expenditures. We cannot assure you that any increases in our expenses will be successful in generating additional consumer traffic.

There are many factors that could negatively affect user retention, growth, and engagement, including if:

• we fail to offer compelling products;

• users increasingly engage with competing products instead of ours;

• we fail to introduce new and exciting products and services or those we introduce are poorly received;

• our websites or mobile apps fail to operate effectively on the iOS and Android mobile operating systems;

• we do not provide a compelling user experience;

• we are unable to combat spam or other hostile or inappropriate usage on our products, or if our anti-fraud measures are too conservative and we reject too many bona fide transactions;

• there are changes in user sentiment about the quality or usefulness of our existing products;

• there are concerns about the privacy implications, safety, or security of our products;

• our suppliers decide to discontinue the offering of their products through our platform;

• technical or other problems frustrate the user experience, particularly if those problems prevent us from delivering our products in a fast and reliable manner;

• we fail to provide adequate service to our travel customers and travel suppliers;

• we or other companies in our industry are the subject of adverse media reports or other negative publicity; or

• we do not maintain our brand image or our reputation is damaged.

Any decrease to user retention, growth, or engagement could render our products less attractive to consumers and would seriously harm our business.

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We operate in a highly competitive and evolving market, and pressure from existing and new companies may adversely affect our business and results of operations.

The travel market in Latin America and worldwide is intensely competitive and rapidly evolving. Factors affecting our competitive success include, among other things, price, availability and breadth of choice of travel services and products, brand recognition, customer service, fees charged to travelers, ease of use, accessibility, consumer payment options and reliability. We currently compete with both established and emerging providers of travel services and products, including regional offline travel agency chains and tour operators, global OTAs with presence in Latin America and smaller, country-specific online and offline travel agencies and tour operators. In addition, our travel customers have the option to book travel directly with airlines, hotels and other travel service providers who are increasingly focused on further refining their online offerings. Large, established internet search engines have also launched applications offering travel itineraries in destinations around the world, and meta-search companies who can aggregate travel search results also compete against us for travel customers. We also face competition from Airbnb and other providers acting in the alternative accommodations space. In addition, we face price competition from new entrants that offer discounted rates and other incentives from time to time, as well as social media channels that market travel products and experiences. Some of our competitors have significantly greater financial and other resources than us. From time to time we may be required to reduce service fees and revenue margins in order to compete effectively and maintain or gain travel customers, brand awareness and supplier relationships.

Further, we may also face increased competition from new entrants in our industry. We cannot assure you that we will be able to successfully compete against existing or new competitors. If we are not able to compete effectively, our business, financial condition and results of operations may be adversely affected.

Some travel suppliers are seeking to decrease their reliance on distribution intermediaries like us by promoting direct distribution channels. Many airlines, hotels, car rental companies and tour operators have call centers and have established their own travel distribution websites and mobile applications. From time to time, travel suppliers offer advantages, such as bonus loyalty awards and lower transaction fees or discounted prices, when their services and products are purchased from supplier-related channels. We also compete with competitors which may offer less content, functionality and marketing reach but at a relatively lower cost to suppliers. If our access to supplier-provided content or features were to be diminished either relative to our competitors or in absolute terms or if we are unable to compete effectively with travel supplier-related channels or other competitors, our business could be materially and adversely affected.

If we are unable to maintain existing, and establish new, arrangements with travel suppliers, our business may be adversely affected.

Our business is dependent on our ability to maintain our relationships and arrangements with existing suppliers, such as airlines, global distribution system (GDS), service providers, hotels, hotel consolidators and destination services companies, car rental companies, bus operators, cruise companies and travel assistance providers, as well as our ability to establish and maintain relationships with new travel suppliers. In addition, the hotel and other lodging products that we offer through our platform for all countries outside Latin America are provided to us substantially all by affiliates of Expedia, and Expedia is the preferred provider to us of hotel and other lodging products in Latin America, pursuant to a lodging outsourcing agreement (the “Expedia Outsourcing Agreement”). In the event the Expedia Outsourcing Agreement is terminated, we may be required to pay a $125.0 million termination fee. For more information on our relationships with Expedia, see “Item 7. Major Shareholders and Related Party Transactions — B. Related Party — Relationship with Expedia.” Adverse changes in key arrangements with our suppliers, including an inability of any key travel supplier to fulfill its payment obligation to us in a timely manner, increasing industry consolidation or our inability to enter into or renew arrangements with these parties on favorable terms, if at all, could reduce the amount, quality, pricing and breadth of the travel services and products that we are able to offer, which could adversely affect our business, financial condition and results of operations.

In addition, adverse economic developments affecting the travel industry could also adversely impact our ability to maintain our existing relationships and arrangements with one or more of our suppliers. We cannot assure you that our agreements or arrangements with our travel suppliers or travel-related service providers will continue or that our travel suppliers or travel-related service providers will not further reduce commissions, terminate our contracts,

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make their products or services unavailable to us as part of exclusive arrangements with our competitors or default on or dispute their payment or other obligations towards us, any of which could reduce our revenue and margins or may require us to initiate legal or arbitral proceedings to enforce their contractual payment obligations, which may adversely affect our business, financial condition and results of operations.

We rely on the value of our brands, and any failure to maintain or enhance consumer awareness of our brands could adversely affect our business and results of operations.

We believe continued investment in our brand is critical to retain and expand our business. The travel customers’ awareness of our brand, which we foster via our online and offline marketing throughout our target markets in Latin America, has become one of the most important drivers of growth in our travel customer base, and we believe that our brands are well recognized in the Latin American travel market. We have invested in developing and promoting our brand since our inception and expect to continue to spend on maintaining the value of our brands to enable us to compete against increased spending by competitors and to allow us to expand into new services or increase our penetration in certain markets where our brands are less well known.

We cannot assure you that we will be able to successfully maintain or enhance consumer awareness of our brands. Even if we are successful in our branding efforts, such efforts may not be cost-effective. Our marketing costs may also increase as a result of inflation in media pricing. If we are unable to maintain or enhance consumer awareness of our brands and generate demand in a cost-effective manner, it would negatively impact our ability to compete in the travel industry and would have a material adverse effect on our business, financial condition and results of operations.

We rely on information technology to operate our business and maintain our competitiveness, and any failure to adapt to technological developments or industry trends could adversely affect our business.

We depend on the use of sophisticated information technology and systems, for search and reservation for airline tickets, hotels, and any of the other products that we offer on our platform, as well as payments, refunds, customer relationship management, communications and administration. As our operations grow in both size and scope, we must continuously improve and upgrade our systems and infrastructure to improve services, features and functionality, while maintaining the reliability and integrity of our systems and infrastructure in a cost-effective manner. Our future success also depends on our ability to upgrade our services and infrastructure ahead of rapidly evolving consumer demands while continuing to improve the performance, features and reliability of our service in response to competitive offerings.

We may not be able to maintain or replace our existing systems or introduce new technologies and systems as quickly as our competitors, in a cost-effective manner or at all. We may also be unable to devote adequate financial resources to develop or acquire new technologies and systems in the future.

We may not be able to use new technologies effectively, or we may fail to adapt our websites, mobile apps, transaction processing systems and network infrastructure to meet consumer requirements or emerging industry standards, comply with government regulation or prevent fraud or security breaches. If we face material delays in introducing new or enhanced solutions, our travel customers may forego the use of our services in favor of those of our competitors. Any of these events could have a material adverse effect on our business, financial condition and results of operations.

Some of our airline suppliers (including our GDS service providers) may reduce or eliminate the commission and other compensation they pay to us for the sale of airline tickets and this could adversely affect our business and results of operations.

In our air business, we generate revenue through commissions and incentive payments from airline suppliers (including our GDS service providers) and service fees charged to our travel customers. Our airline suppliers (including our GDS service providers) may reduce or eliminate the commissions, incentive payments or other compensation they pay to us. To the extent any of our airline suppliers (including our GDS service providers) reduce or eliminate the commissions, incentive payments or other compensation they pay to us, our revenue may be

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reduced unless we are able to adequately mitigate such reduction by increasing the service fee we charge to our travel customers or increasing our transaction volume in a sustainable manner. However, any increase in service fees may also result in a loss of potential travel customers. In addition, our arrangement with the airlines that supply airline tickets to us may limit the amount of service fee that we are able to charge our travel customers. Our business would also be negatively impacted if competition or regulation in the Latin American travel industry causes us to have to reduce or eliminate our service fees.

Our business and results of operations could be adversely affected when one or more of our major travel suppliers suffers a deterioration in its financial condition or restructures its operations.

As we are an intermediary in the travel industry, a substantial portion of our revenue is affected by the prices charged by our suppliers, including airlines, GDS service providers, hotels, destination service providers, car rental suppliers, tour operators, supply aggregators (such as other OTAs), cruise operators, bus service providers and travel assistance providers, and the volume of products offered by our suppliers. As a result, if one or more of our major suppliers suffers a deterioration in its financial condition or restructures its operations, it could adversely affect our business, financial condition and results of operations. Accordingly, our business may be negatively affected by adverse changes in the markets in which our suppliers operate.

In particular, as a substantial portion of our revenue depends on our sales of airline flights, we could be adversely affected by changes in the airline industry, including consolidation or bankruptcies and liquidations, and in many cases, we will have no control over such changes. Any consolidation in the airline industry in the future would result in fewer airlines with potentially more bargaining power with respect to the commissions and incentive payments or other fees they pay to intermediaries. Events or weaknesses specific to the airline industry that could negatively affect our business include air fare fluctuations, airport, airspace and landing fee increases, seat capacity constraints, removal of destinations or flight routes, travel-related strikes or labor unrest, imposition of taxes or surcharges by regulatory authorities and fuel price volatility.

In the past, major airlines have filed for bankruptcy, exited bankruptcy, or discussed publicly the risk of bankruptcy. In addition, some of these and other airlines have merged, or discussed merging, with other airlines. If one of our major airline suppliers merges or consolidates with, or is acquired by, another company that either does not participate in the GDS systems we use, or that participates in such systems but at substantially lower levels, the surviving company may elect not to make supply available to us or may elect to do so at lower levels than the previous supplier. Similarly, in the event that one of our major airline suppliers voluntarily or involuntarily declares bankruptcy and is subsequently unable to successfully emerge from bankruptcy, and we are unable to replace such supplier, our business would be adversely affected. In addition, in certain of the countries in which we operate, we may be liable to claims from customers for suspension or termination of services in the event an airline files for bankruptcy. Further consolidation of one or more of the major airlines could result in further capacity reductions, a reduction in the number of airline tickets available for booking on our website and increased air fares, which may have a negative impact on demand for travel products.

The COVID-19 pandemic and the extraordinary measures adopted by the governments have disrupted the global economy and the travel industry in particular, and the business, results of operations and financial condition of many of our suppliers have been adversely affected, and may be further affected, as the disruption to the economy and the industry continues. We cannot predict whether any of our suppliers will continue to significantly reduce or terminate their operations and product offerings. The effects of the pandemic and governments’ measures have forced many travel suppliers to reduce operations and to seek government support in order to maintain their businesses. The suspension or termination of services by major travel suppliers, in particular airlines, has adversely affected and may continue to affect the products we can offer to our travel customers. It has also adversely affected, and may continue to adversely affect, our Company’s ability to benefit from advance payments that we have made to these suppliers and could result in complaints or claims against us by travel customers seeking refunds for suspended or terminated bookings. While we believe such claims would be without merit in most of the countries in which we operate, we cannot assure that we will prevail in any such complaints or claims. Furthermore, in certain of the countries in which we operate, we could potentially be liable for suspended or terminated bookings in the event of bankruptcy by the airline or other travel service provider.

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Governments are approving large stimulus packages to mitigate the effects of the sudden decline in economic activity caused by the pandemic; however, we cannot predict the extent to which these measures will be sufficient to restore or sustain the business and financial condition of companies in the travel industry. Moreover, Latin America-based airlines may have more limited access to government stimulus packages to the extent Latin American governments have less resources to support local economies.

We are subject to payments-related fraud risks.

We are held liable for accepting fraudulent bookings on our platform and other bookings for which payment is successfully disputed by the cardholder, both of which lead to the reversal of payments received by us for such bookings (referred to as a “chargeback”). Our results of operations may be negatively affected by our acceptance of fraudulent bookings made using credit cards. Our ability to detect and combat fraud, which has become increasingly common and sophisticated, may be negatively impacted by the adoption of new payment methods, the emergence and innovation of new technology platforms, including smartphones, tablets and other mobile devices, and our expansion, including into geographies with a history of elevated fraudulent activity. If we are unable to effectively combat fraud on our platform or if we otherwise experience increased levels of chargebacks, our results of operations could be materially adversely affected.

We have agreements with companies that process travel customers’ credit and debit card transactions for the facilitation of travel customer bookings of travel services from our travel suppliers. These agreements allow these processing companies, under certain conditions, to hold an amount of our cash (referred to as a “holdback”) or require us to otherwise post security equal to a portion of bookings that have been processed by such companies. These processing companies may be entitled to a holdback or suspension of processing services upon the occurrence of specified events, including material adverse changes in our financial condition. Moreover, there can be no assurances that the rates we pay for the processing of travel customer’s credit and debit card transactions will not increase, which could reduce our revenue thereby adversely affecting our business and financial performance.

Moreover, credit card networks, such as Visa and MasterCard, have adopted rules and regulations that apply to all merchants which process and accept credit cards and include the Payment Card Industry Data Security Standards (“PCI DSS”). Under these rules, we are required to adopt and implement internal controls over the use, storage and security of card data. We are currently PCI DSS certified and in compliance with PCI DSS. We assess our compliance with PCI DSS rules on a periodic basis and make necessary improvements to our internal controls as needed. Failure to comply may prevent us from processing or accepting credit cards.

In addition, when onboarding suppliers to our platform, we may fail to identify falsified or stolen supplier credentials, which may result in fraudulent bookings or unauthorized access to personal or confidential information of users of our websites and mobile applications. A fraudulent supplier scheme could also result in negative publicity and damage to our reputation and could cause users of our websites and mobile applications to lose confidence in the quality of our services. Any of these events would have a negative effect on the value of our brands, which could have an adverse impact on our financial performance.

Any system interruption, security breaches or lack of sufficient redundancy in our information systems may harm our businesses.

We rely on information technology systems, including the internet and third-party hosted services, to support a variety of business processes including booking transactions, and activities and to store sensitive data, including our proprietary business information and that of our suppliers, personally identifiable information and other information of our travel customers and employees and data with respect to invoicing and the collection of payments, accounting and procurement activities. In addition, we rely on our information technology systems to process financial information and results of operations for internal reporting purposes and to comply with financial reporting, legal, and tax requirements. The risk of a cybersecurity-related attack, intrusion, or disruption, including by criminal organizations, hacktivists, foreign governments, and terrorists, is persistent. We have experienced and may in the future experience system interruptions that make some or all of these systems unavailable or prevent us from efficiently fulfilling orders or providing services to third parties. Interruptions of this nature could include security intrusions and attacks on our systems for fraud or service interruption. Significant interruptions, outages or delays in our internal systems, or systems of third parties that we rely upon—including multiple co-location providers for data

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centers, cloud computing providers for application hosting, and network access providers—and network access, or deterioration in the performance of such systems, would impair our ability to process transactions, decrease our quality of service that we can offer to our travel customers, damage our reputation and brands, increase our costs and/or cause losses.

Potential security breaches to our systems or the systems of our service providers, whether resulting from internal or external sources, could significantly harm our business. We devote significant resources to network security, monitoring and testing, employee training, and other security measures, but we cannot assure you that these measures will prevent all possible security breaches or attacks. A party, whether internal or external, that is able to circumvent our security systems could misappropriate travel customers’ or employees’ information, proprietary information or other business and financial data or cause significant interruptions in our operations. We may need to expend significant resources to protect against security breaches or to address problems caused by breaches, and reductions in website availability could cause a loss of substantial business volume during the occurrence of any such incident. Because the techniques used to sabotage security change frequently, often are not recognized until launched against a target and may originate from less regulated and remote areas around the world, we may be unable to proactively address these techniques or to implement adequate preventive measures. We have obtained cyber insurance, however we cannot assure you that our insurance will be sufficient to protect against our losses or will cover all potential incidents. Moreover, security breaches could result in negative publicity and damage to our reputation, exposure to risk of loss or litigation and possible liability due to regulatory penalties and sanctions or pursuant to our contractual arrangements with payment card processors for associated expenses and penalties. Security breaches could also cause travel customers and potential users and our suppliers to lose confidence in our security, which would have a negative effect on the value of our brands. Failure to adequately protect against attacks or intrusions, whether for our own systems or those of our suppliers, could expose us to security breaches that could have an adverse impact on our financial performance.

In addition, we cannot assure you that our backup systems or contingency plans will sustain critical aspects of our operations or business processes in all circumstances, many other systems are not fully redundant and our disaster recovery or business continuity planning may not be sufficient. Fire, flood, power loss, telecommunications failure, break-ins, earthquakes, acts of war or terrorism, acts of God, computer viruses, electronic intrusion attempts from both external and internal sources and similar events or disruptions may damage or impact or interrupt computer or communications systems or business processes at any time. Although we have put measures in place to protect certain portions of our facilities and assets, any of these events could cause system interruption, delays and loss of critical data, and could prevent us from providing services to our travel customers and/or third parties for a significant period of time. Remediation may be costly and we may not have adequate insurance to cover such costs. Moreover, the costs of enhancing infrastructure to attain improved stability and redundancy may be time consuming and expensive and may require resources and expertise that are difficult to obtain.

Our ability to attract, train and retain executives and other qualified employees, particularly highly-skilled IT professionals, is critical to our business and future growth.

Our business and future success is substantially dependent on the continued services and performance of our key executives, senior management and skilled personnel, particularly personnel with experience in our industry and our information technology and systems. Any of these individuals may choose to terminate their employment with us at any time and we cannot assure you that we will be able to retain these employees or find adequate replacements, if at all. The specialized skills we require can be difficult, time-consuming and expensive to acquire and/or develop and, as a result, these skills are often in short supply. A lengthy period of time may be required to hire and train replacement personnel when skilled personnel depart our company. Our ability to compete effectively depends on our ability to attract new employees and to retain and motivate our existing employees. We may be required to increase our levels of employee compensation more rapidly than in the past to remain competitive in attracting the quality of employees that our business requires. Competition for these personnel is intense, and we cannot assure you that we will be able to successfully attract, integrate, train, retain, motivate and manage sufficiently qualified personnel. If we do not succeed in attracting well-qualified employees or retaining or motivating existing employees, our business and prospects for growth could be adversely affected.

In addition, we compete for talented individuals not only with other companies in our industry but also with companies in other industries, such as software services, engineering services and financial services companies,

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among others, and there is a limited pool of individuals who have the skills and training needed to help us grow our company. High attrition rates of qualified personnel could have an adverse effect on our ability to expand our business, as well as cause us to incur greater personnel expenses and training costs.

Moreover, while we sometimes require our senior management to sign non-compete agreements, typically for a period of one year following termination, we cannot assure you that our former employees will not compete with us in the future. In addition, these non-compete agreements may be difficult to enforce in certain Latin-American jurisdictions.

We rely on third-party systems and service providers and any disruption or adverse change in their businesses could have a material adverse effect on our business.

We currently rely on a variety of third-party systems, service providers and software companies, including the GDS and other electronic central reservation systems used by airlines, various channel managing systems and reservation systems used by other suppliers, as well as other technologies used by payment gateway providers. In particular, we rely on third parties for:

• the hosting of our websites;

• certain software underlying our technology platform;

• transportation ticketing agencies to issue transportation tickets and travel assistance products, confirmations and deliveries;

• third-party local tour operators to deliver on-site services to our packaged-tour customers;

• assistance in conducting searches for airfares and process air ticket bookings;

• processing hotel reservations for hotels not connected to our management system;

• processing credit card, debit card and banking payments;

• providing computer infrastructure critical to our business; and

• providing customer relationship management (CRM) services.

Any interruption or deterioration in performance of these third-party systems and services could have a material adverse effect on our business. Further, the information provided to us by certain of these third-party systems may not always be accurate due to either technical glitches or human error, and we may incur monetary and/or reputational loss as a result.

Our success is also dependent on our ability to maintain our relationships with these third-party systems and service providers. In the event our arrangements with any of these third parties are impaired or terminated, we may not be able to find an adequate alternative source of systems support on a timely basis or on commercially reasonable terms, which could result in significant additional costs or disruptions to our business. Any security breach at one of these companies could also affect our travel customers and harm our business.

We rely on banks or payment processors to collect payments from travel customers and facilitate payments to suppliers, and changes to credit card association fees, rules or practices may adversely affect our business.

We rely on banks or payment processors to process collections and payments, and we pay a fee for this service. In the countries where we operate, the number of processors is limited so there is little or no competition among processors. From time to time, credit card associations may increase the interchange fees that they charge for each transaction using one of their cards.

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For certain payment methods, including credit cards, we pay transaction and other fees, which may increase over time and raise our operating costs, lowering profitability. We rely on third parties to provide payment processing services and it could disrupt our business if these companies become unwilling or unable to provide these services to us. If we fail to comply with these third-party servicers’ rules or requirements, or if our data security systems are breached or compromised, we may be liable for chargebacks, credit card issuing banks’ costs, fines and higher transaction fees and we may lose our ability to accept credit card payments from our travel customers, process electronic funds transfers, or facilitate other types of online payments. If any of these situations were to occur, our business and results of operations could be adversely affected.

Our business depends on the availability of credit cards and financing options for consumers.

Our business is highly dependent on the availability of credit cards and financing options for consumers. In 2020, 2019 and 2018, substantially all our net sales were derived from payments effected through credit cards. Moreover, approximately 56%, 57%, 57% of transactions in 2020, 2019 and 2018 were paid by installments through bank financing options, respectively. As a result, the continued growth of our business is also partially dependent on the expansion of credit card penetration in Latin America, which may never reach a percentage similar to more developed countries for reasons that are beyond our control, such as low credit availability for a significant portion of the population in such countries. The provision of credit cards and other consumer financing depends on the product offerings at local and regional banks operating in the countries we serve. In the past, banking systems in Latin America have suffered disruptions and significantly limited availability and increased cost of consumer credit. Banks may also change their product offerings that they provide to consumers or may change the availability or costs of such products, due to credit, regulations or other reasons beyond our control.

We rely on various banks to provide financing to our travel customers who elect to use an installment plan payment option. Under our agreements with local and regional banks, we offer consumers the possibility of financing their purchases under installment plans established, offered and administered by the credit card holders’ issuing banks. Under these agreements, the banks provide the financing arrangements to the consumers and they assume the risk of any potential payment default or delinquency by consumers. Some of our competitors also offer installment plans and may offer installment plans with more attractive terms. If we are not able to offer a competitive selection of installment plan financing at competitive rates, our business and results of operations could be adversely affected. Moreover, our agreements with local banks allow us to offer installment payment plans without assuming collection risk from the travel customer and receive payment in full (provided we choose not to factor such installment payments). We cannot assure you that local banks will not change their credit practices in the future. If our arrangements with local banks are impaired or terminated, our business and results of operations could be adversely affected.

Furthermore, as secure methods of payment for e-commerce transactions have not been widely adopted in certain emerging markets, consumers and other merchants may have relatively low confidence in the integrity of e-commerce transactions and remote payment mechanisms, which may have a material and adverse effect on our business prospects or limit our growth.

Our business could be negatively affected by changes in search engine algorithms and dynamics or other traffic-generating arrangements.

We utilize internet search engines such as Google, principally through the purchase of travel-related keywords, to generate a significant portion of the traffic to our websites. Search engines frequently update and change the algorithms that determine the placement and display of results of a user’s search. It is possible that any such update could negatively affect us or may negatively affect us relative to our competitors. We have developed search engine management tools that are designed to bid more efficiently on portfolios of travel-related keywords and we have a search engine management team dedicated to reviewing the return of investment of all biddings. We cannot assure you that these tools will be effective over the long term, as the search engine sector is dynamic and rapidly changing.

In addition, a significant amount of traffic is directed to our websites through participation in pay-per-click and display advertising campaigns on search engines, including Google, and travel metasearch engines, including TripAdvisor and Trivago. A search or metasearch engine could, for competitive or other purposes, adopt emerging

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technologies, such as voice, or alter its search algorithms or results, any of which could cause us to place lower in search query results, or exclude our website from the search query results. If a major search engine changes its algorithms or results in a manner that negatively affects the search engine ranking, paid or unpaid, of our websites, or if competitive dynamics impact the costs or effectiveness of search engine optimization, search engine marketing or other traffic-generating arrangements in a negative manner, this may have a material and adverse effect on our business and financial performance. In addition, certain metasearch engines have added or may add various forms of direct or assisted booking functionality to their sites. To the extent such functionality is promoted at the expense of traditional paid listings, this may reduce the amount of traffic to our websites or those of our affiliates.

Changes in internet browser functionality could result in a decrease in our overall revenue.

Some of our services and marketing activities rely on cookies, which are placed on individual browsers when users visit websites. We use these cookies to optimize our marketing campaigns, to better understand our users’ preferences and to detect and prevent fraudulent activity. Users can block or delete cookies through their browsers or “adblocking” software or apps. The most common internet browsers allow users to modify their browser settings to prevent cookies from being accepted by their browsers, or are set to block third-party cookies by default. Increased use of methods, software or apps that block cookies, or diminished interest of users resulting from our use of such marketing activities, may adversely affect our business, financial condition and results of operations.

Our business depends on the continued growth of e-commerce and the availability and reliability of the internet in Latin America.

The market for e-commerce is developing in Latin America. Our future revenue depends substantially on Latin American consumers’ widespread acceptance and use of the internet as a way to conduct commerce. The use of and interest in the internet (particularly as a way to conduct commerce) has grown rapidly since our inception and we cannot assure you that this acceptance, interest and use will continue in the regions we target. For us to grow our user base successfully, more consumers in our markets must accept and use new ways of conducting business and exchanging information.

The price of personal computers and/or mobile devices and internet access may limit our potential growth in countries with low levels of internet penetration and/or high levels of poverty. In addition, the infrastructure for the internet may not be able to support continued growth in the number of internet users, their frequency of use or their bandwidth requirements.

The internet could lose its viability in our target markets due to delays in telecommunications technological developments, or due to increased government regulation. If telecommunications services change or are not sufficiently available to support the internet, response times would be slower, which would adversely affect use of the internet and our service in particular. Moreover, lack of investment in mobile infrastructure in Latin America may limit the expansion of our mobile offerings, which is one of our key growth strategies.

Growth of e-commerce transactions in Latin America may be impeded by the lack of secure payment methods.

As secure methods of payment for e-commerce transactions have not been widely adopted in Latin America, both consumers and merchants may have a relatively low confidence level in the integrity of e-commerce transactions. Consumer confidence can be adversely affected by incidents of fraud and security breaches, including generally in the marketplace, which is beyond our control. Moreover, although we are PCI DSS certified, most of our suppliers with which we share information are not. The continued growth of e-commerce in the region will depend on consumers’ confidence in the safety of online payment methods.

Our future success depends on our ability to expand and adapt our operations in a cost-effective and timely manner.

We plan to continue to expand our operations by developing and promoting new and complementary services and increasing our penetration in our markets. Moreover, we seek to expand our travel customer base as income levels and access to internet and banking services, such as credit card issuances, increase in Latin America. We may not

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succeed at expanding our operations in a cost-effective or timely manner, and our expansion efforts may not have the same or greater overall market acceptance as our current services. Furthermore, any new service that we launch that is not favorably received by consumers could damage our reputation and diminish the value of our brands. To expand our operations, we will also need to spend significant amounts on development, operations and other resources, and this may place a strain on our management, financial and operational resources. Similarly, a lack of market acceptance of these services or our inability to generate satisfactory revenue from any expanded services to offset their cost could have a material adverse effect on our business, financial condition and results of operations.

We may not be successful in implementing our long-term growth strategies.

Our long term growth strategies involve expanding our service and product offerings, enhancing our service platforms and potentially pursuing acquisitions or other strategic opportunities.

Our success in implementing our growth strategies could be affected by:

• our ability to attract travel customers in a cost-effective manner, including in markets where we have lower brand awareness or operational history;

• our ability to improve the competitiveness of our product offerings including by expanding the number of suppliers and negotiating fares and rates with existing and potential suppliers;

• our ability to market and cross-sell our travel services and products to facilitate the expansion of our business;

• our ability to compete effectively with existing and new entrants to the Latin American travel industry;

• our ability to expand and promote our mobile platform and make it user-friendly;

• our ability to build required technology;

• our ability to expand our businesses through strategic acquisitions and successfully integrate such acquisitions;

• the general condition of the global economy (particularly in Latin America) and continued growth in demand for travel services, particularly online;

• the growth of the internet and mobile technology as a medium for commerce in Latin America; and

• changes in the regulatory environments where we operate.

Many of these factors are beyond our control and we cannot assure you that we will succeed in implementing our strategies. Even if we are successful in executing our growth strategies, our different businesses may not grow at the same rate or with a uniform effect on our revenue and profitability.

Acquisitions could present risks and disrupt our ongoing business.

We consider and evaluate acquisitions of, or significant investments in, complementary businesses as part of our business strategy. Acquisitions involve numerous risks, and any acquisition could have a material adverse effect on our business, results of operations and financial condition. In June and July 2019, we completed the acquisition of the Viajes Falabella travel companies in Chile, Argentina, Peru and Colombia (together, “Viajes Falabella”). On October 1, 2020, we completed the acquisition of Best Day, a leading travel agency in Mexico, with business in Argentina, Colombia, Chile, Brazil, Uruguay, the Dominican Republic and the United States. On August 20, 2020, we acquired an 84% equity stake in Koin Administradora de Cartões e Meios de Pagamentos S.A. (“Koin”), a Brazilian online payment platform. The former owners remained as non-controlling shareholders of a 16% equity interest in Koin.

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The consummation of the Best Day acquisition considerably increased our business and operations in Mexico. As a result, our business and results of operations may be more affected by economic, political and social conditions in Mexico, including the country’s economy, fluctuations in the value of the Mexican peso, exchange control policies, inflation, interest rates, regulation, taxation, social instability, weather conditions and natural disasters, drug-related and other serious crime, and other developments in or affecting Mexico over which we have no control. In the past, Mexico has experienced several periods of slow or negative economic growth, high inflation, high interest rates, currency devaluation and other economic and social problems. These problems may worsen or reemerge in the future and could adversely affect our business and results of operations.

We may seek to undertake additional strategic acquisitions in the future. We cannot assure you that we will be successful in identifying opportunities and consummating acquisitions on favorable terms or at all. Depending on the size and timing of an acquisition, we may be required to raise future financing to consummate the acquisition.

Moreover, even if we are able to consummate a transaction, acquisitions may involve significant risks and uncertainties, which risks may include: distraction of management and other employees from our day-to-day operations and the development of new business opportunities; difficulties in integrating the operations of the acquired business and technology with our existing business and technology; greater than expected costs, liabilities, expenses and working capital requirements; challenges retaining travel customers or suppliers of acquired businesses; regulatory restrictions that prevent us from achieving the expected benefits of the acquisition; we may not derive the benefits such as operational or administrative synergies we expect from acquisitions, which may result in us committing capital resources and not receiving the expected returns; difficulties in modifying accounting standards rapidly; challenges in the ability to properly access and maintain an effective internal control environment over an acquired company to comply with public reporting requirements; problems assimilating or retaining employees; and other unidentified issues or contingencies not discovered in our pre-acquisition investigations and evaluations of those strategies and acquisitions.

We are subject to potential tax, labor and social security contingencies and tax liabilities related to uncertain tax positions.

We may subject to potential contingencies related to tax, labor and social security matters. We have reserved amounts based on the likelihood of an obligation in accordance with accounting guidance for probable loss contingencies. Loss contingency provisions are recorded for probable losses at management’s best estimate of a loss, or when a best estimate cannot be made, a minimum loss contingency amount is recorded. As of December 31, 2020, we have provided an amount of $23.4 million related to labor, social security and tax contingencies. While we believe that the assumptions and estimates used to determine contingent liabilities are reasonable, the ultimate outcome of these matters cannot presently be determined.

We evaluate our tax positions and establish liabilities for uncertain tax positions that may be challenged by local authorities and may not be fully sustained, despite our belief that the underlying tax positions are fully supportable. Uncertain tax positions are reviewed on an ongoing basis and are adjusted in light of changing facts and circumstances, including progress of tax audits, developments in case law, and closing of statute of limitations. Such adjustments are reflected in the income tax provision as appropriate.

Our estimate of the potential outcome for any uncertain tax issue is highly judgmental. Although we believe we have adequately reserved for our uncertain tax positions, no assurance can be given with respect to the final outcome of these matters.

As of December 31, 2020, we had $32.9 million of gross unrecognized tax benefits which, if recognized, would affect our effective tax rate. As of December 31, 2020, total gross interest and penalties accrued was $18.9 million. We recognized interest expense of $1.1 million in 2020 in connection with our unrecognized tax benefits.

We are routinely audited by U.S. federal and foreign income tax authorities. At any point in time, we may have tax audits underway at various stages of completion. These audits include questioning the timing and the amount of income and deductions, and the allocation of income and deductions among various tax jurisdictions.

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The Mexican Tax Authority is currently examining the income tax returns for the 2014, 2015 and 2017 fiscal years of our subsidiary, Viajes Beda. We received an examination report (oficio de observaciones) from the Mexican Tax Authority in connection with the 2014 income tax return of Viajes Beda, and have filed a settlement request (acuerdo conclusivo) before the Mexican Taxpayer Ombudsman (Procuraduría de la Defensa del Contribuyente) in order to settle the dispute with the Mexican Tax Authority. As of the day of this Annual Report we are awaiting response from the Mexican Taxpayer Ombudsman.

Internet regulation in the countries where we operate is scarce, and several legal issues related to the internet are uncertain.

Most of the countries where we operate do not have specific laws governing the liability of e-commerce business intermediaries, such as ourselves, for fraud, intellectual property infringement or other illegal activities committed by individual users or third-party infringing content hosted on a provider’s servers. This legal uncertainty allows for different judges or courts to decide very similar claims in different ways and establish contradictory case law.

In addition, we are subject to a variety of laws, decrees and regulations across the countries where we operate that affect e-commerce, electronic or mobile payments, tourism, data collection, data protection, privacy, anti-money laundering, taxation (including VAT or sales tax collection obligations), obligations to provide certain information to certain authorities about transactions which are processed through our platforms or about our users and those regulations applicable to consumer protection and businesses in general. However, it is not clear how existing laws governing issues such as general commercial activities, property ownership, copyrights and other intellectual property issues, taxation (including tax laws that require us to provide certain information about transactions consummated through our platforms or about our users) and personal privacy apply to online businesses. Many of these laws were adopted before the internet was available and, as a result, do not contemplate or address the unique issues of the internet.

Moreover, due to these areas of legal uncertainty, and the increasing popularity and use of the internet and other online services, it is possible that new laws and regulations will be adopted with respect to the internet or other online services. If laws relating to these issues are enacted, they may have a material adverse effect on our business, results of operations and financial condition.

We are subject to laws relating to the collection, use, storage and transfer of personally identifiable information about our users, especially financial information. Several jurisdictions have regulations in this area, and other jurisdictions are considering imposing additional restrictions or regulations. For example, in August 2018, Brazil approved its first comprehensive data protection law (Lei Geral de Proteção de Dados Pessoais or “LGPD”), which became effective beginning August 2020. If we fail to comply with these laws, which in many cases apply not only to third-party transactions but also to international transfers of information or transfers of information to third parties with which we have commercial relations, we could be subject to significant penalties and negative publicity, which would adversely affect us. As of the date of this Annual Report, we continue working on the implementation of all necessary measures to comply with such data protection law.

Because our services are accessible worldwide, other foreign jurisdictions may claim that we are required to comply with their laws. Laws regulating internet companies outside of the Latin American jurisdictions where we operate may be more restrictive to us than those in Latin America. In order to comply with these laws, we may have to change our business practices or restrict our services. We could be subject to penalties ranging from criminal prosecution, significant fines or outright bans on our services for failure to comply with foreign laws.

We process, store and use personal information, card payment information and other consumer data, which subjects us to risks stemming from possible failure to comply with governmental regulation and other legal obligations.

In our business, we use personal information, card payment information and other consumer data from users of our website and mobile applications. There are numerous laws regarding privacy and the storing, sharing, use, processing, transfer, disclosure and protection of personal information, card payment information and other consumer data, the scope of which are changing, subject to differing interpretations, and may be inconsistent between countries or conflict with other rules. We strive to comply with all applicable laws, policies, legal

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obligations and industry codes of conduct relating to privacy and data protection. It is possible, however, that these obligations may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or the practices of the company. Any failure or perceived failure by us, or our service providers, to comply with the privacy policies, privacy-related obligations to users or other third parties, or privacy related legal obligations, or any compromise of security that results in the unauthorized release or transfer of personally identifiable information, payment card information or other consumer data, may result in governmental enforcement actions, litigation or public statements against the Company by consumer advocacy groups or others and could cause our travel customers and members to lose trust in our Company, as well as subject us to bank fines, penalties or increased transaction costs, all of which could have an adverse effect on our business.

The regulatory framework for privacy issues is currently in flux and is likely to remain so for the foreseeable future. Practices regarding the collection, use, storage, transmission and security of personal information by companies operating over the internet have recently come under increased public scrutiny. Countries in Latin America are increasingly implementing new privacy regulations, resulting in additional compliance burdens and uncertainty as to how some of these laws will be interpreted.

Application of existing tax laws or regulations are subject to interpretation by taxing authorities.

The application of income and non-income tax laws and regulations to our products and services is subject to interpretation by the applicable taxing authorities across the multiple jurisdictions in which we operate our business. For example, in Brazil we are subject to corporate income tax (IRPJ), social contribution on net profits (CSLL), social contribution on total revenue (PIS and COFINS), withholding taxes, and a municipal tax on services (ISS). In Argentina, we are subject to income tax, value added tax, turnover tax and a 30% reverse withholding tax (Tax for an Inclusive and Solidarity Argentina (PAIS for its acronym in Spanish)) on purchases made in foreign currencies.

In both countries, we are subject to transfer pricing rules applicable to cross-border operations with related parties or parties in tax havens or subject to privileged fiscal regimes. These taxing authorities may become more aggressive in their interpretation and/or enforcement of such laws and regulations over time, as governments are increasingly focused on ways to increase revenue. This may contribute to an increase in audit activity and harsher stances by tax authorities. As such, additional taxes or other assessments may be in excess of our current tax reserves or may require us to modify our business practices to reduce our exposure to additional taxes going forward, any of which could have a material adverse effect on our business, financial condition and results of operations.

While we believe we currently comply in all material respects with applicable tax laws and regulations in the jurisdictions in which we operate, tax authorities may determine that we owe additional taxes. Moreover, we may have historical tax contingencies across multiple jurisdictions, and while we have made provisions for those contingencies which we considered probable, the amount of total contingencies may exceed our provisions. In addition, in accordance with U.S. GAAP, we record provisions for contingencies based on probable loss or when otherwise required under accounting rules, but we do not record provisions for possible and remote losses.

Significant judgment and estimation is required in determining our tax liabilities. In the ordinary course of our business, there are transactions and calculations, including intercompany transactions and cross-jurisdictional transfer pricing, for which the ultimate tax determination may be uncertain or otherwise subject to interpretation. Tax authorities may disagree with our intercompany charges, including the amount of or basis for such charges, cross-jurisdictional transfer pricing or other matters, and assess additional taxes. Although we believe our tax estimates are reasonable, the final determination of tax audits could be materially different from our historical income tax provisions and accruals, in which case we may be subject to additional tax liabilities, possibly including interest and penalties, which could have a material adverse effect on our cash flows and results of operations. Moreover, we have in the past and may in the future be required in certain jurisdictions to pay any such tax assessments prior to contesting their validity, which payments may be substantial.

Amendment to existing tax laws or regulations or enactment of new unfavorable tax laws or regulations could adversely affect our business and results of operations.

Many of the underlying laws or regulations imposing taxes and other obligations were established before the growth of the internet and e-commerce. If the tax or other laws or regulations were amended, or if new unfavorable laws or

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regulations were enacted, our tax payments or other obligations could increase, prospectively or retrospectively, which may subject us to interest and penalties, decrease the demand for our products and services if we pass on such costs to our travel customers, result in increased costs to update or expand our technical or administrative infrastructure or effectively limit the scope of our business activities if we decided not to conduct business in particular jurisdictions. As a result, these changes could have an adverse effect on our business, financial condition or results of operations.

Governments could adopt tax laws that increase our tax rate or tax liabilities or affect the carrying value of deferred tax assets or liabilities, including the termination of tax-free incentives or termination of treaties for the avoidance of double taxation. Any changes to tax laws could impact the tax treatment of our earnings and adversely affect our profitability. Our effective tax rate in the future could also be adversely affected by changes to our operating structure, changes in the mix of earnings in countries with differing statutory tax rates, or changes in the valuation of deferred tax assets and liabilities.

In addition, we have benefited from, and continue to benefit from, certain tax exemptions and incentive programs in various jurisdictions in which we have operations. When any of our tax exemptions or incentive programs expire or terminate, or if the applicable government withdraws or reduces the benefits of a tax exemption or incentive that we enjoy, our tax expense may materially increase and this increase may have a material impact on our results of operations. The applicable tax authorities may also disallow deductions claimed by us and assess additional taxable income on us in connection with their review of our tax returns. See “Item 4. Information on the Company — B. Business Overview — Regulation — Regulations Related to Taxation.”

Laws and regulations in the BVI may subject us to potential liability.

On 1 January 2019 the Economic Substance (Companies and Limited Partnerships) Act, 2018 (the “ES Act”) came into force in the British Virgin Islands. The ES Act was enacted in direct response to a scoping paper issued by the European Union’s Code of Conduct Group (Business Taxation) in June 2018. The scoping paper (a) expressed concerns regarding so-called harmful tax competition and the potential “misuse” of offshore entities for profit-shifting; and (b) set out requirements that certain jurisdictions outside the European Union must adopt in order for the jurisdiction to avoid being “blacklisted” by the European Union.

Under the ES Act and related regulations and guidelines, companies incorporated in the BVI that are not tax resident in another jurisdiction and which carry on certain specified activities must establish and maintain ‘economic substance’ in the BVI. As we are tax resident in the United States, we believe these substance requirements are not applicable to our Company.

We are subject to anti-corruption and economic sanctions laws and regulations in the jurisdictions in which we operate, including the U.S. Foreign Corrupt Practices Act and regulations administered and enforced by the U.S. Treasury Department’s Office of Foreign Assets Control. Failure to comply with these laws and regulations could negatively impact our business, our results of operations, and our financial condition.

We are subject to a number of anti-corruption and economic sanctions laws and regulations, including the U.S. Foreign Corrupt Practices Act (“FCPA”) and regulations administered and enforced by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”). Failure to comply with these laws and regulations could negatively impact our business, our results of operations, and our financial condition.

The FCPA and similar anti-bribery laws generally prohibit companies and their intermediaries from making improper payments or improperly providing anything of value to foreign officials, directly or indirectly, for the purpose of obtaining or keeping business and/or other benefits. The FCPA also requires maintenance of adequate record-keeping and internal accounting practices to accurately reflect transactions. Under the FCPA, companies operating in the United States may be held liable for actions taken by their strategic or local partners or representatives. Other jurisdictions in which we operate have adopted similar anti-corruption, anti-bribery and anti-kickback laws to which we are subject.

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Economic sanctions and embargo laws and regulations, such as those administered and enforced by OFAC, vary in their application, as they do not all apply to the same covered persons or proscribe the same activities, and such sanctions and embargo laws and regulations may be amended or strengthened over time. Although we believe that we are in compliance with all applicable sanctions and embargo laws and regulations, and intend to maintain such compliance, there can be no assurance that we will be in compliance in the future, particularly as the scope of certain laws may be unclear and may be subject to changing interpretations.

Civil and criminal penalties may be imposed for violations of these laws. We operate in some countries which are viewed as high risk for corruption and/or economic sanctions issues. Despite our ongoing efforts to ensure compliance with the FCPA and similar laws, and economic sanctions laws and regulations, there can be no assurance that our directors, officers, employees, agents, and third-party intermediaries will comply with those laws and our policies, and we may be ultimately held responsible for any such non-compliance. If we or our directors or officers violate such laws or other similar laws governing the conduct of our business (including local laws), we or our directors or officers may be subject to criminal and civil penalties or other remedial measures, which could harm our reputation and have a material adverse impact on our business, financial condition, and results of operations. Any investigation of any actual or alleged violations of such laws could also harm our reputation or have an adverse impact on our business, financial condition, and results of operations.

We are, and may be in the future, involved in various legal proceedings, the outcomes of which could adversely affect our business and results of operations.

We are, and may be in the future, involved in various legal proceedings relating to allegations of our failure to comply with consumer protection, labor, tax or antitrust regulations, that could involve claims or sanctions for substantial amounts of money or for other relief or that might necessitate changes to our business or operations.

Our websites contain information about hotels, flights, popular vacation destinations and other travel-related topics. It is possible that if any information, accessible on our websites, contains errors or false or misleading information, third parties could take action against us for losses incurred in connection with the use of such information. In addition, because consumer protection laws in many of our markets provide for joint liability, travel customers may bring claims against us for a failure or deficiencies in the provision of a travel product or service by one of our suppliers that is outside of our control.

The defense of any of these actions is, and may continue to be, both time-consuming and expensive. We cannot assure you that we will prevail in these legal proceedings or in any future legal proceedings and if such disputes were to result in an unfavorable outcome, it could result in reputational damage and have a material adverse effect on our business, financial condition and results of operations. For a discussion of certain key legal proceedings relating to us, see “Item 4. Information on the Company — Business Overview — Legal Proceedings.”

We may not be able to adequately protect and enforce our intellectual property rights; and we could potentially face claims alleging that our technologies infringe the property rights of others.

Our websites and mobile applications rely on brands, domain names, technology and content. We protect our brands and domain names by relying on trademark and domain name registration in accordance with laws in Latin America. We have also entered into confidentiality and invention assignment agreements with our employees and certain contractors, as well as confidentiality agreements with certain suppliers and strategic partners, in order to protect our technology and content. We own our technology platform, which is comprised of applications that we develop in-house using primarily open source software. We have not registered our technology, however, because we believe it would be difficult to replicate and that it is adequately protected by the agreements we have in place. Additionally, our technology is constantly evolving and any registration may run the risk of protecting outdated technology. Even with these precautions, it may be possible for another party to copy or otherwise obtain and use our intellectual property without our authorization or to develop similar intellectual property independently. Effective trademark protection may not be available in every jurisdiction in which our services are made available, and policing unauthorized use of our intellectual property is difficult and expensive. Any misappropriation or violation of our rights could have a material adverse effect on our business. Furthermore, we may need to go to court or other tribunals to enforce our intellectual property rights or to determine the validity and scope of the proprietary rights of others. These proceedings might result in substantial costs and diversion of resources and management attention.

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We currently license from third parties some of the technologies, trademarks and content incorporated into our websites. As we continue to introduce new services that incorporate new technologies, third parties’ trademarks and content, we may be required to license additional technologies, third parties’ trademarks and content. We cannot be sure that such technologies and content licenses will be available on commercially reasonable terms, if at all.

Third parties may assert that our services, products and technology, including software and processes, violate their intellectual property rights. As competition in our industry increases and the functionality of technology offerings further overlaps, such claims and counterclaims could increase. We cannot assure you that we do not or will not inadvertently infringe on the intellectual property rights of third parties. Any intellectual property claim against us, regardless of its merit, could have an adverse effect on our business, financial condition and results of operations and could be expensive and time consuming to defend. Our failure to prevail in such matters could result in loss of intellectual property rights, judgments awarding substantial damages and injunctive or other equitable relief against us, or require us to delay or cease offering services or reduce features in our services.

Increased labor costs, compliance with labor laws and regulations and failure to maintain good relations with labor unions may adversely affect our results of operations.

We are required to comply with extensive labor regulations in each of the countries in which we have employees, including with respect to wages, social security benefits and termination payments. If we fail to comply with these regulations we may face labor claims and government fines.

In the past, governments from certain countries in which we operate, including Argentina, have adopted laws, regulations and other measures requiring companies in the private sector to increase wages and provide specified benefits to employees. We cannot assure you that these governments will not do so again in the future. On December 13, 2019, the Argentine administration enacted Decree No. 34/2019 (extended by Decree No. 39/2021) that duplicates the amount of the statutory severance payments payable to employees hired before December 13, 2019 and fired between December 13, 2019 and December June 13, 2021. Also, by Decrees Nos. 329/20, 487/20, 624/20, 761/20, 891/20 and 39/21, all termination without cause is forbidden until December 31, 2021.

In addition, some of our employees in Argentina, Brazil and certain other countries are currently represented by labor unions. We may face pressure from our labor unions or otherwise to increase salaries. In Argentina, for example, employers in both the public and private sectors have historically experienced, and are currently experiencing, significant pressure from unions and their employees to further increase salaries due to the devaluation of the peso and high inflation. According to the data published by the Instituto Nacional de Estadística y Censos (National Statistics Institute or “INDEC”) regarding the evolution of salaries in the private and public sectors in Argentina, salary increases in both sectors have been of approximately 44.5% and 42.2% for 2019 and 28% and 24.2%, for 2020, respectively.

Due to high levels of inflation and full employment in the tech industry, we expect to continue to raise salaries. If future salary increases in the Argentine peso or the currencies of other countries in which we have employees exceed the pace of the devaluation of those currencies, such salary increases could adversely affect our business, results of operations and financial condition.

Moreover, while we have enjoyed satisfactory relationships with labor unions that represent our employees, labor-related disputes may still arise. Labor disputes that result in strikes or other disruptions could adversely affect our business, financial condition and result of operations.

A failure to comply with current laws, rules and regulations or changes to such laws, rules and regulations and other legal uncertainties may adversely affect our business, results of operations or business growth.

We have been subject, and we will likely be subject in the future, to inquiries from time to time from regulatory bodies concerning compliance with consumer protection, tax, labor, antitrust and travel industry-specific laws and regulations.

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Such inquiries have included investigations and legal proceedings relating to the travel industry and, in particular, parity provisions in contracts between hotels and travel companies, including us, as well as allegations of “geopricing” or “geoblocking practices.” See Item 4. “Business—Legal and Regulatory—Legal Proceedings” for more information. Parity provisions are significant to our business model, and their removal or modification may adversely affect our business, financial condition and results of operations. We are unable at this time to predict the timing or outcome of these various investigations and lawsuits, or similar future investigations or lawsuits, and their impact, if any, on our business and results of operations.

The failure of our businesses to comply with these laws and regulations could result in fines and/or proceedings against us by governmental agencies and/or consumers, which if material, could adversely affect our business, financial condition and results of operations. Further, if such laws and regulations are not enforced equally against other competitors in a particular market, our compliance with such laws may put us at a competitive disadvantage vis-à-vis competitors which do not comply with such requirements.

Complaints from travel customers or negative publicity about our services can diminish consumer confidence and adversely affect our business.

In the past, government and consumer protection agencies have received a substantial number of complaints about our products, which represent a small percentage of our total transactions but could increase in the future. Many of these claims are related to the behavior of our suppliers. From time to time, we are involved in disputes or regulatory inquiries that arise in the ordinary course of business. The number and significance of these disputes and inquiries have increased as our business has expanded. We have responded to inquiries from regulatory agencies; however, we are likely to receive inquiries in the future, which may lead to actions against us. If during these inquiries we were found to violate any laws or to constitute unfair business practices, we could be subject to civil damages, enforcement actions, fines or penalties. Such actions or fines could require us to restructure our business processes in ways that would harm our business and cause us to incur substantial costs.

Because volume and growth in the number of new travel customers are key drivers of our revenue and profitability, travel customer’s complaints or negative publicity about our customer service could severely diminish consumer confidence and use of our services. Measures we sometimes take to combat risks of fraud and breaches of privacy and security can damage relations with our travel customers. To maintain good customer relations, we need prompt and accurate customer service to resolve irregularities and disputes. Effective customer service requires significant personnel expense and investment in developing programs and technology infrastructure to help customer service representatives carry out their functions. These expenses, if not managed properly, could significantly impact our profitability. Failure to manage or train our customer service representatives properly, could compromise our ability to handle our travel customer’s complaints effectively. In addition, beginning in March 2020 we experienced an increase in complaints from travel customers in connection with requests for cancellation and reimbursement of bookings due to the COVID-19 pandemic. In light of government stay-at-home orders and other business interruptions and the increase in cancellation requests, the ability of our customer service team to ensure prompt and accurate resolution to requests, irregularities and disputes was affected. If we do not handle travel customer complaints effectively, our reputation and brand may suffer and we may lose our travel customers confidence.

Consumer adoption and use of mobile devices creates new challenges.

Widespread adoption of mobile devices, coupled with the web browsing functionality and development of apps available on these devices, is driving substantial online traffic and commerce to mobile platforms. We have experienced a significant shift of business to mobile platforms and our suppliers are also seeing a rapid shift of traffic to mobile platforms. Many of our competitors and new market entrants are offering mobile apps for travel products and other functionality, including proprietary last-minute discounts for accommodation reservations. Advertising and distribution opportunities may be more limited on mobile devices given their smaller screen sizes. The average price of travel products purchased in mobile transactions may be less than a typical desktop transaction due to different consumer purchasing patterns. Further, given the device sizes and technical limitations of tablets and smartphones, mobile consumers may not be willing to download multiple apps from multiple companies providing a similar service and instead prefer to use one or a limited number of apps for their mobile travel activity. As a result, the consumer experience with mobile apps as well as brand recognition and loyalty are likely to become increasingly important. Our mobile offerings drive a material and increasing share of our business. We believe that mobile

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bookings present an opportunity for growth and are necessary to maintain and grow our business as consumers increasingly turn to mobile devices instead of a desktop computer. As a result, it is increasingly important for us to develop and maintain effective mobile apps and websites optimized for mobile devices to provide consumers with an appealing, easy-to-use mobile experience. If we are unable to continue to innovate rapidly and create new, user-friendly and differentiated mobile offerings and advertise and distribute on these platforms efficiently and effectively, or if our mobile offerings are not used by consumers, we could lose considerable market share to existing competitors or new entrants and our business, financial condition and results of operations could be adversely affected.

Moreover, we are dependent on the compatibility of our app with popular mobile operating systems that we do not control, such as Android and iOS, and any changes in such systems that degrade our products’ functionality or give preferential treatment to competitive products could adversely affect the usage of our app on mobile devices. Additionally, in order to deliver high quality mobile products, it is important that our products work well with a range of mobile technologies, systems, networks, and standards that we do not control. We may not be successful in developing relationships with key participants in the mobile industry or in developing products that operate effectively with these technologies, systems, networks, or standards. In the event that it is more difficult for our users to access and use our app on their mobile devices, or if our users choose not to access or use our app on their mobile devices or use mobile products that do not offer access to our app, our user growth and user engagement could be harmed.

We rely on Expedia for substantially all of the hotel and other lodging products that we offer for all countries outside Latin America.

Substantially all hotel and other lodging products that we offer through our platform for all countries outside Latin America are provided to us by affiliates of Expedia pursuant to the Expedia Outsourcing Agreement. In addition, Expedia is the preferred provider to us of hotel and other lodging products in Latin America. For more information on our relationships with Expedia, see “Item 7. Major Shareholders and Related Party Transactions — B. Related Party — Relationship with Expedia.”

If Expedia’s affiliates cease to provide us with their hotel and other lodging products, we may be unable to offer these products to our users for some time and it might be difficult for us to replace this supply in the short term, which would negatively affect our business, financial condition and results of operations.

Pursuant to the Expedia Outsourcing Agreement, Expedia pays monthly marketing fees to us, which are calculated as a percentage of the gross booking value of the bookings that we sourced through Expedia during that month. We are required to maintain a level of bookings through Expedia such that those marketing fees equal at least $5.0 million in a six-month period; otherwise, Expedia may require us to pay a $125.0 million termination fee. On August 20, 2020, we entered into an amendment with respect to the Expedia Outsourcing Agreement, whereby the parties have agreed, among other things, to waive Expedia’s termination rights under the agreement relating to minimum bookings requirements during the ongoing pandemic through December 31, 2021, subject to certain conditions.

In addition, the agreement was amended and restated on November 14, 2019 in order to, among other things, allow us to source a limited percentage of our hotel bookings outside of Latin America without Expedia and from certain pre-agreed properties. However, if such transactions exceed the agreed percentage threshold during a six-month period, we may be required to pay Expedia compensation; and if our non-Expedia sourced bookings outside of Latin America exceed the agreed percentage of gross bookings outside of Latin America for two consecutive quarters, or a higher agreed percentage threshold in one quarter, Expedia may elect to become our exclusive provider outside of Latin America once again. If such transactions exceed the agreed percentage of the minimum bookings set forth therein for any three consecutive months or any three months within a six-month period, then Expedia may require us to pay a $125.0 million termination fee. The Expedia Outsourcing Agreement may also be terminated by Expedia, and we may be required to pay the termination payment, if the termination by Expedia is for our material breach of certain terms under the agreement or our Shareholder Agreements. In addition, Expedia may unilaterally terminate the Expedia Outsourcing Agreement in the event of a change of control of our Company. Moreover, if the hotel and other lodging products provided by Expedia were to suffer a deterioration in scale or quality, or if their pricing were not attractive, the products and services that we offer to our users would be adversely affected. The

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Expedia Outsourcing Agreement may be terminated by us unilaterally beginning from March 6, 2022 upon payment of a $125.0 million termination payment to Expedia. Consequently, if a deterioration in the scale or quality of the products and services provided exclusively to us by affiliates of Expedia were to occur, or if their pricing were not attractive, it could be difficult for us to terminate the Expedia Outsourcing Agreement.

We may experience constraints in our liquidity and may be unable to access capital when necessary or desirable, either of which could adversely affect our financial condition.

Although we believe we have a sufficient level of cash and cash equivalents to cover our working capital needs in the ordinary course of business, we may, from time to time, explore additional financing sources and means to improve our liquidity and lower our cost of capital, which could include equity, equity-linked and debt financing and factoring activities. In addition, from time to time, we review acquisition and investment opportunities to further implement our business strategy and may fund these investments with bank financing, the issuance of debt or equity or a combination thereof.

The availability of financing depends in significant measure on capital markets and liquidity factors over which we exert no control. In light of periodic uncertainty in the capital and credit markets, we can provide no assurance that sufficient financing will be available on desirable or even any terms to improve our liquidity, fund investments, acquisitions or extraordinary actions or that our counterparties in any such financings would honor their contractual commitments, which in turn could negatively affect our business, results of operations and financial condition. In addition, if we raise funding through the issuance of new equity or equity-linked securities, it would dilute the percentage ownership of our then existing shareholders.

The ongoing COVID-19 pandemic has adversely affected our liquidity. We are currently taking additional actions to improve our liquidity during the crisis, which include expense reductions and preserving and raising cash. In order to improve our liquidity, in September 2020 we raise $200 million in gross proceeds in a private placement of shares of newly created series of preferred stock and warrants to purchase our common stock. As conditions are uncertain and changing rapidly, we cannot assure you that our business will not require additional funds for operating activities in the future, particularly if the effects of the pandemic persist, nor we can assure you that we will be able to access new funding on favorable terms or at all.

Our business experiences seasonal fluctuations and quarter-to-quarter comparisons of our results may not be meaningful.

Our business experiences fluctuations, reflecting seasonal variations in demand for travel services. We generally experience seasonal fluctuations in the demand for our travel services. Our most significant market, Brazil, and the rest of South America were we operate, are located in the Southern hemisphere where summer runs from December through February and winter runs from June through August. Our most significant market in the Northern hemisphere is Mexico where summer runs from June through August and winter runs from December through February. Accordingly, traditional leisure travel bookings in the Southern hemisphere are generally the highest in the second, third and fourth quarters of the year as travelers plan and book their winter and summer holiday travel. The number of bookings typically decreases in the first quarter of the year. In the Northern hemisphere, bookings are generally the highest in the first three quarters as travelers plan and book their spring, summer and winter holiday travel. The seasonal revenue impact is exacerbated with respect to income by the nature of variable cost of revenue and direct sales and marketing costs, which is typically realized in closer alignment to booking volumes, and the more stable nature of fixed costs.

The continued growth of international operations or a change in product mix may influence the typical trend of the seasonality in the future, and there may also be business or market driven dynamics that result in short-term impacts to revenue or profitability that differ from the typical seasonal trends.

Due to COVID-19, which led to significant cancellations for future travel during the first half of the year and has impacted new travel bookings for the majority of 2020, we have not experienced our typical seasonal pattern for

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bookings, revenue and profit during 2020. In addition, with the lower new bookings and elevated cancellations in the merchant business model, our typical, seasonal working capital source of cash has been significantly disrupted resulting in unfavorable working capital trends and material negative cash flow since the second quarter of 2020 when we typically generate significant positive cash flow. Seasonal trends were more normalized during the fourth quarter, but it is difficult to forecast the seasonality for the upcoming quarters, given the uncertainty related to the duration of the impact from COVID-19 and the shape and timing of any sustained recovery. In addition, we are experiencing much shorter booking windows, which could also impact the seasonality of our working capital and cash flow.

As a result, quarter-to-quarter comparisons of our results may not be meaningful. Moreover, seasonal fluctuations in our results of operations could result in declines in our share price that are not related to the overall performance and prospects of our business.

The use of derivative financial instruments may adversely affect our results of operations, particularly in a volatile and uncertain market.

From time to time, we enter into derivative transactions to manage our risks associated with currency exchange rates and interest rates. Significant changes may occur in our portfolio of derivative instruments due to increasing volatility and the fluctuation of the currencies of certain countries where we operate, including Brazil, Mexico and Argentina, against the dollar and volatility in the relevant interest rates, and we may incur net losses from our derivative financial instruments. The fair value of the derivative instruments fluctuates over time as a result of the effects of future interest rates and exchange rates. These values must be analyzed in connection with the underlying transactions and as a part of our total average exposure to interest rate and exchange rate fluctuations. It is difficult to predict the magnitude of the risk resulting from derivative instruments because the appreciation is imprecise and variable. We may be adversely affected by our derivative financial positions.

Risks Related to Latin America

Latin American countries are subject to political and social instability.

Political and social developments in Latin America, including government deadlock, instability, civil strife, terrorism, high levels of crime, expropriations and other risks of doing business in Latin America could impact our business, financial condition and results of operations.

For example, in Brazil, as a result of the ongoing Operation Car Wash (Lava Jato investigation), a number of senior politicians have resigned or been arrested and other senior elected officials and public officials are being investigated for allegations of corruption. In 2016 the Brazilian Senate impeached President Rousseff for violations of fiscal responsibility laws, and the then Vice-President Michel Temer assumed office to complete the remainder of the presidential mandate. In July 2017, former President Luiz Inácio Lula da Silva was convicted of corruption and money laundering by a federal court in the State of Paraná in connection with the Operation Car Wash (Lava Jato). After Mr. Temer’s mandate as President ceased in the beginning of 2019, he was arrested in the context of the corruption investigation on a warrant issued by the federal justice, making him the second former president (following Luiz Inácio Lula da Silva) arrested as part of Operation Car Wash (Lava Jato). Jair Bolsonaro was elected as the new President of Brazil in October 2018, and took office in January 2019. His election led to a market recovery and the recovery of the value of local stock and the Brazilian real, however we cannot assure that this confidence in the market will continue. While the potential outcome of these and other investigations is uncertain, they have already had a material adverse effect on the image and reputation of the companies involved, as well as the market’s overall perception of the Brazilian economy. There can be no guarantee that investigations will not lead to greater political and economic instability or whether new allegations against government employees and officials and/or private companies will arise in the future.

In October 2019, Argentine presidential, legislative and certain provincial and municipal governments elections were held and Alberto Fernández was elected president. The new administration took office on December 10, 2019. Certain members of the current government coalition, including president Alberto Fernández and vice president Cristina Fernández de Kirchner, were part of administrations which in the past were characterized by high levels of government intervention and policies at times disadvantageous to investors and the private sector. On December 23,

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2019, the new Argentine government passed a law granting emergency powers to the executive branch, among other measures. We cannot predict what policies the new Argentine government will implement under these emergency powers, nor their impact in the Argentine economy.

Although political and social conditions in one country may differ significantly from another country, events in any of our key markets could adversely affect our business, financial conditions or results of operations.

Latin American countries have experienced periods of adverse macroeconomic conditions.

Our business is dependent upon economic conditions prevalent in Latin America. Latin American countries have historically experienced economic instability, including uneven periods of economic growth as well as significant downturns. As a consequence of economic conditions in global markets and lower commodity prices and demand for commodities, many of the economies of Latin American countries have recently slowed their rates of growth, and some have entered recessions.

For example, according to the Brazilian Institute for Geography and Statistics (Instituto Brasileiro de Geografia e Estadística, or “IBGE”), Brazil real GDP increased 1.1% in 2018, and 1.1% in 2019 and in 2020 its been forecasted to decrease 4.1%. In addition, the credit rating of the Brazilian federal government was downgraded in 2015 and 2016 by all major credit rating agencies and is no longer investment grade.

According to the Mexican National Institute for Statistics and Geography (Instituto Nacional de Estadística y Geografía or “INEGI”), Mexico’s real GDP increased 2.20% in 2018 and decreased 0.3% in 2019. For 2020, the INEGI has preliminarily estimated a decrease in real GDP of approximately 10.0%.

The Argentine economy has experienced significant volatility, including multiple periods of low or negative growth and high levels of inflation and currency depreciation. According to restated information released by INDEC, Argentina’s real GDP decreased by 2.5% in 2018 and decreased 2.1% in 2019. For 2020, the INDEC has preliminarily estimated a decrease in real GDP of 11.8%.

Since our business is dependent on discretionary consumer spending, which is influenced by general economic conditions, any prolonged economic downturn in any of our key markets could have adverse effects on our business, financial condition and results of operations.

Latin American governments have exercised and continue to exercise significant influence over their economies.

Governments in Latin America frequently intervene in the economies of their respective countries and occasionally make significant changes in policy and regulations. Governmental actions have often involved, among other measures, nationalizations and expropriations, price controls, currency devaluations, mandatory increases on wages and employee benefits, capital controls and limits on imports.

Our business, financial condition and results of operations may be adversely affected by changes in government policies or regulations, including such factors as exchange rates and exchange control policies; inflation control policies; price control policies; consumer protection policies; import duties and restrictions; liquidity of domestic capital and lending markets; electricity rationing; tax policies, including tax increases and retroactive tax claims; and other political, diplomatic, social and economic developments in or affecting the countries where we operate.

In the future, the level of intervention by Latin American governments may continue or increase. We cannot assure you that these or other measures will not have a material adverse effect on the economy of each respective country and, consequently, will not adversely affect our business, financial condition and results of operations.

Inflation, and government measures to curb inflation, may adversely affect Latin American economies.

Many of the countries in which we operate have experienced, or are currently experiencing, high rates of inflation. For example, the inflation rate in Brazil, as reflected by the Broad Consumer Price Index (Índice Nacional de Preços ao Consumidor Amplo, or “IPCA”), published by the IBGE, was 3.8% in 2018, 4.3% in 2019 and 4.52% in 2020. In

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the past, Brazil has recorded high inflation rates, which, combined with other measures taken by the Brazilian government to fight inflation and speculation on what measures would be taken, has materially adversely affected the Brazilian economy and contributed to economic uncertainty in Brazil, which increases volatility in the Brazilian capital markets and may materially adversely affect us.

In Mexico, the inflation published by the INEGI was 4.83%, 2.83% and 3.15% in 2018, 2019 and 2020 respectively.

In Argentina, inflation has materially undermined the Argentine economy and the government’s ability to foster conditions that permit stable growth. According to measurements from INDEC of the national consumer price index, cumulative consumer price inflation (Inflacion Acumulada de Precios al Consumo) for 2018 was 47.6%, for 2019 was 59.8% and for 2020 was 36.1%.

Inflation in Mexico and Argentina could increase our costs of operations and impact our financial condition and results of operations. Inflation rates may continue to increase in the future, and the government measures to control inflation, adopted presently or in the future, remain uncertain. Measures taken by the governments of these countries to control inflation have often included maintaining a tight monetary policy with high interest rates, thereby restricting the availability of credit and retarding economic growth. Inflation, measures to combat inflation and public speculation about possible additional actions have contributed materially to economic uncertainty in many of these countries.

Exchange rate fluctuations against the dollar in the countries in which we operate could negatively affect our results of operations.

Local currencies used in the conduct of our business are subject to depreciation and volatility. The currencies of many countries in Latin America have experienced significant volatility in the past, particularly against the dollar.

For example, the Brazilian real has historically experienced frequent, sometimes significant, fluctuations relative to the dollar. The real depreciated 17%, 4% and 29% in 2018, 2019 and 2020, respectively, based on official exchange rates as reported by the Brazilian Central Bank. A devaluation of the Brazilian real relative to the dollar could create inflationary pressures in Brazil and cause the Brazilian government to, among other measures, increase interest rates. Any depreciation of the Brazilian real may generally restrict access to the international capital markets, and would also reduce the dollar value of our results of operations. Restrictive macroeconomic policies could reduce the stability of the Brazilian economy and harm our results of operations and profitability. In addition, domestic and international reactions to restrictive economic policies could have a negative impact on the Brazilian economy.

In Mexico, the peso depreciated 0.25% during 2018, appreciated 4% during 2019 and depreciated 5% during 2020, in each case, with respect to the dollar.

Fluctuations in the value of the Argentine peso continue to affect the Argentine economy. During the years 2018, 2019 and 2020, the Argentine peso depreciated 51%, 59% and 40%, respectively, with respect to the dollar. As a result of the greater volatility of the Peso, the former government announced several measures to restore market’s confidence and stabilize the value of the Argentine peso. During 2019, with the intention to reduce the amount of Argentine pesos available in the market and reduce the demand for foreign currency, the government established a new regime for a stricter control of the local monetary base, which would initially remain in place until December 2019, and was further complemented by the reinstatement of foreign currency controls on September 2019.

We are subject to foreign currency exchange controls in certain countries in which we operate.

Certain Latin American economies have experienced shortages in foreign currency reserves and their respective governments have adopted restrictions on the ability to transfer funds out of the country and convert local currencies into dollars.

For example, Brazilian law provides that whenever there is a serious imbalance in Brazil’s balance of payments or reason to foresee a serious imbalance, the Brazilian government may impose temporary restrictions on the remittance to foreign investors of the proceeds of their investments in Brazil.

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In the case of Argentina, in 2001 and 2002 imposed exchange controls and transfer restrictions substantially limiting the ability of companies to make payments abroad. During 2019, the Argentine government established a new regime for a stricter control of the local monetary base, which was meant to initially remain in place until December 2019, in an attempt to reduce the amount of Argentine pesos available in the market and reduce the demand for foreign currency. Complementing these measures, on September 2019, foreign currency controls were reinstated in Argentina. For further information on this topic, see Item 10. “Additional Information – Exchange Controls”.

Under current Argentine law, we are restricted from accessing the official foreign exchange market to make dividend payments to us from our Argentine subsidiaries without prior approval from the Argentine Central Bank. In addition, Argentina recently enforced some measures that control and restrict the capacity of individuals and companies to exchange Argentine pesos for foreign currencies, conditioned to prior approval from the Argentine Central Bank, which could eventually restrict the ability to exchange Argentine pesos for other currencies, such as dollars. Restrictions currently apply to dollar purchases via bank account and in cash. In December 2019, the Argentine government implemented a new reverse withholding tax PAIS, with a rate of 30% on transactions involving –among others– the acquisition by Argentine residents of foreign currency; foreign services through credit and debit cards; services to be provided abroad, contracted through Argentine travel and tourism agencies –wholesale or retailers–; and international passenger transport services (by land, air, aquatic and road). In addition the Argentine Federal Tax Authorities (AFIP) issued on September 16, 2020 General Resolution No. 4815/2020, which imposes an additional 35% reverse withholding tax applicable on same transactions by Argentine residents.

We cannot assure you that foreign exchange controls in Brazil, Argentina or any other country where we operate, may not reemerge or worsen in the future to prevent capital flight, counter a significant depreciation of the Brazilian real, Argentine peso or other currency, or address other unforeseen circumstances. Additional controls could have a negative effect on the ability of our operating entities in the affected country to access the international credit or capital markets.

Any shortages or restrictions on the transfer of funds from abroad may impede our ability to convert these currencies into dollars and to transfer funds, including for the payment of dividends or debt. Moreover, such restrictions limit our ability to use funds for operating purposes in other countries. Consequently, if we are prohibited from transferring funds out of the countries in which we operate, our business, financial condition and results of operations could be adversely affected. For a discussion of certain foreign exchange regulations applicable to us, see “Item 10. Additional Information — Exchange Controls.”

Those kinds of exchange controls could have a material adverse impact on our operations, business, financial condition and results of operations. It is uncertain whether the Brazilian and/or Argentine governments will or will not increase such controls or restraints which could affect the ability to make payments to foreign creditors or suppliers, and dividend payments to shareholders.

Developments in other markets may affect Latin America.

The market value of companies like us may be, to varying degrees, affected by economic and market conditions in other global markets. Various Latin American economies have been adversely impacted by the political and economic events that occurred in several emerging economies in recent times, including Mexico in 1994, the collapse of several Asian economies between 1997 and 1998, the economic crisis in Russia in 1998, the Brazilian devaluations in January of 1999 and 2002 and the Argentine crisis of 2001 and 2002. In addition, Latin American economies have been adversely affected by events in developed countries, such as the 2008 and 2009 global financial crisis that arose in the United States, and the current COVID-19 pandemic in 2020 and 2021.

As of the date of this Annual Report, recent global developments have occurred in the world which could impact the economies of the Latin American countries in which we operate and consequently have an adverse effect on our business, financial condition and results of operations, such as any new restrictions on travel, immigration or trade.

Developments of a similar magnitude to the international markets in the future can be expected to adversely affect the economies of Latin American countries and, therefore, us.

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Risks Related to our Ordinary Shares

The strategic interests of our significant shareholders may, from time to time, differ from, and conflict with, our interests and the interests of our other shareholders.

As of March 31 2021, funds affiliated with L. Catterton held warrants exercisable for 13.58% of our outstanding ordinary shares, Expedia held 11.84% of our outstanding ordinary shares, Tiger Global held 11.71% of our outstanding ordinary shares, Waha Capital held Series B Preferred Shares convertible into 7.2% of our outstanding ordinary shares, Dorsey Asset Management LLC (“Dorsey”) held 5.95% of our outstanding ordinary shares and Arisaig Global Emerging Markets Consumer Fund (Singapore) Pte Ltd (“Arisaig”) held 5.51% of our outstanding ordinary shares. If L. Catterton, Expedia, Tiger Global, Waha Capital, Dorsey, Arisaig or other investors acquire or continue to own and control, directly or indirectly, a significant portion of our voting share capital, even if their respective interests represent less than a majority of our total voting share capital, such shareholders may be able to exert influence over decisions at both the shareholder and board level of our Company. For more information, see “Item 7. Major Shareholders and Related Party Transactions.”

The strategic interests of our significant shareholders may differ from, and conflict with, our interests and the interests of our other shareholders in material respects. In addition, our memorandum and articles of association provides that Expedia and any of our directors affiliated with Expedia do not have any duty to refrain from engaging, directly or indirectly, in the same business activities or similar business activities or lines of business in which we operate.

Expedia also competes in the global travel industry, and also acts as a supplier to us and certain of our competitors. For a further description of our relationship with Expedia, see “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions,” “—Risks Related to our Business—We rely exclusively on Expedia for the hotel and other lodging products that we offer for all countries outside Latin America,” and “Item 16G. Corporate Governance—Differences in Corporate Law—Conflict of Interest.”

We cannot assure you that the actions of Expedia and other significant shareholders, will not conflict with our interests or the interests of our other shareholders.

We are a foreign private issuer under U.S. securities regulations and, as a result, we are not subject to U.S. proxy rules and we are subject to Exchange Act reporting obligations that, to some extent, are more lenient and less frequent than those of a U.S. issuer.

We report under the Exchange Act as a non-U.S. company and a “foreign private issuer,” as such term is defined under U.S. securities regulations. Because we qualify as a foreign private issuer, we are exempt from certain provisions of the Exchange Act that are applicable to U.S. public companies, including (1) the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; (2) the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and (3) the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified information, or current reports on Form 8-K upon the occurrence of specified events. In addition, we are not required to file our Annual Report on Form 20-F until 120 days after the end of each fiscal year, while U.S. domestic issuers that are accelerated filers are required to file their Annual Report on Form 10-K within 75 days after the end of each fiscal year. Foreign private issuers are also exempt from Regulation Fair Disclosure, aimed at preventing issuers from making selective disclosures of material information. As a result of the above, even though we are required to furnish reports on Form 6-K disclosing whatever information we have made or are required to make public pursuant to BVI law or distribute to our shareholders and that is material to our Company, you may not have the same protections afforded to shareholders of companies that are not foreign private issuers.

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We are exempt from certain corporate governance requirements of the New York Stock Exchange.

We are exempt from certain corporate governance requirements of the New York Stock Exchange, by virtue of being a foreign private issuer. The standards applicable to us are considerably different than the standards applied to U.S. domestic issuers. For instance, we are not required to:

• have a majority of our board of directors be independent;

• have a compensation committee or a nominating or corporate governance committee;

• have regularly scheduled executive sessions with only non-management directors;

• have an executive session of solely independent directors each year; or

• adopt and disclose a code of business conduct and ethics for directors, officers and employees.

For more information, see “Item 6. Directors, Senior Management and Employees — A. Directors and Senior Management.” We have relied on and intend to continue to rely on some of these exemptions. As a result, you may not be provided with the benefits and protections of certain corporate governance requirements of the New York Stock Exchange.

We are an “emerging growth company” and the reduced disclosure and attestation requirements applicable to emerging growth companies could make our ordinary shares less attractive to investors.

We are an “emerging growth company” (an “EGC”), as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”), and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not EGCs, including not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act for up to five fiscal years after our initial public offering in September 2017. Section 404(b) of the Sarbanes-Oxley Act would otherwise require our independent registered public accounting firm to attest to and report on the effectiveness our internal control structure and procedures for financial reporting.

In addition, Section 107 of the JOBS Act also provides that an EGC may take advantage of the extended transition period provided in Section 13(a) of the Exchange Act for complying with new or revised accounting standards. In other words, an EGC may delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected not to take advantage of the benefits of this extended transition period and, therefore, are subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. This election is irrevocable.

We will cease to be an EGC upon the earliest of: (1) the last day of the fiscal year during which we have revenue of $1.07 billion or more, (2) the last day of the fiscal year following the fifth anniversary of our initial public offering in September 2017, (3) the date on which we have issued more than $1 billion in non-convertible debt during the previous three-year period, or (4) when we become a “large accelerated filer,” as defined in Rule 12b-2 under the Exchange Act. We currently expect to cease being an EGC on December 31, 2021.

The requirements of being a public company may strain our resources and distract our management.

As a public company, we are subject to the reporting requirements of the Exchange Act and requirements of the Sarbanes-Oxley Act applicable to a foreign private issuer and EGC. These requirements may place a strain on our systems and resources. The Exchange Act requires that we file annual and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires that we maintain effective disclosure controls and procedures and internal controls over financial reporting. To maintain and improve the effectiveness of our disclosure and internal controls and procedures, we need to commit significant resources, potentially hire additional staff and provide additional management oversight. We have implemented additional procedures and processes for the purpose of addressing the standards and requirements applicable to public companies. In addition, sustaining our

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growth also will require us to commit additional management, operational and financial resources to identify new professionals to join our Company and to maintain appropriate operational and financial systems to adequately support expansion. These activities may divert management’s attention from other business concerns, which could have a material adverse effect on our business, financial condition and results of operations.

We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.

We are a “foreign private issuer,” as such term is defined under the Securities Act, and, therefore, we are not required to comply with all the periodic disclosure and current reporting requirements of the Exchange Act and related rules and regulations. Under the Securities Act, the determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter and, accordingly, the next determination will be made with respect to us on June 30, 2021.

In the future, we would lose our foreign private issuer status if a majority of our shareholders, directors or management are U.S. citizens or residents and we fail to meet additional requirements necessary to avoid loss of foreign private issuer status. Although we have elected to comply with certain U.S. regulatory provisions, our loss of foreign private issuer status would make such provisions mandatory. If we are not a foreign private issuer, we will be required to file periodic reports and registration statements on U.S. domestic issuer forms with the SEC, which are more detailed and extensive than the forms available to a foreign private issuer. For example, the Annual Report on Form 10-K requires domestic issuers to disclose executive compensation information on an individual basis with specific disclosure regarding the domestic compensation philosophy, objectives, annual total compensation (base salary, bonus and equity compensation) and potential payments in connection with change in control, retirement, death or disability, while the Annual Report on Form 20-F permits foreign private issuers to disclose compensation information on an aggregate basis. We will also have to mandatorily comply with U.S. federal proxy requirements, and our executive officers, directors and principal shareholders will become subject to the short-swing profit disclosure and recovery provisions of Section 16 of the Exchange Act. We may also be required to modify certain of our policies to comply with good governance practices associated with U.S. domestic issuers. In addition, we may lose our ability to rely upon exemptions from certain corporate governance requirements on U.S. stock exchanges that are available to foreign private issuers. Such transition and modifications will involve additional costs and may divert our management’s attention from other business concerns, which could have a material adverse effect on our business, financial condition and results of operations.

Any failure to maintain an effective system of internal controls may result in material misstatements of our consolidated financial statements or cause us to fail to meet our reporting obligations or fail to prevent fraud; and in that case, our shareholders could lose confidence in our financial reporting, which would harm our business and could negatively impact the price of our ordinary shares.

Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, we are required to furnish a report by our senior management on our internal control over financial reporting. However, while we remain an EGC we are not required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. We currently expect to cease being an EGC on December 31, 2021. In this regard, we will need to continue to dedicate internal resources, potentially engage outside consultants, adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate. Despite our efforts, there is a risk that we will not be able to conclude, within the prescribed timeframe or at all, that our internal control over financial reporting is effective as required by Section 404. If we identify one or more material weaknesses, it could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements. Management has excluded Koin and Best Day from its assessment of internal control over financial reporting as of December 31, 2020, because such entities were acquired in August 2020 and October 2020, respectively. When we include Best Day and Koin in our internal control over financial reporting as of December 31, 2021, such inclusion could result in the identification of one or more significant deficiencies or material weaknesses related to such businesses.

Effective internal controls are necessary for us to provide reliable and accurate financial reports on a timely basis and prevent fraud. If we fail to maintain an effective system of internal controls, we might not be able to report our financial results accurately or on a timely basis or prevent fraud; and in that case, our shareholders could lose

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confidence in our financial reporting or we could be sanctioned by the SEC, which would harm our business and could negatively impact the price of our ordinary shares. While we believe that we have sufficient personnel and review procedures to allow us to maintain an effective system of internal controls, we cannot provide assurance that we will not experience potential material weaknesses in our internal control. Even if we conclude that our internal control over financial reporting provides reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with U.S. GAAP, because of its inherent limitations, internal control over financial reporting may not prevent or detect fraud or misstatements. Failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm our results of operations or cause us to fail to meet our future reporting obligations.

Future issuances of our ordinary or other classes of shares may cause a dilution in your shareholding.

We may raise additional funding to meet our working capital, capital expenditure requirements for our planned long-term capital needs, or to fund future acquisitions. If such funding is raised through issuance of new equity or equity-linked securities, it may cause a dilution in the percentage ownership of our then existing shareholders.

From time to time we may grant equity-based compensation to our management and employees, which may dilute the value of your ordinary shares.

Pursuant to the Amended and Restated 2016 Stock Incentive Plan, we may grant restricted stock units (“RSUs”) and stock options to our directors, officers and/or employees. As of December 31, 2020, we had 1,919,099 shares of common stock reserved for new stock-based awards under the Amended and Restated 2016 Stock Incentive Plan. We issue new shares to satisfy the exercise or release of stock-based awards.

During 2020, we started issuing RSUs as our primary form of stock-based compensation. During 2020 and 2019, we granted an aggregate of 1,409,680 and 340,565 RSUs to our employees, directors and management. During 2020, we did not grant any stock options while during 2019 we granted an aggregate of 225,903 stock options. For more information about our equity-based compensation, see “Item 6. Directors, Senior Management and Employees — B. Compensation.” If our board of directors approves the issuance of new equity incentive plans (or the issuance of additional shares under the existing equity incentive plans), the interests of other shareholders may be diluted.

If securities or industry research analysts do not publish or cease publishing research or reports about our business or if they issue unfavorable commentary or downgrade our ordinary shares, our stock price and trading volume could decline.

The trading market for our ordinary shares will rely in part on the research and reports that securities and industry research analysts publish about us, our industry and our business. We do not have any control over these analysts. Our stock price and trading volumes could decline if one or more securities or industry analysts downgrade our ordinary shares, issue unfavorable commentary about us, our industry or our business, cease to cover us or fail to regularly publish reports about us, our industry or our business.

Investors may have difficulty enforcing judgments against us, our directors and management.

We are incorporated under the laws of the BVI and many of our directors and officers reside outside the United States. Moreover, many of these persons do not have significant assets in the United States. As a result, it may be difficult or impossible to effect service of process within the United States upon these persons, or to recover against us or them on judgments of U.S. courts, including judgments predicated upon the civil liability provisions of the U.S. federal securities laws.

Furthermore, our memorandum and articles of association include an exclusive jurisdiction clause pursuant to which, to the fullest extent permitted by applicable law, (i) other than claims specified in clause (ii) below and except as may otherwise be expressly agreed between the Company and a shareholder or between two or more shareholders in relation to the Company, we and all our shareholders agree that the BVI courts shall have exclusive jurisdiction to hear and determine all disputes of any kind regarding us and shareholders’ respective investments in us, irrevocably submit to the jurisdiction of the BVI courts, irrevocably waive any objection to the BVI courts being

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nominated as the forum to hear and determine any such dispute, and undertake and agree not to claim any such court is not a convenient or appropriate forum; and (ii) the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act, in each case unless our board of directors consents in writing to the selection of an alternative forum.

An award of punitive damages under a U.S. court judgment based upon U.S. federal securities laws is likely to be construed by BVI courts to be penal in nature and therefore unenforceable in the BVI. Further, no claim may be brought in the BVI against us or our directors and officers in the first instance for violation of U.S. federal securities laws because these laws have no extraterritorial application under BVI law and do not have force of law in the BVI. However, a BVI court may impose civil liability, including the possibility of monetary damages, on us or our directors and officers if the facts alleged in a complaint constitute or give rise to a cause of action under BVI law. Moreover, it is unlikely that a court in the BVI would award damages on the same basis as a foreign court if an action were brought in the BVI or that a BVI court would enforce foreign judgments if it viewed the judgment as inconsistent with BVI practice or public policy.

The courts of the BVI would not automatically enforce judgments of U.S. courts obtained in actions against us or our directors and officers, or some of the experts named herein, predicated upon the civil liability provisions of the U.S. federal securities laws, or entertain actions brought in the BVI against us or such persons predicated solely upon U.S. federal securities laws. Further, there is no treaty in effect between the United States and the BVI providing for the enforcement of judgments of U.S. courts in civil and commercial matters, and there are grounds upon which BVI courts may decline to enforce the judgments of U.S. courts. Some remedies available under the laws of U.S. jurisdictions, including remedies available under the U.S. federal securities laws, may not be allowed in the BVI courts if contrary to public policy in the BVI. Because judgments of U.S. courts are not automatically enforceable in the BVI, it may be difficult for you to recover against us or our directors and officers based upon such judgments.

Certain types of class or derivative actions generally available under U.S. law may not be available as a result of the fact that we are incorporated in the BVI and the exclusive jurisdiction clause included in our memorandum and articles of association. As a result, the rights of shareholders may be limited.

Shareholders of BVI companies may not have standing to initiate a shareholder derivative action in a court of the United States. Furthermore, our memorandum and articles of association include an exclusive jurisdiction clause which, to the fullest extent permitted by applicable law, will act as a bar to any such action in a court of the United States. In any event, the circumstances in which any such action may be brought, if at all, and the procedures and defenses that may be available in respect to any such action, may result in the rights of shareholders of a BVI company being more limited than those of shareholders of a company organized in the United States. Accordingly, shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred. The BVI courts are also unlikely to recognize or enforce against us judgments of courts in the United States based on certain liability provisions of U.S. securities law or to impose liabilities against us, in original actions brought in the BVI, based on certain liability provisions of U.S. securities laws that are penal in nature.

You may have more difficulty protecting your interests than you would as a shareholder of a U.S. corporation.

Our corporate affairs are governed by the provisions of our memorandum and articles of association, as amended and restated from time to time, and by the provisions of applicable BVI law. The rights of shareholders and the fiduciary responsibilities of our directors and officers under BVI law are not as clearly established as they would be under statutes or judicial precedents in some jurisdictions in the United States, and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate law.

These rights and responsibilities are to a large extent governed by the BVI Business Companies Act, 2004 as amended from time to time (the “BVI Act”) and the common law of the BVI. The common law of the BVI is derived in part from judicial precedent in the BVI as well as from English common law, which has persuasive, but not binding, authority on a court in the BVI. In addition, BVI law does not make a distinction between public and private companies and some of the protections and safeguards (such as statutory pre-emption rights, save to the extent expressly provided for in the memorandum and articles of association) that investors may expect to find in relation to a public company are not provided for under BVI law.

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There may be less publicly available information about us than is regularly published by or about U.S. issuers. Also, the BVI regulations governing the securities of BVI companies may not be as extensive as those in effect in the United States, and the BVI law and regulations regarding corporate governance matters may not be as protective of minority shareholders as state corporation laws in the United States. Therefore, you may have more difficulty protecting your interests in connection with actions taken by our directors and officers or our principal shareholders than you would as a shareholder of a corporation incorporated in the United States.

The laws of BVI provide limited protections for minority shareholders, so minority shareholders will not have the same options as to recourse in comparison to the United States if the shareholders are dissatisfied with the conduct of our affairs.

Under the laws of the BVI there is limited statutory protection of minority shareholders other than the provisions of the BVI Act dealing with shareholder remedies. The principal protections under BVI statutory law are derivative actions, actions brought by one or more shareholders for relief from unfair prejudice, oppression and unfair discrimination and/or to enforce the BVI Act or the memorandum and articles of association. Shareholders are entitled to have the affairs of the company conducted in accordance with the BVI Act and the memorandum and articles of association and are entitled to payment of the fair value of their respective shares upon dissenting from certain enumerated corporate transactions. For more information, see “Item 10. Additional Information — Memorandum and Articles of Association” and “Item 16G. Corporate Governance — Differences in Corporate Law” below.

There are common law rights for the protection of shareholders that may be invoked, largely dependent on English company law, since the common law of the BVI is limited. Under the general rule pursuant to English company law known as the rule in Foss v. Harbottle, a court will generally refuse to interfere with the management of a company at the insistence of a minority of its shareholders who express dissatisfaction with the conduct of the company’s affairs by the majority or the board of directors. However, every shareholder is entitled to seek to have the affairs of the company conducted properly according to law and the constitutional documents of the company. As such, if those who control the company have persistently disregarded the requirements of company law or the provisions of the company’s memorandum and articles of association, then the courts may grant relief. Generally, the areas in which the courts will intervene are the following: (i) a company is acting or proposing to act illegally or beyond the scope of its authority; (ii) the act complained of, although not beyond the scope of the authority, could only be effected if duly authorized by more than the number of votes which have actually been obtained; (iii) the individual rights of the plaintiff shareholder have been infringed or are about to be infringed; or (iv) those who control the company are perpetrating a “fraud on the minority.”

These rights may be more limited than the rights afforded to minority shareholders under the laws of states in the United States.

We have no current plans to pay any cash dividends on our ordinary shares.

We currently intend to retain our future earnings, if any, to fund the development and growth of our business. As a result, capital appreciation, if any, of our ordinary shares are likely to be your sole source of gain for the foreseeable future. Consequently, in the foreseeable future, you will likely only experience a gain from your investment in our ordinary shares if the trading price of our ordinary shares increases. While pursuant to our memorandum and articles of association our Series A Preferred Shares and Series B Preferred Shares are entitled to semi-annual dividends and quarterly dividends, respectively, our memorandum and articles of association do not require us to pay any dividends on our ordinary shares. In December 2020 we paid $0.6 million in quarterly dividends to our Series B Preferred shareholders. In March 2021 we paid $0.5 in quarterly dividends to our Series B Preferred shareholders and $8.0 million in semi-annual dividends to our Series A Preferred shareholders

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Anti-takeover provisions in our memorandum and articles of association might discourage, delay or prevent acquisition or other change of control attempts for us that you and/or other of our shareholders might consider favorable.

Certain provisions of our memorandum and articles of association may discourage, delay or prevent a change in control of our Company or management that shareholders may consider favorable, including but not limited to the following provisions:

Pursuant to our memorandum and articles of association:

• Our board of directors may without prior notice to shareholders, or obtaining any shareholder approval, amend our memorandum and articles of association to authorize and subsequently issue an unlimited number of preferred shares in one or more classes and series and designate the issue prices, rights, preferences, privileges, restrictions and terms of such preferred shares.

• Our board of directors is currently made up of eight directors divided into three classes, with each class having a three-year term. Class I’s, Class II’s and Class III’s terms will expire at the Company’s annual meetings in 2021, 2022 and 2023, respectively. The only circumstance in which shareholders can elect new directors is at an annual meeting and in respect of those board seats whose term is expiring at the annual meeting. Elections will take place by plurality voting. Shareholders do not have the power to increase or reduce the size of the board or fill a vacancy on the board, which matters are the exclusive authority of our board of directors.

• Our shareholders may only remove directors for cause and only by resolution approved by shareholders holding not less than two-thirds of the voting rights at a meeting of shareholders called for the stated purpose of removing the director.

• There are a number of restrictions, conditions and other requirements (including advance notice period requirements) that apply to our shareholders’ ability to (i) request special meetings of our shareholders; (ii) nominate persons for election as directors at annual meetings of our shareholders; and (iii) propose other items of business or other matters for consideration at any annual or special meetings of our shareholders.

• All resolutions of the shareholders must be adopted at a meeting of our shareholders convened in accordance with our memorandum and articles of association. Shareholders are prohibited from adopting resolutions by written consent.

• There are restrictions on amending our memorandum and articles of association. Certain provisions of our memorandum and articles of association (including many of the provisions described above) may only be amended with the approval of both our shareholders and our board of directors. Provisions that may be amended by the shareholders without board approval require the affirmative vote of holders of two-thirds of the shares entitled to vote on the resolution.

For more information on our Shareholder Agreements, see “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions.” For more information on our memorandum and articles of association, see “Item 10. Additional Information—Memorandum and Articles of Association” and “Item 16G. Corporate Governance—Differences in Corporate Law.”

These provisions and other provisions under BVI law could discourage, delay or prevent potential takeover attempts and other transactions involving a change in control of our Company, including actions that our shareholders may deem advantageous. As such, these provisions may reduce the price that investors might be willing to pay for our ordinary shares in the future and negatively affect the trading price of our ordinary shares.

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General Risk Factors

An active or liquid trading market for our ordinary shares may not be maintained.

An active, liquid trading market for our ordinary shares may not be maintained in the long term. Loss of liquidity could increase the price volatility of our ordinary shares. Moreover, we cannot assure you that investors will be able to sell ordinary shares should they decide to do so.

The price of our ordinary shares may fluctuate significantly and your investment may decline in value.

The price of our ordinary shares may fluctuate significantly in response to factors, many of which are beyond our control, including those described above under “—Risks Related to our Business” and “—Risks Related to Latin America.” The stock markets in general, and the shares of emerging market and technology companies in particular, have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the companies involved. We cannot assure you that any trading price or valuation will be sustained. These factors may materially and adversely affect the market price of our ordinary shares, which may limit or prevent investors from readily selling our ordinary shares and may otherwise affect liquidity, regardless of our operating performance. Market fluctuations, as well as general political and economic conditions in the markets in which we operate, such as recession or currency exchange rate fluctuations, may also adversely affect the market price of our ordinary shares. Following periods of volatility in the market price of a company’s securities, that company may often be subject to securities class-action litigation. This kind of litigation may result in substantial costs and a diversion of management’s attention and resources, which would have a material adverse effect on our business, financial condition and results of operation.

The sale or availability for sale of substantial amounts of our ordinary shares could adversely affect their market price.

Sales of substantial amounts of our ordinary shares in the public market, or the perception that such sales could occur, could adversely affect the market price of our ordinary shares, even if there is no relationship between such sales and the performance of our business.

A portion of our ordinary shares are currently held by affiliates, which means they may not be sold unless the sale is registered under the Securities Act, other than if an exemption from registration is available. Certain of our shareholders have demand and/or other piggyback registration rights which may enable them to sell some or all of their ordinary shares in a public offering in the United States registered under the Securities Act. For more information, see “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions.”

ITEM 4 INFORMATION ON THE COMPANY

A. History and Development of the Company

Despegar.com, Corp. was formed as a business company incorporated in the BVI on February 10, 2017. On May 3, 2017, the stockholders of our predecessor, Decolar.com, Inc., a Delaware corporation, exchanged their shares for ordinary shares of Despegar.com, Corp. to create a BVI holding company. Following the exchange, our shareholders own shares of Despegar.com, Corp., and Decolar.com, Inc. is a wholly-owned subsidiary of Despegar.com, Corp.

We are known by our two brands, Despegar, our global brand, and Decolar, our Brazilian brand. The key brands for Best Day, which we acquired in October 2020, are Best Day, BD Experience and HotelDo.

Our principal executive office is located at Juana Manso 1069, Floor 5, Ciudad Autónoma de Buenos Aires, Argentina C1107CBU, Telephone: +54 11 5171-3500. Our agent for service of process in the United States is Cogency Global Inc., located at 10 E. 40th Street, 10th Floor, New York, New York 10016.

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Our History and Development

Our business has grown substantially in revenue, products and geographic scope since launching in 1999. The following table shows the timeline of key milestones:

1999	•  Launched site in Argentina.
2000	•  Launched sites in Brazil, Chile, Colombia, Mexico and Uruguay.
2001	•  Launched sites in the United States and Venezuela.
2007	•  Launched site in Peru.
2009	•  Expanded our offering to include hotels.
	•  Launched sites in Bolivia, Costa Rica, Dominican Republic, Ecuador, Guatemala, Nicaragua, Panama, Paraguay and Puerto Rico.
2010	•  Launched sites in El Salvador and Honduras, reaching our 20th market.
	•  Cumulative one million travel customers served.
2012	•  Launched our mobile apps on Android and iOS.
	•  Expanded offering to include packages, rental cars and cruise products.
2013	•  Reached one million downloads of our mobile app.
	•  Expanded our offering to include destination services.
	•  Expanded hotel offering to include vacation rentals.
2014	•  Cumulative 10 million travel customers served.
	•  Our mobile app is included in the iTunes Store’s “Best of 2014”.
	•  Launched travel affiliates program.
	•  Expanded our offering to include travel insurance and travel assistance.
2015	•  Reached 10 million downloads of our mobile app.
	•  Deepened strategic partnership with Expedia, including its equity investment in our Company.
2016	•  Awarded “E-commerce Leader in the Tourism Industry in LATAM” by the Latin American E-Commerce Institute.
	•  Expanded our offering to include our bus product.
	•  Expanded our destination services offering to include our local concierge product.
2017	•  Initial public offering and listing on the New York Stock Exchange.

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2018	•  Launched sales call centers in Peru, Ecuador, Mexico, Chile, Colombia, Argentina and Brazil. •  Developed tour operation business.
2019	•  Completed rebranding our core business, including logos, website and images in order to update our outward facing content. •  Acquired Viajes Falabella in Chile, Argentina, Peru and Colombia. •  Entered into an API connectivity agreement with CTrip International Travel (Hong Kong) Ltd., for the integration of Despegar direct lodging offering in Latin America with Ctrip’s platform. •  Entered into a ten-year exclusive agreement with Industrial and Commercial Bank of China Limited, to launch a co-branded credit card in Argentina in partnership with Mastercard.
2020	•  Acquired Best Day, a leading travel agency in Mexico. •  Acquired Koin, an online payment platform in Brazil. •  Launched a co-branded credit card in Brazil jointly with Banco Santander. •  Entered into a ten-year commercial partnership agreement with Tarjeta Naranja, the leading branded proprietary credit card issuer in Argentina and a subsidiary of Grupo Financiero Galicia. •  Entered into an Investment Agreement for the issuance 150,000 Series A Preferred Shares of the Company and warrants to purchase 11,000,000 ordinary shares of the Company at an exercise price of $0.01 per share (the “Warrants”) with LCLA Daylight LP, an affiliate of L Catterton Latin America III, L.P. •  Entered into an Investment Agreement for the issuance of 50,000 Series B Preferred Shares to Waha LATAM Investments Limited, an affiliate of Waha Capital PJS.

Capital Expenditures

See “Item 5. Operating and Financial Review and Prospects—C. Research and Development, Patents and Licenses.”

B. Business Overview

Overview

We are the leading online travel company in Latin America, mainly known by our two brands, Despegar, our global brand, and Decolar, our Brazilian brand. In Mexico we are best known by our brands Best Day, BD Experience and HotelDo, which we acquired in October 2020.

We have a comprehensive product offering, including airline tickets, packages, hotels and other travel-related products, which enables consumers to find, compare, plan and purchase travel products easily through our marketplace. We provide our network of travel suppliers a technology platform for managing the distribution of their travel products and access to our travel customers. We believe that our focus on the underpenetrated Latin American online travel market, our knowledge of the consumer and supplier landscape in the region and our ability to manage the business successfully through economic cycles will allow us to continue our industry leadership. In 2020, 2019 and 2018, we had approximately 2.5 million, 5.2 million and 5.3 million travel customers, generating $131.3 million, $524.9 million and $530.6 million in consolidated revenue, respectively. Our gross bookings were $1.4 billion, $4.7 billion and $4.7 billion during 2020, 2019 and 2018, respectively. Results for 2020 have been significantly impacted by COVID-19’s effects on global travel.

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Latin America online travel bookings are expected to continue growing in the coming years, once the effects of the COVID-19 pandemic have subsided. Factors driving the growth in online travel bookings include the increase of internet penetration, further adoption of smartphones, tablets and other mobile devices and a growing middle class with greater access to banking services and credit products, together enabling a larger segment of the growing population to transact online or on mobile devices.

The Latin American travel industry is characterized by significant fragmentation in suppliers across airlines, hotels and other travel products. This fragmentation is compounded by regional complexities, including differences in language, local customs, travel preferences, currencies and regulatory regimes across the more than 40 countries in the region. These factors create challenges for suppliers to reach customers directly and, consequently, create a significant market opportunity for us.

We believe we have the broadest travel portfolio among OTAs in Latin America, with inventory from global suppliers, including over 238 airlines and over 660,000 hotels, as well as approximately 1,260 car rental agencies and approximately 800 destination services suppliers with more than 12,000 activities. Our business benefits from network effects: our large travel customer base helps us to attract additional travel suppliers and, in turn, a larger network of travel suppliers helps us to attract new travel customers by enhancing our product offering. Additionally, as we continue to grow our marketplace, we are increasingly able to offer more competitive pricing and product availability to our travel customers as well as enhance the effectiveness of our marketing strategy.

We launched our award-winning mobile travel app in 2012 and it is an increasingly important part of our business, as it allows consumers to access and browse our real-time inventory, compare prices and transact through their mobile devices quickly. As of December 31, 2020, our apps have approximately 60 million cumulative downloads from the iOS App Store and Google Play, 16.5 million of which were downloaded in the last two years, and we believe they are the most downloaded OTA apps in Latin America. During each of 2020 and 2019, mobile accounted for approximately 60% of all of our user visits, and approximately 46% and 39%, respectively, of our transactions were purchased on our mobile platform, complementing our desktop website traffic. As internet, smartphone and other mobile device penetration continue to increase, we believe that our strength in mobile will continue to be a strategic advantage.

Through mobile and online marketing, brand promotion and cross-marketing, we have created strong brand recognition among Latin America travelers, which we view as one of our key competitive advantages. To date, we have invested more than $1.5 billion in marketing and branding initiatives promoting our brand, which we believe, combined with the quality of the service we have delivered over the years, has made us a trusted brand with our travel customers. In 2020 and 2019, 65% and 64% of our travel customers had completed previous purchases on our platform, respectively.

Travel Market Opportunity in Latin America

Latin America is one of the largest and most diverse regions in the world. Comprised of over 40 countries with a total population of over 600 million, the region encompasses multiple languages, currencies and regulatory regimes. The travel market serving Latin American consumers presents a significant opportunity for us due to its large market size, highly fragmented base of travel suppliers and rapid growth in the adoption of technology-based solutions for consumers and travel suppliers. In addition, long-term favorable macroeconomic trends in the region have contributed to the expansion of the middle class and increased consumption in the region.

In the second quarter of 2020, the travel market in Latin America –as in other parts of the world– came to a complete halt as a consequence of the ongoing COVID-19 pandemic and governments’ measures to limit the spread of the virus. Governments around the world, including in Latin America, have imposed travel restrictions and bans, closed borders, established restrictions on public gatherings, instructed residents to practice social distancing, required closure of non-essential businesses, issued stay at home advisories and orders, implemented quarantines and similar actions. The degree of containment of the virus, and the recovery in travel, has varied country by country. During the recovery period, there have been instances where cases of COVID-19 have started to increase

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again after a period of decline, which in some cases impacted the recovery of travel in certain countries. While many countries have begun the process of vaccinating their residents against COVID-19, the large scale and challenging logistics of distributing the vaccines, as well as uncertainty over the efficacy of the vaccine against new variants of the virus, may contribute to delays in economic recovery. COVID-19 has also had broader economic impacts, including an increase in unemployment levels and reduction in economic activity, which could lead to recession and further reduction in consumer or business spending on travel activities, which may negatively impact the timing and level of a recovery in travel demand.

While it is impossible to predict at this moment how the travel industry, globally and in Latin America, will ultimately be impacted, we believe that the Latin American travel industry will continue to grow, and the following trends will largely continue in the longer term, once the effects of COVID-19 pandemic have subsided.

Overview of Suppliers in the Latin American Travel Industry

The Latin American travel industry is characterized by significant supplier fragmentation across airlines, hotels and other travel products. Regional complexities, including differences in language, local customs, travel preferences, currencies and regulatory regimes across the more than 40 countries in the region create challenges for travel suppliers to reach travel customers directly, at scale and across the region. Further driving this fragmentation is the growing number of smaller airlines, including low-cost airlines that have been commencing operation in recent years. Today, travel agencies are the leading distribution channel in the region for airlines, due to their ability to provide greater selection and scale across the region.

We believe that due to a lack of scale or unified brand, other travel services in Latin America tend to be even more fragmented, operating in specific cities or countries.

Trends Driving Online Travel and Our Growth

An expanding and evolving travel market, coupled with greater internet, smartphone and other mobile device penetration, is expected to drive robust growth in online travel bookings in Latin America. As consumers shift to researching and booking travel online, travel suppliers have adapted their offerings and deepened their relationships with online marketing and booking channels, such as OTAs, to generate revenue. OTAs provide travel suppliers with scale and distribution into new and existing markets and 24/7 customer service and localization services, including language and payment capabilities.

Factors driving the growth in online travel include:

• Increasing internet penetration. While internet penetration in Latin America has increased, we believe it has substantial room for growth. As internet penetration increases, Latin American consumers are increasingly using the internet to research and purchase products, including travel.

• Increasing adoption of mobile devices, including smartphones. The use of mobile devices in Latin America is expected to continue to grow. With the proliferation of smartphones and tablets, mobile has become a prominent tool for travelers to search, discover and purchase travel services.

• Superior user experience. Online travel booking channels, which include websites and mobile apps, empower travelers to search products and user-generated reviews and easily compare real-time availability and pricing options from multiple travel providers simultaneously, which we believe leads to higher user engagement and customer conversion.

• Growth in banked consumers and proliferation of credit products. With the continued development of the Latin American economy, a larger portion of the population has opened bank accounts, enabling access to new forms of payments including credit cards and other financial products. With the increased number of consumers with bank and credit card accounts, more people have the ability to make purchases online. Access to bank accounts and credit cards also gives consumers access to additional financing options from banks, such as payment by installments.

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As the leading OTA in Latin America, we believe we are well positioned to succeed as consumers’ destination of choice for fast, easily searchable and more transparent travel research and shopping. As our market share grows, we are increasingly able to capture significant amounts of customer data including travel history and preferences and serve personalized recommendations to drive higher customer conversion. Additionally, we are able to provide better pricing through scale and by bundling multiple travel products together in a single offer.

Our Competitive Strengths

We are the leading OTA in Latin America, offering our travel customers a broad and diversified selection of travel products at attractive prices. Our leadership position is a result of our following core strengths:

Industry Leader in Latin America

With our launch in 1999, we have benefited from an early mover advantage in Latin America, which has allowed us to achieve significant scale and brand awareness. In 2020 and 2019, we had approximately 2.5 million and 5.2 million travel customers, respectively, primarily in Latin America, generating $131.3 million and $524.9 million in revenue and approximately $4.7 billion and 1.4 billion in gross bookings in 2019 and 2020.

We have established relationships with a large network of travel suppliers in Latin America and we have become the leading online air ticketing provider in Latin America, having sold approximately 19.6% and 18.9% of all airline tickets purchased through GDS in the region during 2020 and 2019, respectively, according to Amadeus. Additionally, we believe we provide our travel customers with the largest travel portfolio among Latin American OTAs, with access to over 238 global airlines and over 660,000 hotels globally as well as approximately 1,260 car rental agencies and approximately 800 destination services suppliers with more than 12,000 activities. Additionally, we have accumulated approximately 17.6 million user-generated reviews in total as of December 31, 2020, of which 0.4 million and 2.3 million were submitted in 2020 and 2019, respectively, which we believe drive user engagement. Our platform is also of increasing importance to airlines based outside of Latin America, which generally have a limited local presence in the region, and which account for over 68% of the outbound international travel booked on our platform. Such international travel is more attractive because of its price point and higher commission structure.

Our technology platform allows us to offer our travel customers the ability to create custom packages of two or more products, such as a combination of airfare and a hotel booking for a particular trip, allowing us to offer our travel customers lower combined prices that may not be available for individual products. We are also able to better cross-sell multiple travel products and provide travel customers with a comprehensive solution for their travel needs.

We benefit from network effects: our large travel customer base helps us to attract additional travel suppliers and, in turn, a larger network of travel suppliers helps us to attract new travel customers by enhancing our product offering. Furthermore, by growing our user base and aggregating different products from our supplier base, we are able to offer attractive pricing and availability of travel products to our travel customers as well as enhance the effectiveness of our marketing strategy.

Strong Brand Recognition and Awareness

Despegar, our global brand, and Decolar, our Brazilian brand, have leading brand awareness in online travel in key markets, including Brazil and Argentina. Best Day, which we acquired in October 2020, has a leading brand awareness in Mexico. According to search engine trend data that is based on the relative number of searches of brand related keywords on Google during 2020, we had an approximate 28% share (as compared with what we believe to be the next five largest competitors in the market) in Latin America.

Local Market Expertise and Leadership

We have a strong track record in Latin America, with a point of sale in 19 markets, representing 98% of the region’s population, and with a leading OTA presence in key markets such as Brazil, Mexico, Argentina, Chile, and Colombia. In our three largest markets, Brazil, Mexico and Argentina, we have operated for more than 20 years. Our knowledge of local consumers, and their buying patterns and travel preferences, as well as our ability to offer

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financing through our relationships with financial institutions, have enabled us to serve our travel customers more effectively than global competitors from outside the region. Furthermore, our extensive supplier relationships allow us to offer a greater scale and breadth of offerings than smaller, local competitors. We understand the objectives of, and challenges faced by, Latin American travel suppliers and we are well-positioned to address those challenges by helping the travel suppliers grow their businesses, all to the benefit of travel customers who receive more choice at attractive pricing.

As the leading Latin American OTA, we have developed long-standing relationships with a wide range of local banks to offer installment payment plans to their credit card holders as an alternative purchase option. We believe that local banks look to partner with us because of our scale, access to our online audience and high transaction volume. We believe this differentiates us from other local and global travel agencies as those agencies either do not offer installment plans or offer installment plans from a more limited selection of financing providers or in a more limited selection of countries. We believe our portfolio of installment plans is a meaningful driver of traffic to our platform as well as conversion. Approximately 57% of our transactions in both 2019 and 2020 were paid in installments. Our agreements with local banks allow us to offer installment plans without assuming collection risk from the travel customer.

Leading Mobile Offering

Mobile is an increasingly important part of our business, as consumers are quickly able to access and browse our real-time travel offerings, compare prices and make purchases through their mobile devices. We launched our leading mobile travel apps in 2012. As of December 31, 2020, our mobile apps have more than 60.1 million cumulative downloads from the iOS App Store and Google Play (16.5 million of which were downloaded in the last two years). In addition, our iOS App Store and Google Play apps were rated 4.7 and 4.0 stars as of December 31, 2020. During each of 2020 and 2019, mobile, which includes both mobile web and our mobile apps, accounted for approximately 60% of all of our user visits, and approximately 45% and 39%, respectively, of our transactions. In addition, transactions via mobile decreased by approximately 50% in 2020 compared to 2019, mainly as a result of a general decrease in transactions as a result of the COVID-19 pandemic. We continue to provide innovative features and functionality to consumers through our mobile apps, including push notifications, dynamic updates, inventory alerts and personalized promotions as well as in-app customer service. Our travel customers using mobile devices have historically made more repeat transactions than travel customers using desktop computers. Additionally, our mobile presence allows in-destination marketing, which facilitates cross-selling of additional travel products, such as rental cars and destination services to travel customers, after they have arrived at their destination.

Many of our travel customers use their mobile device to search for travel products but complete their transactions on their desktop. However, as mobile purchasing becomes increasingly prevalent in the region, we believe our award-winning mobile platform, coupled with the widespread adoption of our apps, positions us well for an increasingly mobile future.

Powerful Data and Analytics Platform

Our large web and mobile audience and transaction volume generate a significant amount of data that allows us to better understand our travel customers and provide personalized travel offerings and also helps us to drive our sales, marketing and operational strategy. To offer the most effective content and products for each travel customer, we extensively analyze the data we collect to identify and highlight the most valuable products and destinations in each travel customer interaction. By gathering and analyzing data in real-time, we are quickly able to assess and react to changes in travel customer behavior, market pricing and other market dynamics. Currently, the majority of visitors to our platform see a personalized landing page based on such factors as user account information, past search and purchasing history and geolocation. We believe that this personalization of the user experience increases engagement and likelihood of purchase.

Effective Marketing Capabilities

We have invested significant resources in our marketing team, which we believe is a significant driver of our business. Through our vertically-integrated, in-house marketing team, we are able to control all aspects of our

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budget, marketing campaigns and market analytics, without the need for agencies or external consultants. Our marketing team’s local knowledge and expertise in our key markets have allowed us to develop direct relationships with a broad range of local and regional media providers and purchase media directly, avoiding more costly intermediaries. We have invested in our own creative, production and media execution teams, who are quickly able to adapt our marketing strategy, while also leveraging our extensive data and analytics capabilities for more precise audience targeting. Furthermore, we have developed our own software platform for managing our search optimization capabilities, allowing us to tailor messages effectively for specific target markets and travel customers.

Proven and Experienced Team

Our management team has significant experience in the travel sector and across a variety of industries in Latin America. Members of our management team have worked at organizations such as LATAM Airlines, McKinsey, Morgan Stanley, PwC and Thales, among others. In addition to our management team, we have an extensive technology team including more than 650 developers and technology professionals. By fostering a distinctive, collaborative and high-performance working culture, we attract software developers with world-class talent and offer an engaging working environment for ongoing career development. We believe we are perceived as a top talent recruiter for IT professionals in Latin America, allowing us to attract the highest quality professionals and specialists dedicated to the enhancement of our platform.

Our Travel Customers

We had approximately 2.5 million and 5.2 million travel customers for 2020 and 2019, respectively, primarily in Latin America. Our travel customers are primarily from Latin America traveling domestically within their own country of origin, to other countries in the Latin American region, and outside of Latin America. Most of our travel customers are traveling for leisure, although we do have some independent business travelers as well.

Our Products

We offer a wide range of travel and travel-related products catering to the needs of Latin Americans traveling domestically within their own country of origin, to other countries in the Latin American region and outside of Latin America. We provide these travelers with the comprehensive tools and information, in multiple languages, that they need to research, plan, book and purchase travel products efficiently. That information includes approximately 5.0 million user-generated reviews over the last three years ended December 31, 2020, of which 0.4 million and 2.3 million were submitted in 2020 and 2019, respectively. We organize our business into two segments: (1) Air, which consists of the sale of airline tickets, and (2) Packages, Hotels and Other Travel Products, which consists of travel packages (which can include airline tickets and hotel rooms), as well as stand-alone sales of hotel rooms (including vacation rentals), car rentals, bus tickets, cruise tickets, travel insurance and destination services. We mostly offer our products online through our website and mobile applications, and use data and analytics to personalize the travel customer experience on our platform, based on geolocation, past search and purchasing history and social network interactions, which we believe increases engagement and likelihood of purchase.

Air

Through our Air segment, we offer airline tickets, primarily targeted at leisure travelers in Latin America, including travel domestically, to other countries in the region and outside of Latin America. Our Air segment includes airline tickets purchased on a stand-alone basis but excludes airline tickets that are packaged with other non-airline flight products. Our travel customers booked approximately 2.4 million, 6.2 million and 5.9 million transactions in our Air segment using our platform in 2020, 2019 and 2018, respectively.

We provide our travel customers with access to over 238 full service and low-cost airlines. We obtain inventory from these airlines either through a GDS or, primarily in the case of low-cost airlines, via direct connections to the airlines’ booking systems. We believe our platform provides comprehensive information to our travel customers in a time efficient and transparent manner. Travel customers are quickly and easily able to evaluate a broad range of fares and airline combinations, and may search for flights based on their preferred travel dates, destinations, number of passengers, number of stops and class of travel, or they may use our more advanced search tool and include additional search parameters. Travel customers can also filter and sort the results of their search easily according to their preferences.

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Packages, Hotels and Other Travel Products

The total number of transactions in our Packages, Hotels and Other Travel Products segment was 1.7 million, 4.4 million and 4.5 million in 2020, 2019 and 2018, respectively.

Packages

We offer travelers the opportunity to create custom packages by combining two or more travel products, such as airline tickets and hotel, airline tickets and car rental or hotel and car rental, and booking them in a single transaction. Combining multiple products into a package with a single quoted price allows us to offer travel customers lower prices than are available for individual products and helps us to cross-sell multiple products in a single transaction.

Hotels

Through our platform, travel customers can search, compare and book reservations at more than 660,000 hotels globally through our direct network and third-party inventory. In addition, since 2013 our hotels offering includes vacation rentals.

Travel customers may search for hotels based on their destination and preferred dates for check-in and checkout, and may filter and sort our search results easily by selecting star ratings, specific hotel chains and location.

Travel customers can also indicate amenity preferences such as business services, internet access, fitness centers, swimming pools and more. Travel customers can also view hotel pictures and read hotel reviews from other travel customers on our platform. Our platform features approximately 5.0 million user-generated reviews over the last three years ended December 31, 2020, of which 0.4 million and 2.3 million were generated in 2020 and 2019, respectively.

As of December 31, 2020, approximately 31,000 of our hotel suppliers in Latin America were directly connected to our booking system. Through these direct connections, our hotel suppliers allocate rooms to us either by managing their room inventory directly on an extranet supported by us, or on an extranet supported by one of our more than 48 third-party channel managers.

In 2020 and 2019, 6.2% and 8.4%, respectively, of our gross bookings were attributable to supply provided to us by affiliates of Expedia. Expedia, the beneficial owner of 13.67% of our ordinary shares outstanding as of December 31, 2020, holds certain rights in its capacity as a shareholder. For more information on our relationship with Expedia, see “Item 7. Major Shareholders and Related Party Transactions — B. Related Party — Relationship with Expedia” for more information.

We typically do not assume inventory risk as we do not pre-purchase hotel room inventory from our hotel suppliers. Hotel suppliers are paid by one of two methods: “pre-pay” and “pay-at-destination.” Under the pre-pay model, our travel customer pays us at the time of booking, and we pay our hotel suppliers after the travel customer checks out. Under the pay-at-destination model, the travel customer pays the hotel directly at checkout and we either receive our commission later from the hotel suppliers or from the travel customer, at the time of booking. For the year ended December 31, 2020, 87% of the hotels booked in our platform were under the pre-pay model and 13% under the pay-at-destination model.

Other Travel Products

We also offer other travel products on our platform. We provide our travel customers access to approximately 1,260 car rental agencies, more than 180 bus carriers, six cruise carriers, approximately 850 destination services, suppliers with more than 12,000 activities, and one travel insurance supplier. While we offer both pre-pay and pay-at-destination options for car rentals, the other travel products that we offer must be prepaid.

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Destination Services: As from October 2020 with the closing of the Best Day acquisition, we offer a wide range of in-destination services as an opportunity for us to offer attractions, tickets, tours and activities and local concierge services to package with other products and as a way to encourage in-destination transactions. The wide array of options offered is intended to suit varying budgets and preferences of potential travel customers.

Car Rentals: Currently, we offer car rentals worldwide, with a focus in Latin America and the United States.

Cruise Tickets: As from July 2020, as a consequence of the COVID-19 pandemic we are not currently offering cruise tickets. Prior to July 2020 we offered cruise tickets to travel customers in Argentina, Brazil, Chile, Colombia and Mexico and had relationships with six cruise carriers.

Travel Insurance: We offer travel insurance through a third-party provider in Latin America, Universal Assistance Card, with whom we entered into an exclusivity agreement in 2021. Travel customers can choose from a range of coverage options depending on their particular needs, such as medical insurance and lost or damaged baggage. Typically, this product is requested in conjunction with a flight and hotel booking. Prior to confirming and proceeding with the reservation of and payment for a flight or hotel booking or a package booking, our travel customers are offered the opportunity to purchase travel insurance.

Bus Tickets: As from July 2020, as a consequence of the COVID-19 pandemic we are not currently offering bus tickets. Prior to July 2020 we offered bus tickets in Brazil, Mexico, Argentina, and Chile and had relationships with suppliers that gave us access to more than 180 bus carriers.

Payment Options

Credit cards are the primary means of payment for products on our platform. We allow for the use of more than one credit card in a single transaction, permitting travel customers with lower credit limits to make larger purchases. We also offer other payment alternatives including debit cards as well as several localized payment options available in the markets in which we operate.

We generally partner with banking institutions to allow our travelers the possibility of purchasing the product of their choice through financing plans established, offered and administered by the banks, which we believe differentiates us from other global travel agencies which either do not offer installment plans or offer them from a more limited selection of financing providers or in a more limited selection of countries. Local banks look to partner with us because of our scale, access to our online audience and high transaction volume. Credit card travel customers may choose from a range of installment plan offerings and terms from different financial institutions with which the travel customer holds or obtains a credit card. Many of these installment plan offerings are interest-free to the travel customer. Installment plans allow travel customers to make larger purchases than they may otherwise be able to make in a single payment.

Banks bear risk of fraud, delinquency or default by travelers. When travelers elect to finance their purchases, we typically receive full payment for our services within a short period of time after booking is completed and confirmed, regardless of the payment plan selected by the traveler. However, in certain countries, we receive payment from the bank as installments become due regardless of when traveler actually makes the scheduled payments. In most cases, we receive payment before or during travel occurs and the period between completion of booking and reception of scheduled payments is one year or less. Beginning in August 2020, through our subsidiary, Koin, we began providing financing to certain risk-profiled travelers only in Brazil. This activity has been very limited to date.

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Marketing and Affiliates

Marketing

We execute a multi-channel marketing strategy. Through this effort, we have created a long-standing brand that is associated with superior travel products, high quality services and competitive prices in Latin America. We have an experienced in-house marketing team dedicated to delivering efficient allocation of time and resources across media channels, without relying on outside agencies or consultants. Key elements of our marketing strategy include:

In-house Teams. We have teams dedicated to: audiovisual content generation across online and offline channels; negotiation with media and agencies to control budget; performance trends and market analysis through strong data analytics; and targeted campaign monitoring.

Buy Direct. Through our direct relationships with key media suppliers throughout Latin America, we believe we are able to secure highly competitive rates across the region, without unnecessary interaction with intermediaries.

“Always On” Strategy. We have 24/7 continuity of marketing campaigns through a combination of online, television, radio, print and other channels tailored for every country and market. We run campaigns to drive maximum awareness, and we use a multi-channel approach in our top markets.

Cross-Device Insights and Custom Attribution Model and Bidding Tools. We measure marketing success across all media channels and devices by reconstructing the user’s marketing path across devices and applying our custom attribution model that feeds our optimization strategy. We have also developed proprietary tools to optimize our investment in search engine marketing (“SEM”) campaigns for Google AdWords by tracking sources of traffic and attributing a percentage of conversions to each event in a user’s marketing path.

Focus on Efficient Use of Media. We continuously analyze the minimum frequency needed on each media channel to deliver targeted marketing messages, events and promotions to travel customers based on the specific demographics of each market.

Promotions and Sales. We focus aggressively on promotions including discounts, holiday campaigns and financing options. Our technology-driven marketing allows us to dynamically optimize promotions on a daily basis.

Affiliates

We have relationships with a network of over 7,000 affiliates, including travel agents, airlines, websites and other third parties such as online and offline retailers, in seven countries across Latin America. Our agreements with these affiliates allow them to access our product inventory directly through our platform or through our application program interface (“API”). We believe our affiliate program is attractive because we provide access to a range of travel products that our affiliates otherwise may not be able to access cost-effectively or at all. Our affiliates earn commissions from us depending on country and type of products sold. Furthermore, our affiliate program allows us to expand our footprint in Latin America and distribution network in a cost-effective manner.

Sales Call Centers

In 2018, we launched call center operations through third parties in Peru, Ecuador, Mexico, Colombia, Chile, Argentina and Brazil. Through these call centers we sell all our products, with the exception of buses, cruise lines and vacation rentals. We included our sales call number on the homepage of each website. This complements our online platform, helping us to gain new travel customers and interact with those who might not be digitally enabled. We currently have call center operations for our Despegar, Decolar, Best Day and Viajes Falabella. As part of our cost savings program in connection with the Covid-19 pandemic, since March 2020 we reduced our call center operations.

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Acquisition of Viajes Falabella

On June 7, 2019, we completed the acquisition of Viajes Falabella in Argentina, Peru and Chile, and on July 31, 2019 we completed the acquisition of Viajes Falabella in Colombia, for a total consideration of $23 million. Of this total consideration, we have paid $17.2 million, and the remaining $5.7 million will be paid in June 2021. Concurrent with the acquisition, we entered into a 10-year commercial agreement with Grupo Falabella which provides for several marketing and promotional activities, and other activities to promote future business, including the license for the “Viajes Falabella” brand name, for which we paid $2 million in June 2019, $1 million in June 2020 and $1 million will be paid in June 2021. The license for the ‘Viajes Falabella’ brand name is for an initial period of four years and is renewable for one-year periods thereafter at our option, for a pre-agreed price, provided that we meet a service standard set forth under the contract.

The acquisition of Viajes Falabella provides travel customers of both companies with access to an enhanced travel and tourism product and service offerings, wherever and however they want to book travel (mobile, online, apps, call center and store-within-store locations). This includes air, hotel and insurance travel packages, as well as significant non-air travel offerings. In addition, travel customers are able to access exclusive discounts, earn double CMR Points Falabella’s loyalty program, both at Viajes Falabella and Despegar, as well as an expanded product offering in exchange for CMR Points at Viajes Falabella. Following the acquisition of Viajes Falabella, as of December 31, 2020 we operated 85 sales travel locations in Chile, Argentina, Peru and Colombia.

Acquisition of Best Day

On January 27, 2020, we entered into an agreement to acquire Best Day, a leading travel agency in Mexico, with business in Argentina, Colombia, Brazil, Uruguay, the Dominican Republic and the United States, subject to the occurrence of certain closing and business conditions. The agreement was amended on June 11, 2020 and again on September 9, 2020. The acquisition was completed on October 1, 2020. The purchase price was fixed at $10.3 million, after application of net indebtedness and working capital adjustments, and will be payable in cash on October 1, 2023. In addition, the agreement provides for an earnout for the benefit of certain sellers ranging from $0 to $20 million, based solely on the performance of our share price during a measurement period of six months prior to the fourth anniversary of the closing date. The earnout, if any, will be payable in cash on October 1, 2024.

Viajes Beda primarily operates in Mexico and to a lesser extent in South America, including Argentina, Brazil and Uruguay among others, and the United States. Transporturist primarily operates in Mexico. Best Day primarily provides travelers with several product offerings, including airline tickets, packages, hotels and other travel-related products, through its online platforms, call centers and offline presence, and provides travel suppliers a technology platform for managing the distribution of their travel products and access to traveler customers. The Best Day also provides ground transportation services and group tours to travelers principally across the main tourist destinations in Mexico and the Dominican Republic. Best Day offers these travel products and services through its brands “Best Day” and “BD Experience”. In addition, the Best Day offers hotel inventory, as well as transfers, activities, car rental, packages and tours to travel agencies through its tradename “HotelDo,” a leading hotel wholesale aggregator in Mexico and Latin America. Best Day also provides white label services for major travel vendors, including over 70 partnerships with key players in the travel industry—airlines, hotels, retails stores and banks.

We believe that we will be able to benefit from Best Day’s brand recognition in Mexico and synergies resulting from the combination of our businesses and technology platforms. We have already migrated Best Day’s online B2C business into our platform, which is more robust than Best Day’s prior platform from a performance, conversion, fraud, errors and marketing perspective. Our increased size and presence in Mexico has also allowed us to obtain better terms from suppliers in Mexico and has made us a more attractive partner for suppliers to work with. We believe we will be able to obtain further synergies as we further integrate Best Day into our business, in particular with respect to synergies related to marketing and general and administrative expenses, expansion of in-destination products to other countries and cross-selling of in-destination products currently provided by Best Day to current customers.

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Acquisition of Koin

On August 20, 2020, we completed the acquisition of an 84% equity interest in Koin. Koin is a payment fintech which offers a financing solution to merchants’ customers, predominantly in the travel sector in Brazil. We effected the acquisition through the conversion of an outstanding trade receivable we had with Koin for $1.0 million as of the acquisition date. The former owners remained as non-controlling shareholders of a 16% equity interest in Koin.

As part of the acquisition, we and the non-controlling shareholders entered into a Shareholders’ Agreement under which we have a call option to purchase the non-controlling interest during a period of 36 months as from the acquisition date at a fixed price of $4.3 million. In addition, the non-controlling shareholders have a put option to sell their shares back to us during a period commencing on February 20, 2022 and ending August 21, 2023 at a fixed price of $2.9 million.

Customer Service

Customer experience is a key focus for our business and we believe this is reflected in our strong brand recognition and loyalty throughout Latin America. We emphasize providing personalized support throughout the customer purchase cycle, including automated web-based support and support from live customer service representatives.

In addition to our customer service centers in Brazil and Colombia, we rely on outsourced services to provide 24/7 support to our customers for issues that cannot be resolved through our platform. To control expenditures related to customer support, we also outsource certain functions to international call center service providers. These outsourced customer service providers support our internal call center operations and improve our ability to support travel customers around the world.

We also have implemented comprehensive performance measures to monitor our calls to ensure that our travel customers receive quality service. In addition, as a part of our customer experience we maintain a database containing travel customer transactions and user preferences for each travel customer who has booked services through us in order to provide customized support and offerings in the future. We believe that the design of our existing systems can scale to meet further increases in call volume.

In addition, during 2018 we implemented a service button on our mobile app which enables travel customers to reach our Company no matter where they are via VOIP (Voice over Internet Protocol) or WI-FI, at no cost.

As a result of our efforts we managed to increase our post-trip net promoter score (“NPS”) 110 basis points, up to 67.4 % during 2019, with a reduction to 59.1% during 2020.

Revenue Management

From an organizational perspective, we have consolidated revenue management, marketing and product development efforts under the umbrella of our Commercial Direction. This new structure allows us to work in a more coordinated fashion and to improve our attribution model. This newly launched attribution model includes the development of new tools and testing capabilities that allow us to enhance spending allocation and direct investments to pull the levers that are most profitable to us.

Technology and Data

We use our technology platform to improve the travel customer experience and optimize the efficiency of our business operations. We have successfully built an innovative technology culture that we believe is unique in Latin America and enables us to attract and retain some of the best talent in the region. We employ more than 650 dedicated technology professionals. We actively recruit and train these highly-skilled technology professionals and many of our current technology managers started in our training program. Given the market demand for technology professionals, we have implemented a series of incentive to retain our highly-skilled technology professionals.

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We own our technology platform, which is comprised of applications that we develop in-house using primarily open source software. Our technology team has adopted a continuous improvement, high-frequency testing approach to our business, aimed at improving both traffic and conversion rates, while maintaining reliability.

Our platform is engineered to provide a personalized and secure experience to our travel customers. We invest heavily in understanding our travel customers’ behavior and intentions through a combination of detailed behavioral data collection and machine learning algorithms. Our machine learning algorithms also help us detect fraud attempts. We collect, maintain and analyze behavioral data from all the devices our travel customers are using to interact with our platform. The insights derived from the analysis of this data form the basis of our enhanced conversion strategies. We use email, social media marketing and retargeting campaigns to remind travel customers of their searches.

We believe our technology can scale to accommodate significantly higher volumes of site traffic, customers, bookings and the overall growth in our business. We routinely test and expand the capacity of our servers so we are prepared to provide our travel customers with uninterrupted access to our sites during periods with high levels of user traffic, such as when we are offering promotions. Our information technology platform employs a horizontal architecture, which allows us to increase our processing capacity by adding more hardware in parallel with our existing servers. With this structure, we can grow our platform to accommodate the growth of our business with minimal disruption to the operation of our customer-facing platform and without having to replace our existing equipment.

Our system has been designed around an open architecture with a focus on robust reliability to reduce downtime in the event of outages or catastrophic occurrences. Our platform provides 24/7 availability, except during twice-monthly planned maintenance periods. Our system hardware, which we own, is hosted by a third-party data center in Miami, Florida, which also provides redundant communications lines and emergency power backup.

We believe our technology infrastructure is an important asset due to its robustness, cost-effectiveness and scalability. We continuously evaluate, research and develop new services, platforms infrastructure, and software to improve and solidify our technological systems further and provide a reliable, personalized, fast and secure experience to our travel customers.

For more information, see “—Intellectual Property” and “Item 3. Key Information — D. Risk Factors—Risks Related to Our Business—We may not be able to adequately protect and enforce our intellectual property rights; and we could potentially face claims alleging that our technologies infringe the property rights of others.”

Security, Privacy and Anti-Fraud

We are committed to operating a secure online business. We use various security methods in an effort to protect the integrity of our networks and the confidential data collected and stored on our servers. For example, we use firewalls to protect access to our networks and to the servers and databases on which we store confidential data; we restrict access to our network by virtual private network (“VPN”) with two-factor authentication and conduct periodic audits of data access and modifications of our network; and we use password-protected encryption technology to protect our communication channels and sensitive travel customer data. In addition, we have developed and use internal policies and procedures to protect the personal information of our travel customers, and we comply with the Payment Card Industry Data Security Standard (“PCI DSS”). To enforce our security framework we have a dedicated cybersecurity team that conducts penetration testing and application security analysis, develops policies and standards, and ensures compliance with those policies and standards.

We believe that issues relating to privacy and the use of personally identifiable information are becoming increasingly important as the internet and its commercial use continue to grow. We have adopted what we believe is a detailed privacy policy that complies with local legal requirements in each of the Latin American countries in which we operate and outlines the information that we collect concerning our users and how we use it. Users must acknowledge and expressly agree to this policy when registering with our platform, signing up for our newsletters, or making a purchase.

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Although we send marketing communications to our users periodically, we use our best efforts to ensure that we respect users’ communication preferences. For example, when users register with us, they can opt out of receiving marketing e-mails from us. Users can modify their communication preferences at any time in the “My Account” section of our sites.

We use information about our users for internal purposes in order to improve marketing and promotional efforts and in order to improve our content, product offerings and site layout. We may also disclose information about our users in response to legal requirements. All information is stored on our servers located in Miami, Florida.

Moreover, we are committed to detecting and deterring possible instances of fraudulent transactions before they are completed. The key components of our fraud-prevention strategy include: (1) a dedicated and specialized fraud prevention team that works closely with our IT staff; (2) engagement with key actors in the online travel industry, such as banks and airlines, which strengthens our early-detection capabilities, thereby reducing the exposure period to potential fraud events; and (3) machine learning systems that analyze multiple factors, including intelligence gathered from our industry relationships, to help us adapt better to changing market conditions and detect and address fraudulent transactions. Our in-house team works with third-party vendors, allowing us to leverage best practices and scale quickly.

Competition

We operate in a highly competitive and evolving market. Travelers have a range of options, both online and offline, to research, find, compare, plan and book air, packages, hotels and other travel products.

Our competitors include:

• global OTAs with presence in Latin America, such as Booking.com and Expedia and travel metasearch sites;

• search websites and apps, such as Google and its travel businesses, and e-commerce and group buying websites and apps;

• alternative accommodation and vacation rental businesses, such as Airbnb;

• local offline travel agency chains and tour operators, such as CVC Brasil Operadora e Agência de Viagens; and

• smaller online travel agencies lacking a pan-regional presence.

In addition, our travel customers have the option to book travel directly with travel suppliers, including airlines, hotels and other travel service providers via online and offline channels. See “Item 3. Key Information — D. Risk Factors—Risks Related to Our Business—We operate in a highly competitive and evolving market, and pressure from existing and new companies may adversely affect our business and results of operations” for more information.

We believe that the primary competitive factors in the travel industry, in particular as consumers increasingly research, plan and book travel online, are, among other things, brand recognition, price, availability and breadth of choice of travel services and products, customer service, ease of use, fees charged to travelers, accessibility, reliability and adoption of e-commerce by travelers in the markets in which we operate. We believe our brands, scale, operational and technological capabilities, including our local knowledge, marketing expertise and technology platform, provide us with a sustainable competitive advantage.

Intellectual Property

We regard our intellectual property as critical to our future success and rely on a combination of trademark laws and contractual restrictions to establish and protect our proprietary rights in our products. Our intellectual property includes trademarks and domain names associated with the names “Despegar.com” and “Decolar.com.” To protect

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our platform and technology, we have entered into confidentiality and invention assignment agreements with our employees and certain contractors and suppliers. We own our technology platform, which is comprised of applications that we develop in-house using primarily open source software. We have not registered our technology, however, because we believe it would be difficult to replicate and that it is adequately protected by the agreements we have in place. Additionally, our technology is constantly evolving and any registration may run the risk of protecting outdated technology. We cannot assure you that all our intellectual property is fully protected and enforceable vis-à-vis third parties under all applicable laws in Latin America. For more information, see “Item 3. Key Information — D. Risk Factors—Risks Related to our Business—We may not be able to adequately protect and enforce our intellectual property rights; and we could potentially face claims alleging that our technologies infringe the property rights of others.”

Seasonality

See “Item 5. Operating and Financial Review and Prospects — Operating Results.”

Regulation

Regulations Related to the Travel Industry

The laws and regulations applicable to the travel industry affect us and our travel suppliers in the jurisdictions in which we operate, the jurisdictions in which our travel customers reside and the jurisdictions of their destinations. We are also required to be accredited by the International Air Transport Association (“IATA”) in order to promote and sell tickets for airlines connected to IATA.

Brazil

In addition to the standard licenses and permits required for all companies to operate in the travel industry in Brazil, we are subject to a specific registration of tourism providers with the Ministry of Tourism (“CADASTUR”). In Brazil, there are four main norms that govern the activities related to tourism, as well as the enrollment of services providers in the tourism industry: (i) Law No. 11,771/2008, which regulates the National Tourism Policy and defines the responsibilities of the federal government in planning, developing and stimulating the tourism sector; (ii) Decree No. 7,381/2010, which regulates Law No. 11,771/2008; (iii) Ordinance No. 130/2011 from the Ministry of Tourism, which establishes the CADASTUR, the CADASTUR’s consulting committee and regulates other measures; and (iv) Law No. 12,974/2014, which regulates the activities of tourism agencies.

Mexico

As a travel agency in Mexico, Bestday.com and Despegar.com.mx must be registered in the National Tourism Registry (Registro Nacional de Turismo or RNT) created by Decree dated June 26, 2015. The local regulation on commercial tourism activities is comprised of: (i) General Tourism Law and its regulations, which regulate tourism, as well as the processes derived from the activities carried out by the people during their trips and temporary stays in places other than their usual environment, with leisure purposes and other reasons; (ii) the resolutions issued by the Ministry of Tourism; (iii) The Federal Consumer Protection Law and its regulations, which promote and protect consumer rights and culture and seek the equity, certainty and legal security between suppliers and consumers.

Argentina

As a travel agency in Argentina, Despegar.com.ar must be registered with the Registry of Travel Agents (Registro de Agentes de Viajes) created by Section 5 of Decree No. 2,182/72. The local regulation on commercial tourism activities is comprised of: (i) Law 25,997 and its applicable regulation which governs the development and promotion of tourism in Argentina; (ii) Law 18,829 which defines the regulations applicable to travel agents; (iii) the resolutions issued by the Secretariat of Tourism; and (iv) Law 24,240 as amended, which sets forth the provisions for the protection of consumers.

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Regulations that apply to the E-Commerce Industry

We are also subject to a variety of laws, decrees and regulations that affect companies conducting business on the internet in the countries where we operate related to e-commerce, electronic or mobile payments; data collection; data protection; privacy; information requirements for internet providers; taxation (including value added taxes (“VAT”) or sales tax collection obligations); obligations to provide information to certain authorities; and other legislation which also applies to other companies conducting business in general. It is not clear how existing laws in Latin America governing issues such as general commercial activities, property ownership, copyrights and other intellectual property issues, taxation, consumer protection, digital signatures and personal privacy, apply to online businesses. Some of these laws were adopted before the internet was available and, as a result, do not contemplate or address the unique issues of the internet. Due to these areas of legal uncertainty, and the increasing popularity and use of the internet and other online services in our markets, it is possible that new laws and regulations will be adopted with respect to the internet or other online services. These regulations could cover a wide variety of issues, including e-commerce; internet service providers’ responsibility for third-party content hosted in their servers; user privacy; electronic or mobile payments; pricing, content and quality of products and services; taxation (including VAT or sales tax collection obligations, obligation to provide certain information about transactions that occurred through our platform, or about our users); advertising; intellectual property rights; consumer protection and information security. See “Item 3. Key Information — D. Risk Factors—Risks Related to our Business—We process, store and use personal information, card payment information and other consumer data, which subjects us to risks stemming from possible failure to comply with governmental regulation and other legal obligations” and “Item 3. Key Information — D. Risk Factors—Risks Related to our Business—Internet regulation in the countries where we operate is scarce, and several legal issues related to the internet are uncertain” for more information.

Brazil

Resolution (Circular) issued by the Central Bank of Brazil No. 3,682 regulates the payment arrangement (arranjos de pagamento) services in Brazil (“Payment Arrangement Services Rule”). On July 27, 2017 and March 26, 2018, the Central Bank of Brazil revoked and amended certain provisions and included new provisions to the Payment Arrangement Services Rule, which introduced a definition of sub accrediting entities (subrecendiador) and determined that all participants of the payment arrangements should be subject to a centralized settlement system not later than September 28, 2018.

Pursuant to Payment Arrangement Services Rule, among other provisions, sub-accrediting entity is defined as a party of the payment arrangement that accredits a recipient to accept a payment instrument issued by a payment institution or a financial institution that is a party to the same payment arrangement, but that does not participate in the settlement process of transactions as creditor in relation to the issuer. The definition of sub-accrediting entity provided by the Payment Arrangement Services Rule is not precise enough to confirm that our Brazilian subsidiary would be subject to it. After carrying out several discussions with the Central Bank of Brazil, financial institutions and other participants involved in the payments arrangements, our Brazilian brand Decolar demonstrated to the Central Bank of Brazil that: (i) Resolution 3,682 does not apply to its business; (ii) Decolar should not be deemed a sub-accrediting institution; and (iii) it should not be obliged to integrate its activities into the payment arrangement Services, nor be subject to the payment arrangement rules issued by the Central Bank of Brazil, which on September 2018 issued a list of the entities and companies which should not be subject to Resolution 3,682 as well as their classification. Decolar has been classified as a non-subaccreditor, this is a simple business establishment, and not as a marketplace entity as provided in the Resolution.

Regulations Related to Consumer and Data Protection

We are subject to consumer and data protection laws in every country where we have a website.

Brazil

There are several laws in Brazil dealing with privacy and data protection, including: (i) the Brazilian Federal Constitution, which provides for the protection of individuals’ fundamental and inviolable rights of intimacy/privacy, private life and image; (ii) the Brazilian Civil Code (Law No. 10,406/2002), which reaffirms the Federal Constitution’s provision of fundamental rights, and provides for the right to act against violators in order to

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cease the violation and seek compensation for suffered damage; (iii) the Consumer Protection and Defense Code (Law No. 8,078/1990), which provides for consumer-related databases, data collection and penalties related therewith; (iv) the Brazilian Internet Act (Law No. 12,965/2014), which establishes principles, guarantees, rights and obligations related to the use of the internet in Brazil; and (v) the Brazilian Internet Act Regulation (Decree No. 8,771/2016), which sets forth security standards to be complied with by internet connection and application providers (online platform operators) when storing personal data.

Brazilian consumer protection authorities and courts take the view that the express consent of the consumer must be obtained before the collection, treatment, sharing and transmission of personal data. With regard to data collection, the Brazilian Internet Act provides that personal data collection, use, storage, sharing, transmission and treatment must be authorized previously and expressly by the individual, consistent with the general privacy principle set forth by the Federal Constitution and Consumer Defense Code. For the purposes of the Brazilian Internet Act and its regulation, personal data is deemed any data related to an identified or identifiable individual, including identifying numbers, location data or electronic identifiers, when related to an individual.

In addition, Law No. 9,507/1997 regulates privacy requirements and the habeas data process, by which individual citizens can ask a court to issue an order to protect, correct or remove their personal data, and recognizes consumers’ rights to access, correct and update their personal information stored in governmental or public databases. For the purposes of this law, a public database is composed of information that either: (i) is and/or may be transmitted to third parties; or (ii) is not exclusively used by the governmental agency or legal entity generating or managing the information.

As an internet-based retailer, we are also subject to several laws and regulations designed to protect consumer rights—most importantly the Consumer Protection and Defense Code, which regulates commercial practices, product and service liability, strict liability of the supplier of products or services, reversal of the burden of proof to the benefit of consumers, joint and several liability of all companies within the supply chain, abuse of rights in contractual clauses, and advertising and information on products and services offered to the public. The Consumer Protection and Defense Code establishes the legal framework for the protection of consumers, setting out certain basic rights, including the right to clear and accurate information about products and services offered in the consumer market, with correct specification of characteristics, structure, quality and price and the risks they pose. In addition, Executive Decree No. 7.962/13 applies with regards to retaining of service in an online environment. This legislation describes, among others, the rules on disclosure of information, consumer service, payment protection and other procedures for the rendering of online services.

Brazilian General Data Protection Law No. 13.709/2018

The Brazilian General Data Protection Law (Law No. 13.709/2018 – “LGPD”) was approved in August 2018 and became effective in August 2020. The grace period was proposed in order to provide public and private institutions with a period for them to adapt to the LGPD. The LGPD is applicable to any individual or legal entity governed by public or private law treating personal data (i) in the Brazilian territory; or (ii) for the purposes of offering or supplying goods or services or treating information of data subjects located in Brazil; or (iii) if personal data has been collected in the Brazilian territory.

According to the LGPD, personal data can only be processed (i) upon data subject consent; (ii) in compliance with statutory or regulatory obligations; (iii) by public administration; (iv) for development of studies by research entities; (v) by contractual and preliminary contractual relationship; (vi) through lawsuits; (vii) for the protection of life and health; (viii) to legitimate interest of the controller; or (ix) for credit protection. The treatment of sensitive personal data (e.g., regarding ethnical or racial origin, religion, political opinion or affiliation, health information, sexual orientation) is subject to a higher scrutiny. The LGPD also provides liability obligations if damages are produced while processing personal data in violation of the provisions of the LGPD.

According to the LGPD, the eight situations in which the international transfer of data is allowed are: (i) when the data subject has provided specific and highlighted consent for such transfer; (ii) when countries or international organizations provide the appropriate level of protection of Personal Data established by Brazilian law; (iii) when controller provides and demonstrates safeguards of compliance with the principles, rights of the data subject and data protection regime established in the law, in the form of specific contractual clauses for a given transfer, among

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others; (iv) when the transfer is required for international legal cooperation between public bodies of intelligence; (v) when the transfer is required for life protection of the data subject or any third party; (vi) when the national authority authorizes such transfer; (vii) when the transfer results in a commitment undertaken under an international cooperation agreement; or (viii) when the transfer is required for enforcement of a public policy.

Provisional Measure No. 869/2018 of December 27, 2018 (MP 869/2018) created the National Data Protection Authority (“ANPD”), with powers –among others– to ensure the protection of personal data, construe the provisions of the LGPD, and supervise, monitor and apply sanctions in relation to the compliance of LGPD regulation. In order to gain definitive effectiveness, MP 869/2018 must be converted into law.

Mexico

In Mexico, data protection is regulated by the Federal Law on Protection of Personal Data Held by Private Parties, which was published in the Official Gazette of the Federation (Diario Oficial de la Federación) on July 5, 2010. This law regulates, among other things, the type of information that can be collected, and how such information can be used. In addition, Federal Consumer Protection Law includes various rights and obligations regarding transactions carried out through electronic and other means. In April 2019, the Mexican Standard NMX-COE-001-SCFI-2018 was published which, although it is not mandatory, includes a list of recommendations with the best electronic commerce practices, including data security and protection.

Argentina

In Argentina, we are subject to e-commerce laws such as Resolution No. 104/05 adopted by the Ministry of Economy and the Argentine Consumer Protection Agency, which establishes certain information requirements for internet providers, and Law No. 25,326, as amended, and its corresponding regulations, which mandate the registration of databases with the Data Protection Agency and regulate, among other things, the type of information that can be collected, and how such information can be used.

Moreover, Law No. 24,240, as amended (the “Consumer Protection Law”), sets forth certain rules and principles designed to protect consumers. The Consumer Protection Law was amended on March 12, 2008 by Law No. 26,361 in several respects, including: (i) an increase in the size of the overall group of persons deemed to be consumers, or recipients of the protections of the Consumer Protection Law; (ii) an increase in the maximum penalties applicable to providers that breach the law to AR$5 million, as discussed below, and the granting of power to the administrative authority to require the payment of direct damages by any provider; (iii) requirements that providers pay punitive damages to consumers (which may not exceed AR$5 million); and (iv) regulations regarding the possibility for consumer associations to initiate class actions on behalf of consumer groups. The Argentine Secretary of Commerce, which is part of the Argentine Ministry of Economy, is the national enforcement authority of the Consumer Protection Law, while the Autonomous City of Buenos Aires and the provinces act as local enforcement authorities.

Regulations Related to Taxation

Brazil

In Brazil, between 2011 and 2015, our Brazilian subsidiary was exempt from collection of withholding income tax (“WHT”) on remittances to cover travel expenses of Brazilian individuals abroad, within the parameters established by applicable law. From January 1, 2016 to March 1, 2016, the applicable WHT for payments, credits, delivery, use by or remittance of these amounts to foreign persons was 25%. In February 2016, our Brazilian subsidiary filed a writ of mandamus (a judicial complaint) against the federal tax authority claiming that WHT should not be applicable due to a provision of “non-imposition” contained in the Income Tax Regulations. In March 2016, the court granted our Brazilian subsidiary a preliminary injunction on the writ of mandamus, which allowed our Brazilian subsidiary to make remittances free of WHT while the preliminary injunction was in place. In December 2016, the court published a decision on the merits of the case, against our Brazilian subsidiary (which terminated the effects of the preliminary injunction). Also in December 2016, our Brazilian subsidiary filed a motion for clarification, in an attempt to request the court to issue an opinion on the possible application of tax treaties to allow our Brazilian subsidiary to not collect WHT on the basis of their provisions.

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Since March 2, 2016, the former WHT exemption was converted into a WHT imposition of 6% on remittances to cover travel expenses of Brazilian individuals abroad, within the parameters established by applicable law. This reduced WHT rate was effective until December 31, 2019. During 2018, while the motion for clarification was still pending, our Brazilian subsidiary deposited (via judicial deposits) the withheld amounts before the court in order to guarantee that (i) if the company is not successful in the plea before the court, the applicable WHT will be converted into income of the federal revenue, without the imposition of any fines or interest and (ii) if the company is successful in its plea, the amount corresponding to the WHT will be returned to our Brazilian subsidiary with monetary adjustments. The new Income Tax Regulation RIR/18 came into effect on November 23, 2018, repealing former Decree No. 3,000/1999. Under the new RIR/18, non-incidence of income tax withholdings on remittances abroad was reconsidered. On January 2020, our Brazilian subsidiary submitted a partial withdrawal from the writ of mandamus (judicial complaint), and abandoned the discussion in court, for the upcoming periods.

On November 26, 2019 a new Medida Provisoria 907/2019 came into effect. According to the new regulation, new withholding tax rates were established for remittances to cover travel expenses of Brazilian individuals abroad, with progressively increased rates starting with 7.9% in 2020, 9.8% in 2021, 11.7% in 2022, 13.7% in 2023 and 15.5% in 2024. However, on 25 May 2020, the Brazilian president vetoed the article in Medida Provisoria 907/2019, meaning that the standard withholding tax rate of 25% applies as from 25 May 2020 for remittances to cover travel expenses of Brazilian individuals abroad.

Argentina

IT District Parque Patricios

Since 2013 we have been the beneficiary of a partial tax exemption, applicable until January 30, 2029, under Buenos Aires Municipal Law No. 2,972, which includes, among others, the turnover tax reduction. This benefit implies the reduction, from the turnover tax, of any revenue directly connected to services performed through software applied to e-commerce that are performed within the designated IT district located in Parque Patricios in the city of Buenos Aires, only when: (i) said entity/person is registered under the Information and Communications Technologies Registry; and (ii) the entity/person keeps or increases the number of employees hired at the time of registration.

Software Law Benefits & Knowledge-Based-Economy Promotional Regime

On August 18, 2017, the Argentine National Ministry of Production issued Disposition 82-E/2017, accepting the registration of our Argentine subsidiary in the National Registry of Software Producers, created by Decree 1315/13. As a result of this registration and pursuant to Argentine National Law No. 25,922, as amended, and its corresponding regulations (the “Software Promotion Law”), our Argentine subsidiary had been granted several tax benefits through December 31, 2019. These benefits included (i) a fixed national tax rate, (ii) a fiscal bond equivalent to 70% of the value of 75.14% of the Company’s social security tax contribution payments under Laws 19,032, 24,013 and 24,241, which can be used as a tax credit to offset national taxes; (iii) exemption from value-added tax withholding regimes; and (iv) a 60% reduction in the total amount of corporate income tax as applied to income from the activities of creation, design, development, production, implementation or adjustment (upgrade) of developed software systems and their associated documents.

On June 10, 2019, the Argentine government enacted Law No. 27,506 (knowledge-based economy promotional regime), which established a regime that provides certain tax benefits for companies that meet specific criteria, such as companies that derive at least 70% of their revenues from certain specified activities. Law No. 27,506 allows companies that were benefiting from the software development law, to apply for tax benefits under Law No. 27,506. The aforementioned regime was suspended on January 20, 2020 through a new resolution issued by Argentina’s Ministry of Productive Development until new rules for the application of the knowledge-based economy promotional regime were issued.

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In October 2020, the Argentine Congress approved a new Knowledge Based Economy Law. The approved regime is effective as of January 1, 2020 until December 31, 2029. Based on the amended promotional regime, eligible companies that meet new specified criteria, are entitled to (i) a reduction of the income tax burden up to 60% (60% for micro and small enterprises, 40% for medium-sized enterprises and 20% for large enterprises) over the promoted activities for each fiscal year, applicable to both Argentine source income and foreign source income; (ii) stability of the benefits established by the knowledge-based economy promotional regime (as long as the beneficiary is registered and in good standing) and (iii) a non-transferable tax credit bond generally amounting to 70% (up to 80% in certain specific cases) of the Company’s contribution to the social security regime of every employee whose job is related to the promoted activities (caps on the number of employees are applicable). The tax credit may be used to offset federal taxes, such as value-added tax and income tax.

In December 2020, the Argentine government issued Decree No. 1034/2020, which set the rules to implement the provisions of the knowledge-based economy promotional regime. Eligible companies must enroll in a registry according to the terms and conditions established by the Application Authority, which will verify compliance with the requirements. The Decree also set the mechanism for calculating the level of investment in research and development, the level of employee retention, exports, among others. It also establishes that exports of services from companies participating in this regime will not be subject to export on services duties. On January 13, 2021, Argentina’s Ministry of Productive Development, the government entity in charge of implementing the knowledge-based economy promotional regime, issued Resolution No. 4/2021 which was followed by Disposition No. 11/2021 issued by the Under Secretariat of Knowledge Economy on February 12, 2021. Both rules establish further details on the requirements, terms, conditions, application, and compliance procedures to be eligible under the promotional regime. We believe we are eligible to benefit from the new Knowledge Based Economy Law and related tax benefits and applied before the Argentine Ministry of Productive Development for approval to benefit from such tax regime.

Disposition No. 11/2021 issued by the Under Secretariat of Knowledge Economy established that for those beneficiaries of the former software promotion regime who have submitted their application for the new Knowledge-based regime in the terms of Resolution No. 449/19 of the former Secretariat of Entrepreneurs (as is the case of Despegar Argentina), the procedure for registration in the new regime consists of submitting a ratification note, attaching the documentation issued by the regulator regarding the normal course of promotional obligations of the law of software promotion. As of the date of this Annual Report we are awaiting the issuance of the final document to comply with the aforementioned ratification.

Income Tax Reform

On December 27, 2017, the Argentine Congress approved a comprehensive income tax reform effective since January 1, 2018. Among the key features, the bill: (i) reduces the 35% income tax rate to 30% for 2018 and 2019, and to 25% as from 2020; (ii) imposes a dividend withholding tax paid by an Argentine entity of 7% for 2018 and 2019, increasing to 13% as from 2020; and (iii) repeals the “equalization tax” (i.e., 35% withholding applicable to dividends distributed in excess of the accumulated taxable income) for income accrued from January 1, 2018.

On December 23, 2019, the Argentine Congress enacted a law which maintains the corporate income tax rate of 30% for two more years, instead of reducing the rate to 25% as established under the previous law. The law also maintains the dividend withholding tax rate of 7% for two more years, instead of applying the 13% rate as previously established.

Tax on Export of Services

In September 2018, the Argentine government issued the Decree 793/2018 which established a temporary withholding on exports of services of 12% with a maximum limit of AR$ 4 per each dollar of the export invoice amount. This withholding on exports of services was applicable for exports of years 2019 and 2020. On December 2019, Decree No. 99/2019 reduced the percentage from 12% to 5% without limit of Argentine pesos per dollar, to become effective since January 1, 2020 until December 31, 2021.

In December 2020 the Argentine government issued Decree 1034/2020, which regulates the Knowledge Based Economy Law, provides that duties on export services will be taxed at a 0% tax rate when such services are exported by entities registered under the Registry of Beneficiaries of the Knowledge Based Economy Promotional Regime.

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Additionally, Resolution 4/2021, published on January 14, 2021, provides that this tax benefit will apply to services exported by beneficiaries of the regime since their registration in the relevant registry. However, for those entities that were registered under the Software Promotion Law, the registration under the Knowledge Based Economy Law will be granted as from January 1, 2020 and the 0% tax rate will be applicable for services exported from the date in which Decree 1034/2020 entered into force (December 22, 2020).

We believe our Argentine subsidiary is eligible to benefit from the new 0% export tax rate in the Knowledge Based Economy Law. Our Argentine subsidiary has applied before the Argentine Ministry of Productive Development for approval to benefit from such tax regime. Disposition No. 11/2021 issued by the Under Secretariat of Knowledge Economy established that for those beneficiaries of the former software promotion regime who have submitted their application for the new Knowledge-based regime in the terms of Resolution No. 449/19 of the former Secretariat of Entrepreneurs (as is the case of Despegar Argentina), the procedure for registration in the new regime consists of submitting a ratification note, attaching the documentation issued by the regulator regarding the normal course of promotional obligations of the law of software promotion. As of the date of this Annual Report we are awaiting the issuance of the final document to comply with the aforementioned ratification.

New Reverse Withholding Tax for an Inclusive and Solidarity Argentina (PAIS) and General Resolution No. 4815/2020.

Effective as of December 23, 2019, a new reverse withholding tax (Tax for an Inclusive and Solidarity Argentina (PAIS)) was created in Argentina. The new 30% tax applies on the purchases by Argentinean residents of foreign services through credit and debit cards; services to be provided outside Argentina, contracted through Argentine travel and tourism agencies –wholesale or retailers–; and the acquisition of international passenger transport services (by land, air, aquatic and road). Furthermore, the Argentine Federal Tax Authorities (AFIP) issued on September 16, 2020 General Resolution No. 4815/2020, which imposes an additional 35% reverse withholding tax applicable on same transactions by Argentine residents.

Uruguay and Others

We operate as a free trade zone user of the Zonamerica Free Trade Zone in Montevideo, Uruguay (the “Free Trade Zone”), under Law No. 15,921 and its corresponding regulations. No domestic Uruguayan tax whatsoever applies in the Free Trade Zone, except for social security contributions for any Uruguayan employees. No social security contributions are required for non-Uruguayan employees, so long as they do not exceed 25% of the personnel working in the facility located in the Free Trade Zone. In addition, the inflow of goods and services to the Free Trade Zone, as well as their outflow abroad, are tax exempt. The movement of goods and services into a Free Trade Zone from a non-Free Trade Zone Uruguayan territory is treated as an export and therefore also exempt from VAT and the Specific Internal Tax (Impuesto Específico Interno or “IEI”). On the other hand, if goods are introduced into a non-Free Trade Zone Uruguayan territory from a Free Trade Zone, the corresponding import tax will apply. Exporting services from a Free Trade Zone to a non-Free Trade Zone Uruguayan territory is generally prohibited. However, in 2016, our Uruguay subsidiary located in the Free Trade Zone was authorized by the Ministry of Economy in Uruguay to have limited operations with a related party located in Uruguay. By law, the Uruguayan state is liable for damages if the tax exemptions, benefits and rights of users of Free Zones granted pursuant to the law are not fulfilled during the term of their contracts.

We have operated as a free trade zone user in Bogotá, Colombia under Decree 2147 until December 31, 2019. Based on the regime, we received certain tax benefits, consisting primarily of a reduced income tax rate. Since January 1, 2020 our Colombian subsidiary after a corporate reorganization is no longer beneficiary of free trade tax benefits.

Regulations Related to Foreign Currency and Exchange Rates

There are also laws and regulations that address foreign currency and exchange rates in many of the countries in which we operate. In certain countries where we operate, we need governmental authorization to pay invoices to a foreign supplier or send money abroad due to foreign exchange restrictions. See “Item 3. Key Information — D. Risk Factors—Risks Related to Latin America—We are subject to significant foreign currency exchange controls in certain countries in which we operate.”

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Legal Proceedings

We are a party to various lawsuits and claims arising out of the ordinary course of business. We estimate the range of our liability related to pending litigation when we believe the amount or range of loss can be estimated. We record our best estimate of a loss when the loss is considered probable. When a liability is probable and there is a range of estimated loss with no best estimate in the range, we record the minimum estimated liability related to the lawsuits or claims. As additional information becomes available, we assess the potential liability related to our pending litigation and claims and revise our estimates. Due to uncertainties related to the resolution of lawsuits and claims, the ultimate outcome may differ significantly from our estimates. In the opinion of management and based on liability accruals provided, our ultimate exposure with respect to these pending lawsuits and claims is not expected to have a material adverse effect on our consolidated financial position or cash flows, although they could have a material adverse effect on our results of operations for a particular reporting period.

As of December 31, 2020, we have reserved $10.0 million to cover for probable losses.

We are currently not a party to any legal, arbitration or administrative proceedings that, in the opinion of our management, is likely to have a material and adverse effect on our business, financial condition and results of operations, other than as set forth below.

Brazil

Between May and July 2016, Booking.com filed several complaints against us before various public offices: Public Prosecution Office of the State of Rio Grande do Sul, Public Prosecution Office of the State of São Paulo, Consumer Defense Office of the State of Rio de Janeiro, Consumer Defense Office of the State of São Paulo (“PROCON”), Consumer Defense Office of the Department of Justice, Consumer Defense Committee of the Legislative Assembly of the State of Rio de Janeiro and the Public Prosecution Office of the State of Rio de Janeiro. Booking.com alleged that (i) we offered higher prices to Brazilian consumers than those offered to foreign consumers for the same accommodation during the same period of time (“geopricing”) and (ii) we made accommodations unavailable for Brazilian consumers whereas foreign consumers were allowed to book the same accommodations (“geoblocking”). Based on these allegations, Booking.com requested that the public prosecution offices order us to pay penalties and/or to initiate public civil actions against us in order to prevent the alleged practices. We presented our administrative defenses to all claims. Such complaints resulted in investigation proceedings with the respective authorities.

In June 2018 the Consumer Defense Office of the Department of Justice issued a decision against Decolar and condemned it to pay a fine in the amount of R$7.5 million, on the grounds of alleged geopricing and geoblocking practices and obligated Decolar to cease such practices. We appealed such decision. The proceeding filed before PROCON originally closed in favor of Decolar; however, on January 23, 2020, the same Office issued a new resolution imposing a fine against Decolar in the amount of R$1.2 million. In March 2020 Decolar filed its defense, which evidences the inconsistencies in PROCON’S resolution, especially considering the former favorable decision. We are currently waiting for PROCON’s decision.

In January 2018, the Public Prosecutor’s Office of the State of Rio de Janeiro filed a public civil action against us in the Rio de Janeiro court. This complaint also refers to the alleged geopricing and geoblocking practices in detriment to Brazilian consumers and seeks the cessation of the practice and payment of damages. We filed our defense on March 20, 2018 and provided evidence that we weren’t engaging in those alleged practices. However, the Rio de Janeiro Public Attorney Office requested to the court the suspension of the injunction granted to Decolar, not to seal (classify) Decolar’s defense, and make public available Decolar’s defense documentation. Decolar appealed and the court kept its defense sealed and private; however the court decided to start the phase of “expert examination”, which has not started yet.

Although we believe our Brazilian subsidiary has meritorious defenses to this lawsuit and administrative proceedings, we cannot assure you what the ultimate outcome of this matter will be. The final resolution of these claims, which could take several years, is not likely to have a material effect on our financial position or results of operations.

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Mexico

As in Brazil and Argentina, Booking.com filed a claim in Mexico accusing our Mexican subsidiary of carrying out certain illegal practices (geopricing and geoblocking) by favoring foreign consumers versus local consumers. The claim was filed before the Office of the Federal Prosecutor for the Consumer in 2019 and we were notified in February 2021. In March, 2021 Despegar filed its response rejecting the plaintiff’s allegation.

Argentina

On June 28, 2017, the Sindicato Empleados de Comercio de Capital Federal (Union for Employees of the Commercial Sector in the City of Buenos Aires, or “SECCF”) filed a lawsuit against our Argentine subsidiary, Despegar.com.ar, in which SECCF demanded the application of its collective labor agreement to all of the employees of the subsidiary. According to SECCF’s claim, Despegar.com.ar should have withheld and transferred to SECCF an amount equal to 2% of the gross monthly salaries of all of its employees for the period from October 2011 through October 2016. As a result, SECCF seeks payment of approximately AR$18 million. On April 19, 2018 SECCF filed a new claim, similar to the previous one, but against La Inc S.A.—an Argentine subsidiary company that had already been merged with Despegar.com.ar several months before. In this new claim, SECCF sought an amount equal to the 0.5% of the gross monthly salaries of La Inc’s employees for certain periods (July and August, 2012; September, 2013; and March, 2015 to the present).

We filed both responses in a timely manner, rejecting all the claims, with similar defenses. On May, 2019 we reached a settlement with SECCF in both proceedings, in which we accepted to execute a new labor collective agreement with the union, including certain employees, and the union agreed to withdraw these claims. The new collective agreement came into effect in April 2020.

As in Brazil, Booking.com filed two claims in Argentina accusing our Argentine subsidiary of carrying out certain illegal practices (geopricing and geoblocking) by favoring foreign consumers versus local consumers. The claims were filed before the National Consumer Protection Office (August 2019), and the National Unfair Competition Office (November 2019). In the first claim, Despegar filed its response rejecting plaintiff’s allegation and introducing a counterclaim, asserting that it was Booking.com and not Despegar who carried out misleading practices against consumers. We also accused Booking of lacking the compulsory license granted by the Tourism Ministry to sell tourism products in Argentina. On December 23, 2019 the National Consumer Protection Office rejected the claim filed by Booking and ordered an investigation against it, to be carried out before the National Ministry of Tourism. In the second claim (filed before the National Unfair Competition Office in November 2019) we filed our response rejecting plaintiff’s allegation on the same basis used on the case before the Consumer Protection Office. The Unfair Competition Office is in the process of collecting evidence. We believe that the final resolution of this claim is not likely to have a material effect on our financial position or results of operations.

Colombia

As in Brazil, Argentina and Mexico, in 2018 Booking.com filed a claim in Colombia accusing our Colombian subsidiary of carrying out certain illegal practices (geopricing and geoblocking) by favoring foreign consumers versus local consumers.The administrative claim before the Consumer Defense Office (“SIC”) has been pending since 2018. Pursuant to applicable law, the SIC had until April 1, 2021 to issue a decision on this matter. As of the date of this Annual Report the SIC has not issued a decision and, therefore, we believe this claim should be closed in favor of Despegar.

C. Organizational Structure

Despegar.com, Corp. is a holding company organized in the British Virgin Islands, which owns, directly or indirectly, all of our operating subsidiaries. The diagram below depicts the organizational structure of our key subsidiaries:

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Property, Plants and Equipment

The following table shows the location of our significant leased offices and customer service centers, and the term of the leases under which they operate.

City, Country	Facility	Address	Approximate Square Meters		Agreement Expiration Date
Buenos Aires Argentina	Argentina operation and regional functions	Avenida Corrientes 746, 6th Floor		406	02/28/2023
Buenos Aires, Argentina	Argentina operation and regional functions	Juana Manso 1069, 5 Floor		1,203	05/21/2022
La Plata, Buenos Aires Argentina	Argentina operation	Camino Centenario esq. 511, La Plata		2,600	08/31/2022
Bogotá, Colombia	Colombia operation and customer service center	Interior 101, Manzana 15, Carretera 106 Nbr. 15A-25, Free Trade Zone		1,754	02/23/2021
Montevideo, Uruguay	International Hotels, Packages and Other Travel Products operations and Shared service center	Ruta 8 Km. 17,500, local 318, edificio 300, Zonamerica		2,092	09/14/2020
Sao Paulo, Barueri, Brazil	Brazil operation	Alameda Grajuá 219		5,600	08/16/2023
Ciudad de Cancún	Quintana Roo	Av. Bonanpak Sm 10 Mz 2 Lote 7		4,478	10/31/2024

We also own two properties: (i) an approximately 2,077 square meter facility at Jujuy 2013 in the Parque Patricios tech district of Buenos Aires, Argentina, which houses part of our Argentina operations including IT support, and (ii) an approximately 223 square meter facility on Avenida Francisco de Miranda in Caracas, Venezuela, which is currently unused and previously housed our Venezuela operations.

As part of our Mexican operations, Best Day leases approximately 78 small kiosks, mainly in hotels and shopping centers, which house part of our sales operations and approximately 95 vans for providing transportation to customers who contract destination services.

Our properties are geographically distributed to meet our regional operating requirements, and none of our properties are individually material to our business operations. Many of our leases have an option to renew, and we believe that we will be able to successfully renew expiring leases on terms satisfactory to us if needed. We believe that our facilities are adequate for our operations and that suitable additional space will be available when needed.

ITEM 4A. UNRESOLVED STAFF COMMENTS

None.

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ITEM 5 OPERATING AND FINANCIAL REVIEW AND PROSPECTS

A. Operating Results

Overview

We are the leading online travel company in Latin America, mainly known by our two brands, Despegar, our global brand, and Decolar, our Brazilian brand. In Mexico we are best known by our brand Best Day, which we acquired in October 2020. We have a comprehensive product offering, including airline tickets, packages, hotels and other travel-related products, which enables consumers to find, compare, plan and purchase travel products easily through our marketplace. We provide our network of travel suppliers a technology platform for managing the distribution of their travel products and access to our travel customers.

During 2020 and 2019, we had approximately 2.5 million and 5.2 million travel customers, respectively. For the years ended December 31, 2020 and 2019, our gross bookings were $1.4 billion and $4.7 billion, respectively.

All percentages within this section are calculated on actual, unrounded numbers.

Item 5 of this Annual Report on Form 20-F discusses the Company’s operating and financial review and prospects as of and for the fiscal years ended December 31, 2020 and 2019. Item 5 “A. Operating and Financial Review and Prospects—Operating Results—Results of Operations—Year Ended December 31, 2019 Compared to Year Ended December 31, 2018,” Item 5 “Operating and Financial Review and Prospects—B. Liquidity and Capital Resources” and Item 5 Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Cash Flows—Cash Flows for the Year Ended December 31, 2019 Compared to Year Ended December 31, 2018” included in our Annual Report on Form 20-F for the fiscal year ended December 31, 2019 filed with the SEC on April 10, 2020 are incorporated herein by reference.

Segments

We organize our business into two reportable segments: (1) “Air” and (2) “Packages, Hotels and Other Travel Products”. Our Air segment offers travelers the possibility of purchasing airline tickets from airlines around the world. Our Packages, Hotels and Other Travel Products offers travelers the possibility of purchasing travel packages (which can include airline tickets and hotel rooms), as well as stand-alone sales of hotel rooms (including vacation rentals), car rentals, bus tickets, cruise tickets, travel insurance and destination services.

In 2020, 47.8% and 52.2 % of our total consolidated revenue was derived from our Air and our Packages, Hotels and Other Travel Products segments, respectively. In 2019, 38.4% and 61.6% of our total consolidated revenue was derived from our Air and our Packages, Hotels and Other Travel Products segments, respectively.

For the years ended December 31, 2020 and 2019, we generated:

• Consolidated net revenue of $131.3 million and $524.9 million, respectively;

• Consolidated operating losses of $177.2 million and $8.9 million, respectively;

• Consolidated net losses of $142.9 million and $20.9 million, respectively;

• Consolidated Adjusted Segment EBITDA attributable to our Air segment of $(32.9) million and $3.3 million, respectively.

• Consolidated Adjusted Segment EBITDA attributable to our Packages, Hotels and Other Travel Products segment of $(82.4) million and $36.5 million, respectively.

• Consolidated Adjusted Segment EBITDA that is not allocated to either of our segments of $(6.5) million and $(13.2) million, respectively.

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• Consolidated Adjusted EBITDA of $(121.8) million and $26.6 million, respectively.

Trends

Impact of COVID-19

The COVID-19 pandemic, and measures to contain the virus, including government travel restrictions and quarantine orders, have had a significant negative impact on the travel industry. COVID-19 has negatively impacted consumer sentiment and consumer’s ability to travel, and many of our supply partners, particularly airlines and hotels, continue to operate at reduced service levels. As the spread of the virus has been contained to varying degrees in certain countries, some travel restrictions have been lifted and consumers have become more comfortable traveling, particularly to domestic locations. This has led to a moderation of the declines in travel bookings and in cancellation rates compared to the March and April 2020 time period. However, travel booking volume remains significantly below prior year levels and cancellation levels remain elevated compared to pre-COVID levels. Furthermore, new variants of COVID-19 have been discovered and raise concern about new reinfections. We cannot predict how long the COVID-19 pandemic will continue or how long current or future travel restrictions will remain in place.

The degree of containment of the virus, and the recovery in travel, has varied country by country. During the recovery period, there have been instances where cases of COVID-19 have started to increase again after a period of decline, which in some cases impacted the recovery of travel in certain countries. While many countries have begun the process of vaccinating their residents against COVID-19, the large scale and challenging logistics of distributing the vaccines, as well as uncertainty over the efficacy of the vaccine against new variants of the virus, may contribute to delays in economic recovery. COVID-19 has also had broader economic impacts, including an increase in unemployment levels and reduction in economic activity, which could lead to recession and further reduction in consumer or business spending on travel activities, which may negatively impact the timing and level of a recovery in travel demand. Broader, sustained negative economic impacts could also put strain on our suppliers, business and service partners which increases the risk of credit losses and service level or other disruptions.

Our financial and operating results for 2020 were significantly impacted due to the decrease in travel demand related to COVID-19. During the second, third and fourth quarters of 2020, our gross bookings declined by 83% as compared to the corresponding nine-month period of 2019. During the second quarter of 2020, our gross bookings declined by 94% compared to the first quarter of 2020. During the third quarter of 2020, our gross bookings increased by 238% compared to the second quarter of 2020 and during the fourth quarter of 2020, our gross bookings increased by 143% compared to the third quarter of 2020. We expect the impact to the overall travel market, and our business, to continue into 2021. The full duration and total impact of COVID-19 remains uncertain and it is difficult to predict how the recovery will unfold for the travel industry and, in particular, our business. Additionally, further health-related events, political instability, geopolitical conflicts, acts of terrorism, significant fluctuations in currency values, sovereign debt issues, and natural disasters, are examples of other events that could have a negative impact on the travel industry in the future.

Following the onset of the COVID-19 pandemic, we accelerated the execution of several cost saving and cash preservation initiatives. As such, we implemented several actions aimed at reducing our costs and our monthly cash usage. These actions included (i) temporarily reducing salaries of our senior and middle management; (ii) suspending bonuses to all employees; (iii) reducing part of our workforce and implementing a hiring freeze and limiting inflation salary increases; (iv) reducing working hours and implementing unpaid leave in certain locations; (v) accelerating synergies from acquisitions; (vi) renegotiating supplier payment terms and conditions; (vii) reviewing and renegotiating, to the extent possible, all contracts and commitments; (viii) reducing marketing expenses and (ix) deferring non-critical capital expenditures. As a result, we recognized $13.0 million in headcount reduction benefits during the year ended December 31, 2020. During the quarter ended March 31, 2021, we incurred additional severance costs of $1.1 million and we expect to incur a similar amount in April 2021. The full duration and total impact of COVID-19 remains uncertain and it is difficult to predict how the recovery will unfold for global economies, the travel industry or our business. As a result, we continue to actively evaluate additional cost reduction efforts, and should we make decisions in future periods to take further actions we will incur additional reorganization charges.

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We also engaged in certain smaller scale restructure actions in 2020 to centralize certain operational functions and systems, for which we recognized $0.4 million in reorganization charges during the year ended December 31, 2020, which were primarily related to anticipated termination of several office leases.

While some cost reduction measures taken during the COVID-19 pandemic are temporary and intended to minimize cash usage during this disruption, we expect to continue to benefit from the majority of the savings when business conditions return to more normalized levels.

Long-term trends

We believe that our results of operations and financial performance will be driven primarily by the following long-term trends:

• Growth in and Retention of our Traveler Customer Base: A key driver of our revenue will be the number of customer transactions and the growth in our customer base. One important driver of growth in our travel customer base is consumer awareness of our brand which we foster via our online and offline marketing throughout our target markets in Latin America. We also benefit from network effects, in that a larger customer base helps us to attract additional travel suppliers and, in turn, a larger network of travel suppliers helps us to attract new travel customers as well as drive retention and repeat purchases. We focus on maintaining strong customer satisfaction to build long-term customer relationships. During the 2020 and 2019, approximately 58% % and 64%, respectively, of our travel customers had completed previous purchases on our platform.

• Cross-Selling: Our financial results are also driven by our ability to cross-sell and increase the number of products that we are able to sell in connection with each trip, which allows us to increase our revenue from each transaction without incurring the costs of acquiring additional travel customers.

• Changes in Product Mix and New Product Offerings: In addition to the total volume of transactions, our operating results also vary depending on product mix. In particular, packages and hotels tend to have higher margins than air travel. In addition, we continually seek to expand our product offerings, whether by adding new product categories, such as our introduction of our bus, local concierge and vacation rentals products, which may have higher or lower margins than our overall business, or by the ongoing expansion of our travel supplier base.

• Shift to Mobile Transactions: As smart phone penetration in Latin America continues to increase, Latin American consumers have begun to make greater use of mobile devices to transact online. Mobile is an increasingly important part of our business, as consumers are quickly able to access and browse our real-time travel offerings, compare prices and make purchases through their mobile devices. During 2020 and 2019, mobile accounted for approximately 71% and 70%, respectively, of all of our user visits, and approximately 48% and 40%, respectively, of our transactions were completed on our mobile platform, complementing our desktop website traffic. Our strategic focus on mobile enables us to remain connected to travel customers and provides the opportunity for travel customers to access our platform after they have arrived at their destination to purchase additional products, such as rental cars, destination services and travel insurance, or make last-minute hotel or air travel bookings.

• Selling and Marketing Expenditures: Our number of transactions and gross bookings, and consequently our revenue and results of operations, are impacted by the level of our selling and marketing expenditures. We monitor our selling and marketing expenditures and their impact on our revenue in many cases virtually in real-time, as a significant amount of our selling and marketing expenditures relate to online advertising for which we can obtain real-time click-through data. As a result, we are able to adjust our selling and marketing expenditures to respond rapidly to changing market conditions. During 2020, as part of our cost-savings measures in connection with the COVID-19 pandemic, we reduced our selling and marketing expenditures by 70% compared to 2019.

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• Integration of recent acquisitions: A successful and timely integration of Best Day and Koin into our company will enable us to capture relevant synergies both from a technological and bottom line perspective. We will seek to integrate such acquired businesses into our current operations in a manner that maximizes such synergies.

Recent Acquisitions

In June 2019 we acquired the Viajes Falabella travel companies in Chile, Argentina and Peru and in July 2019, we acquired Viajes Falabella which we consolidated for six months in our fiscal year 2019 as compared to twelve months in our fiscal year 2020.

In August 2020, we acquired Koin which we consolidated for four months in our fiscal year 2020.

In October 2020, we acquired the Best Day Group which we consolidated for three months in our fiscal year 2020.

Therefore, the comparison of our results of operations for 2020 to 2019 are affected by the timing and size of our acquisitions.

Seasonality

We generally experience seasonal fluctuations in the demand for our travel services. Our most significant market, Brazil, and the rest of South America were we operate, are located in the Southern hemisphere where summer runs from December 1 to February 28 and winter runs from June 1 to August 31. Our most significant market in the Northern hemisphere is Mexico where summer runs from June 1 to August 31 and winter runs from December 1 to February 28. Accordingly, traditional leisure travel bookings in the Southern hemisphere are generally the highest in the third and fourth quarters of the year as travelers plan and book their winter and summer holiday travel. The number of bookings typically decreases in the first quarter of the year. In the Northern hemisphere, bookings are generally the highest in the first three quarters as travelers plan and book their spring, summer and winter holiday travel. The seasonal revenue impact is exacerbated with respect to income by the nature of variable cost of revenue and direct sales and marketing costs, which is typically realized in closer alignment to booking volumes, and the more stable nature of fixed costs.

The continued growth of international operations or a change in product mix may influence the typical trend of the seasonality in the future, and there may also be business or market driven dynamics that result in short-term impacts to revenue or profitability that differ from the typical seasonal trends.

Revenues, expenses, assets and liabilities can vary during each quarter of the year. Therefore, the results and trends in these consolidated financial statements may not be the same as those for any subsequent quarter or the full year.

Due to the COVID-19 pandemic, which led to significant cancellations for future travel during the second and third quarters of 2020 and impacted new travel bookings for the the last three quarters of 2020, we did not experience our typical seasonal pattern for bookings, revenue and profit during 2020. In addition, with the decrease in new bookings and increase cancellations in 2020, our typical, seasonal working capital source of cash was significantly disrupted, resulting in unfavorable working capital trends and material negative cash flow since the second quarter of 2020 when we typically generate significant positive cash flow. Seasonal trends were more normalized during the fourth quarter of 2020, but it is difficult to forecast the seasonality for the upcoming quarters, given the uncertainty related to the duration of the impact from COVID-19 pandemic and the shape and timing of any sustained recovery. In addition, we are experiencing much shorter booking windows, which could also impact the seasonality of our working capital and cash flow.

Critical Accounting Policies and Estimates

Critical accounting policies and estimates are those that we believe are important in the preparation of our consolidated financial statements because they require that we use judgment and estimates in applying those policies. We prepare our consolidated financial statements and accompanying notes in accordance with generally

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accepted accounting principles in the United States (“GAAP”). Preparation of the consolidated financial statements and accompanying notes requires that we make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements as well as revenue and expenses during the periods reported. We base our estimates on historical experience, where applicable, and other assumptions that we believe are reasonable under the circumstances. Actual results may differ from our estimates under different assumptions or conditions. There are certain critical estimates that we believe require significant judgment in the preparation of our consolidated financial statements. We consider an accounting estimate to be critical if:

• it requires us to make an assumption because information was not available at the time or it included matters that were highly uncertain at the time, we were making the estimate; and

• changes in the estimate or different estimates that we could have selected may have had a material impact on our financial condition or results of operations.

For more information on each of these policies, see Note 3 — Significant Accounting Policies, in the notes to our consolidated financial statements. We discuss information about the nature and rationale for our critical accounting estimates below.

Recoverability of Goodwill and Indefinite and Definite-Lived Intangible Assets

Goodwill. We assess goodwill for impairment annually as of December 31, or more frequently, if events and circumstances indicate impairment may have occurred. In the evaluation of goodwill for impairment, we typically perform a quantitative assessment and compare the fair value of the reporting unit to the carrying value and, if applicable, record an impairment charge based on the excess of the reporting unit’s carrying amount over its fair value. Periodically, we may choose to perform a qualitative assessment, prior to performing the quantitative analysis, to determine whether the fair value of the goodwill is more likely than not impaired.

We generally base our measurement of fair value of reporting units on an analysis of the present value of future discounted cash flows. The discounted cash flows model indicates the fair value of the reporting units based on the present value of the cash flows that we expect the reporting units to generate in the future. Our significant estimates in the discounted cash flows model include: our weighted average cost of capital, long-term rate of growth and profitability of our business and working capital effects.

We believe the weighted use of discounted cash flows is the best method for determining the fair value of our reporting units because these are the most common valuation methodology used within the travel and internet industries.

Indefinite-Lived Intangible Assets. We base our measurement of fair value of indefinite-lived intangible assets, which primarily consist of brands and domains, using the relief-from-royalty method. This method assumes that the brands and domains have value to the extent that their owner is relieved of the obligation to pay royalties for the benefits received from them. This method requires us to estimate the future revenue for the related brands, the appropriate royalty rate and the weighted average cost of capital.

Definite-Lived Intangible Assets. We review the carrying value of long-lived assets or asset groups to be used in operations whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. Factors that would necessitate an impairment assessment include a significant adverse change in the extent or manner in which an asset is used, a significant adverse change in legal factors or the business climate that could affect the value of the asset, or a significant decline in the observable market value of an asset, among others. If such facts indicate a potential impairment, we would assess the recoverability of an asset group by determining if the carrying value of the asset group exceeds the sum of the projected undiscounted cash flows expected to result from the use and eventual disposition of the assets over the remaining economic life of the primary asset in the asset group. If the recoverability test indicates that the carrying value of the asset group is not recoverable, we will estimate the fair value of the asset group using appropriate valuation methodologies, which would typically include an estimate of discounted cash flows. Any impairment would be measured as the difference between the asset groups carrying amount and its estimated fair value.

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The use of different estimates or assumptions in determining the fair value of our goodwill, indefinite-lived and definite-lived intangible assets may result in different values for these assets, which could result in an impairment or, in the period in which an impairment is recognized, could result in a materially different impairment charge.

Business Combinations

We assign the value of the consideration transferred to acquire a business to the tangible assets and identifiable intangible assets acquired and liabilities assumed on the basis of their fair values at the date of acquisition. Any excess purchase price over the fair value of the net tangible and intangible assets acquired is allocated to goodwill. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions, in particular with respect to intangible assets. Critical estimates in valuing certain intangible assets include but are not limited to future expected cash flows from customer relationships and trade names, and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.

Other Long-Term Liabilities

Various Legal and Tax Contingencies. We record liabilities to address potential exposures related to business and tax positions we have taken that have been or could be challenged by taxing authorities. In addition, we record liabilities associated with legal proceedings and lawsuits. These liabilities are recorded when the likelihood of payment is probable, and the amounts can be reasonably estimated. The determination for required liabilities is based upon analysis of each individual tax issue, or legal proceeding, taking into consideration the likelihood of adverse judgments and the range of possible loss. In addition, our analysis may be based on discussions with outside legal counsel. The ultimate resolution of these potential tax exposures and legal proceedings may be greater or less than the liabilities recorded.

Non-Convertible Preferred Stock and Warrant Transaction

In September 2020, we completed the issuance and sale of our Series A Preferred Shares and Warrants to purchase our ordinary shares to LCLA Daylight LP, an affiliate of L Catterton Latin America III, L.P. pursuant to an Investment Agreement dated August 20, 2020. We issued and sold 150,000 shares of our newly created Series A Preferred Shares, no par value per share and Warrants to purchase 11,000,000 ordinary shares, no par value, for an aggregate purchase price of $150 million. As of the date of this Annual Report, LCLA Daylight LP has not exercised the Warrants.

In accordance with U.S. GAAP, the gross proceeds from the sale were allocated to the non-convertible preferred stock and warrants on a relative fair value basis. In determining the fair value of the Series A Preferred Shares, we primarily used discounted cash flow analyses. Inputs to the discounted cash flow analyses and other aspects of the valuation require judgment. The more significant inputs used in the discounted cash flow analyses and other areas of judgment include assumptions on term, cash flows, and market yield. In determining the fair value of the Warrants, we primarily used the Black Scholes Option Pricing Model (“BSOPM”). Inputs to the BSOPM and other aspects of the valuation require judgment. The more significant inputs used in the BSOPM and other areas of judgment include the starting stock price or value of the underlying assets, the strike price, the time to expiration, and volatility and risk-free rate. In order to consider the two-year transfer restriction of the Warrants, considered to be security specific, we applied a Discount for Lack of Marketability with the Finnerty Method.

Income Taxes

We account for income taxes under the asset and liability method that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in our financial statements or tax returns. Judgment is required in assessing the future tax consequences of events that have been

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recognized in our financial statements or tax returns. Variations in the actual outcome of these future tax consequences could materially impact our financial position, results of operations or effective tax rate.

Significant judgment is required in determining our worldwide income tax provision. In the ordinary course of a global business, there are many transactions and calculations where the ultimate tax outcome is uncertain. Some of these uncertainties arise as a consequence of revenue sharing and cost reimbursement arrangements among related entities, the process of identifying items of revenues and expenses that qualify for preferential tax treatment, and segregation of foreign and domestic earnings and expenses to avoid double taxation. Although we believe that our estimates are reasonable, the final tax outcome of these matters could be different from that which is reflected in our historical income tax provisions and accruals. Such differences could have a material effect on our income tax provision and net income in the period in which such determination is made.

In estimating future tax consequences, all expected future events are considered other than enactments of changes in tax laws or rates. Valuation allowances are established when necessary to reduce deferred tax assets to amounts which are more likely than not to be realized. We consider future growth, forecasted earnings, future taxable income, the mix of earnings in the jurisdictions in which we operate, historical earnings, the carryforward periods available for tax reporting purposes and prudent and feasible tax planning strategies in determining the need for a valuation allowance. In the event we were to determine that we would not be able to realize all or part of our net deferred tax assets in the future, an adjustment to the deferred tax assets valuation allowance would be charged to earnings in the period in which we make such a determination, or goodwill would be adjusted at our final determination of the valuation allowance related to an acquisition within the measurement period. If we later determine that it is more likely than not that the net deferred tax assets would be realized, we would reverse the applicable portion of the previously provided valuation allowance as an adjustment to earnings at such time.

The amount of income tax we pay is subject to ongoing audits by federal, state and foreign tax authorities, which often result in proposed assessments. Our estimate of the potential outcome for any uncertain tax issue is highly judgmental. We account for these uncertain tax issues pursuant to ASC 740, Income taxes, which contains a two-step approach to recognizing and measuring uncertain tax positions taken or expected to be taken in a tax return. The first step is to determine if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. Although we believe we have adequately reserved for our uncertain tax positions, no assurance can be given with respect to the final outcome of these matters. We adjust reserves for our uncertain tax positions due to changing facts and circumstances, such as the closing of a tax audit, judicial rulings, refinement of estimates or realization of earnings or deductions that differ from our estimates. To the extent that the final outcome of these matters is different than the amounts recorded, such differences generally will impact our provision for income taxes in the period in which such a determination is made. Our provisions for income taxes include the impact of reserve provisions and changes to reserves that are considered appropriate and also include the related interest and penalties.

We treat taxes on global intangible low-taxed income (“GILTI”) introduced by the U.S. Tax Cuts and Jobs Act (the “Tax Act”) as period costs. See Note 19 to our consolidated financial statements for further additional information related to our income taxes.

Stock-Based Compensation

We measure the value of stock option awards on the date of grant at fair value using the appropriate valuation techniques, including the Black-Scholes and Monte Carlo option-pricing models. We amortize the fair value over the remaining term on a straight-line basis. We account for forfeitures as they occur. The pricing models require various highly judgmental assumptions including volatility and expected option term. If any of the assumptions used in the models change significantly, stock-based compensation expense may differ materially in the future from that recorded in the current period.

Recently Issued and Not Yet Adopted Accounting Pronouncements under U.S. GAAP

For information on recently issued accounting pronouncements under U.S. GAAP, see Note 3 to our consolidated financial statements

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Goodwill Impairment Testing:

As of December 31, 2020, we had an aggregate amount of goodwill of $123.2 million (of which $37.9 million relates to our Air segment and $85.3 million relates to our Packages, Hotels and Other Travel Products Segment) compared to $47.0 million as of December 31, 2019. The significant increase in goodwill was related to our recent acquisitions of Koin in August 2020 and Best Day in October 2020, which resulted in an aggregate increase of $73.3 million in goodwill.

Our reporting units are components which are one level below our operating segments and are primarily comprised by the country and brand (Despegar, Viajes Falabella and Best Day) where each set of travel products (air and packages, hotels and other travel products) are offered.

We perform our annual assessment of possible impairment of goodwill as of December 31, 2020, or more frequently if events and circumstances indicate that an impairment may have occurred. Due to the COVID-19 pandemic and its impact on our business, we conducted interim impairment assessments of goodwill during the year ended December 31, 2020. We had no impairments of goodwill during the interim periods.

As of December 31, 2020, we recognized an impairment charge of $0.6 million related to the goodwill allocated to one reporting unit (related to our acquisition in 2019 of Viajes Falabella in Argentina). This reporting unit remains at risk although remaining goodwill allocated is not material and amounts to $0.2 million as of December 31, 2020.

We compared the fair value of the reporting units to their carrying values. The fair value estimates for all reporting units were based on a weighted-probability analysis of the present value of future discounted cash flows, Level 3 inputs. The significant estimates used in the discounted cash flows model included our weighted average cost of capital, projected cash flows and the long-term rate of growth. Our assumptions were based on the actual historical performance of the reporting unit and took into account the challenging global industry and market conditions and recent severe and continued weakening of operating results as well as the anticipated rate of recovery, and implied risk premiums based on market prices of our equity and debt as of the assessment dates. The full duration and total impact of COVID-19 remains uncertain and it is difficult to predict how the recovery will unfold for global economies, the travel industry or our business. As a result, we may record impairment charges in the future due to the potential long-term economic impact and near-term financial impacts of the COVID-19 pandemic.

Based on our analysis, we concluded that the estimated fair value for each of our reporting units, as of December 31, 2020, was reasonable. In each case, the estimated fair value exceeded the respective carrying value. We concluded that the goodwill assigned to each reporting unit, as of December 31, 2020, was not impaired and that neither reporting unit was at risk of failing the goodwill impairment test as prescribed under U.S. GAAP.

Operating and Financial Metrics

Our operating results are affected by certain operating metrics, such as number of transactions and gross bookings, which we believe are necessary for understanding and evaluating our company. We also regularly review the following key financial metrics to evaluate our business, measure our performance, identify trends in our business, prepare financial projections and make strategic decisions:

	Year Ended December 31,
	2020		2019		% of Change
	In thousands
Operational Metrics
Number of transactions
By country
Brazil		1,940		4,121		(52.9	)
Argentina		457		2,324		(80.3	)
Mexico		803		1,542		(47.9	)
Other		891		2,691		(66.9	)
Total number of transactions		4,091		10,678		(61.7	)
By segment
Air		2,435		6,220		(60.9	)
Packages, Hotels and Other Travel Products		1,656		4,458		(62.9	)
Total number of transactions		4,091		10,678		(61.7	)

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	Year Ended December 31,
	2020			2019			% of Change
	In thousands
Gross Bookings
By country
Brazil		591,749			1,878,312			(68.5	)
Argentina		206,871			1,027,359			(79,9	)
Mexico		270,870			604,648			(55,2	)
Other		362,845			1,223,874			(70,4	)
Total gross bookings		1,432,335			4,734,193			(69.7	)
Financial Metrics
Consolidated revenues		131,334			524,876			(75.0	)
Consolidated operating loss		(177,217	)		(8,920	)		1,886.7
Consolidated net loss		142,869			20,910			583.3
Consolidated Adjusted EBITDA (unaudited)		(121,813	)		(26,643	)		(557.2	)
Consolidated Adjusted Segment EBITDA:
Air		(32,890	)		3,346			(1,083.0	)
Packages, Hotels and Other Travel
Products		(82,377	)		36,546			(325.4	)
Unallocated		(6,546	)		(13,249	)		(50.6	)

Note: “NM” denotes not meaningful.

Number of Transactions

The number of transactions for a period is an operating measure that represents the total number of travel customer orders completed on our platform in such period. We monitor the total number of transactions, as well as the number of transactions in each of our segments and the number of transactions with travel customers in each of the countries where we operate. The number of transactions is an important metric because it is an indicator of the level of engagement with our travel customers and the scale of our business from period to period but, unlike gross bookings and our financial metrics, the number of transactions is independent of the average selling price of each transaction, which can be significantly influenced by fluctuations in currency exchange rates.

Gross Bookings

Gross bookings is an operating measure that represents the aggregate purchase price of all travel products booked by our travel customers through our platform during a given period. We generate substantially all of our revenue from commissions and other incentive payments paid by our travel suppliers and service fees paid by our travel customers for transactions through our platform, and, as a result, we monitor gross bookings as an important indicator of our ability to generate revenue.

Adjusted Segment EBITDA

For 2020, we have changed our definition of Adjusted Segment EBITDA reported internally to exclude restructuring charges and acquisition costs. We have effected this change retroactively to all years presented in this Annual Report. However, we did not have restructuring charges in either 2019 or 2018 and we did not consummate any acquisitions in 2018.

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We measure our segment’s performance by our Adjusted Segment EBITDA. We use Adjusted Segment EBITDA for purposes of making decisions about allocating resources to our segments and to internally evaluate their financial performance because we believe Adjusted Segment EBITDA reflects current core operating performance of each segment and provides an indicator of each segment’s ability to generate cash.

Adjusted Segment EBITDA is calculated, with respect to each segment, as our net loss adjusted for (1) provision for income taxes; (2) financial income / (expense); (3) stock-based compensation expense; (4) acquisition transaction costs; (5) depreciation and amortization; (6) impairment charges; and (7) restructuring charges. See note 20 to our audited consolidated financial statements for our Adjusted Segment EBITDA information and segment information.

Non-GAAP Financial Measures

Consolidated Adjusted EBITDA

We report Consolidated Adjusted EBITDA as a non-GAAP financial measure. Consolidated Adjusted EBITDA is among the primary metrics by which management evaluates the performance of the business and on which internal budgets are based. Management believes that investors should have access to the same set of tools that management uses to analyze our results. This non-GAAP measure should be considered in addition to results prepared in accordance with U.S. GAAP but should not be considered a substitute for other measures of our financial performance prepared in accordance with U.S. GAAP. Our Consolidated Adjusted EBITDA has certain limitations as an analytical tool, including in that it does not consider the impact of certain expenses to our consolidated statements of income. We endeavor to compensate for the limitation of the non-GAAP measure presented by also providing a reconciliation to the most directly comparable U.S. GAAP measure and a description of the reconciling items and adjustments to derive the non-GAAP measure. Our Consolidated Adjusted EBITDA also excludes certain items related to transactional tax matters, which may ultimately be settled in cash, and we urge investors to review the detailed disclosure regarding these matters included elsewhere in this Annual Report, as well as in the notes to our audited consolidated financial statements. Our Consolidated Adjusted EBITDA may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.

For 2020, we have changed our definition of Consolidated Adjusted EBITDA to exclude restructuring charges and acquisition costs. We have effected this change retroactively to all years presented in this Annual Report. However, we did not have restructuring charges in either 2019 or 2018 and we did not consummate any acquisitions in 2018.

We calculate Consolidated Adjusted EBITDA as net loss adjusted for (1) provision for income taxes; (2) financial income / (expense); (3) stock-based compensation expense; (4) acquisition transaction costs; (5) depreciation and amortization; (6) impairment charges; and (7) restructuring charges.

The above items are excluded from our Consolidated Adjusted EBITDA measure because these items are noncash in nature, or because the amount and timing of these items is unpredictable, or not driven by core operating results and renders comparisons with prior periods and competitors less meaningful. We believe our Consolidated Adjusted EBITDA is a useful measure for analysts and investors to evaluate our future on-going performance as this measure allows a more meaningful comparison of our performance and projected cash earnings with our historical results from prior periods and to the results of our competitors. Moreover, our management uses this measure internally to evaluate the performance of our business as a whole and our individual business segments. In addition, we believe that by excluding certain items, such as stock-based compensation and acquisition-related impacts, Consolidated Adjusted EBITDA corresponds more closely to the cash operating income generated from our business and allows investors to gain an understanding of the factors and trends affecting the ongoing cash earnings capabilities of our business.

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The table below provides a reconciliation of our consolidated net loss to Consolidated Adjusted EBITDA.

	Year Ended December 31,
	2020			2019
	(in thousands)
Consolidated net loss	$	(142,869	)	$	(20,910	)
Add (deduct):
Financial expense/ (income), net		(12,910	)		17,215
Income tax (benefit)		(21,438	)		(5,225	)
Depreciation expense		7,981			6,659
Impairment of long-lived assets and goodwill		1,917			—
Amortization expense		21,699			16,137
Stock-based compensation expense		7,312			11,686
Restructuring and related reorganization charges		13,360			—
Acquisition-related expenses		3,135			1,081
Consolidated Adjusted EBITDA (unaudited)	$	(121,813	)	$	26,643

Components of Results of Operations

Revenue

We offer traditional travel services on a stand-alone and package basis generally either through the pre-pay/merchant or the pay-at-destination/agency business models. We primarily generate revenue as a result of facilitation services, either directly or through the use of affiliated travel agencies. We consider both the traveler and the travel supplier as our customers.

Under the pre-pay/merchant model, we provide travelers access to book hotel rooms, airline seats, car rentals and destination services through our network of travel suppliers. Our travelers pay us for merchant transactions generally when they book the reservation. We pay our travel suppliers later, generally when the travelers use the travel service. Under these transactions, we generally earn a commission from travel suppliers and service fees from travelers. Travel suppliers generally bill us for travel products sold within a 12-month period from the check-out date. We recognize breakage incremental revenue from unbilled amounts when the period expires. Our revenues under the pre-pay/merchant model typically represented more than 75% of our total consolidated revenues for both 2020 and 2019.

Under the pay-at-destination/agency model, travelers pay the travel supplier directly at the destination and travel suppliers pay us our earned commissions at a later date, generally after checkout. We receive service fees from travelers at the time of booking. In any given year, our revenue under the pay-at-destination/agency model represented less than 5% of our total consolidated revenues for both 2020 and 2019.

We seek to develop and maintain long-term relationships with travel suppliers, GDSs and other intermediaries. Our travel supplier management personnel work directly with travel suppliers to optimize access to their travel products for visitors to our platform, including through promotional activity, and maximize our revenue. In most cases, we enter into non-exclusive contracts with our travel suppliers, although in the case of some travel suppliers we may have informal arrangements without written contracts. Typically, supplier payment terms are negotiated on a regular basis. We have a contract with Expedia and its affiliates to offer through our platform hotel and other lodging products. The contract establishes agreed payment terms. In each of the years 2020 and 2019, 6.2% and 8.4% of our gross bookings, respectively, were attributable to supply provided by affiliates of Expedia. For more information about our relationship with Expedia, see “Item 7. Major Shareholders and Related Party Transactions —B. Related Party — Relationship with Expedia” and Note 22 of our audited consolidated financial statements. Given the fragmentation in travel suppliers in our markets, the frequency of negotiations of payment terms and competitive conditions, we have experienced what we consider to be limited volatility related to our arrangements with travel suppliers; however, we cannot assure you that we will not experience more volatility in the future.

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Major sources of revenue

Commissions and service fees

We facilitate travel suppliers the sale of their travel products and services to travelers. We generally receive commissions in consideration for these facilitation services. Generally, we charge a service fee to travelers, although this may vary depending on marketing strategies. We do not provide significant post-booking services to travelers. We consider any post-booking services beyond minor inquiries or minor administrative changes to the reservation (i.e. modifications to the original terms of the reservations) as new bookings. Accordingly, we may charge a new booking fee and administrative fees for these services. Also, if the requested change results in an incremental price of the reservation to the traveler set by the travel supplier, we receive an incremental commission from the travel supplier.

We recognize revenue upon the transfer of control of the promised facilitation services to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for those facilitation services. Generally, we recognize revenue when the booking is completed, paid and confirmed, less a reserve for cancellations based on historical experience.

Given that the travel supplier is primarily responsible for providing the underlying travel services, we do not control the service or travel product provided by the travel supplier to the traveler and we do not bear inventory risk, we present revenue on a net basis for these transactions. Taxes assessed by a government authority, if any, are excluded from the measurement of transaction prices that are imposed on the travel related services or collected from customers (which are therefore excluded from revenue). We present revenue on a gross basis for some bookings only when we pre-purchase flight seats.

We partner with banks to allow our travelers the possibility of purchasing the product of their choice through financing plans established, offered and administered by such banks. Banks bear full risk of fraud, delinquency or default by travelers. When travelers elect to finance their purchases, we typically receive full payment for our services within a short period of time after booking is completed and confirmed, regardless of the payment plan selected by the traveler. However, in certain countries, we receive payment from the bank as installments become due regardless of when traveler actually makes the scheduled payments. In most cases, we receive payment before travel occurs or during travel and the period between completion of booking and reception of scheduled payments is typically one year or less. We have made use of the practical expedient in ASC 606-10-32-18 and we do not adjust the amount of consideration for the effects of a significant financing component. Beginning in late August 2020, we began providing financing to certain risk-profiled travelers only in Brazil. This activity has been very limited to date.

Our revenue from commissions and service fees represented 76.9% and 81.2% of our total consolidated revenues for 2020 and 2019, respectively.

Incentive fees

We may receive incentive fees from our travel suppliers or Global Distribution Services providers when we meet certain performance conditions, for example contractually agreed volume thresholds. We recognize revenue on an accrual basis in accordance with the achievement of contractual thresholds on a case-by-case basis.

Incentive fee revenues represented 13.0% and 13.9% of our total consolidated revenues for 2020 and 2019, respectively.

Advertising

We record advertising revenue ratably over the advertising period or upon delivery of advertising material, depending on the terms of the advertising agreement.

Advertising revenues represented 3.8% and 2.9% of our total consolidated revenues for 2020 and 2019, respectively.

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Other revenue

We also derive revenue from other sources. Our other revenues sources are not material.

In late 2019 we began to operate a loyalty program through which we award loyalty points to travelers who complete purchases on our websites or use the services of other program participants, such bank co-branded credit cards. Loyalty points can be redeemed for free or discounted travel products.

For loyalty points earned through travel product purchases, we apply a relative selling price approach whereby the total amount collected from each travel product sale is allocated between the travel product and the loyalty points earned. The portion of each travel product sale attributable to loyalty points is initially deferred and then recognized in loyalty revenue when the points are redeemed. Due to the recent launch of our loyalty program, lack of historical data and redemption patterns, we recognize breakage when the likelihood of the traveler exercising its remaining rights becomes remote.

For loyalty points earned through co-branded credit card partners, consideration received from the sale of loyalty points is variable and payment terms typically are within 30 days subsequent to the month of sale of loyalty points. Sales of loyalty points to business partners are comprised of two components: loyalty points and marketing (i.e. the use of intellectual property, including our brand and access to customer lists and databases, which is the predominant element in the agreements, as well as advertising, collectively, the marketing component). We allocate the consideration received from these sales of loyalty points based on the relative selling price of each product or service delivered. Accordingly, we recognize the marketing component in other revenue in the period of the loyalty points sale following the sales-based royalty method. The loyalty points component is initially deferred and then recognized in revenue when points are redeemed. This activity has been limited to date.

In October 2020 we began offering our travelers tours, activities and transportation services through a fleet of dedicated vans. We recognize revenue as services are provided. We present revenue on a gross basis for these transactions because we are the primary responsible for providing the underlying travel services.

Revenue from interest earned on financing granted to certain risk-profiled customers in Brazil is recognized over the term of the financing and is based on effective interest rates. This activity has been immaterial and very limited to date.

In the aggregate, these other revenues represented 6.4% and 2.1% of our total consolidated revenues for 2020 and 2019, respectively.

Cost of Revenue

Cost of revenue consists of (1) credit card processing fees, (2) fees that we pay to banks relating to the travel customer financing installment plans that we offer, (3) the costs of operating our fulfillment center, customer service and risk management, (4) costs borne by us as a result of credit card chargebacks, including those related to fraud, (5) claims against us under consumer protection laws, (6) certain transaction-based taxes, other than income taxes (which are included under income tax expense) and sales taxes (which are deducted from our revenue) (7) a portion of overhead expenses distributed based on the percentage of our employees attributable to cost of revenue, and (8) depreciation of property, plant and equipment related to our operation.

Selling and Marketing

Selling and marketing expense is comprised of direct costs, including online marketing such as search engine and social media marketing, and offline marketing, such as television and print advertising. It also includes expenses of our selling and marketing personnel, and related overhead usually distributed based on the percentage of our employees attributable to selling and marketing (for example, rent, facilities, depreciation etc.) Selling and marketing expense also includes commissions paid to certain third-party affiliates for sales that they generate through our systems. Reductions on a per transaction basis are expected to continue as the economy scales. However, the impact on operating contribution will vary with the level of activity and average selling prices.

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General and Administrative

General and administrative expense consists primarily of personnel expenses for management, including both senior management and local managers, and employees involved in general corporate functions, including finance, accounting, tax, legal, human resources and commercial analysts, our stock-based compensation expenses for grants to members of our management team and professional and consulting fees. General and administrative expense also includes a portion of the overhead distributed based on the percentage of our employees attributable to general and administrative (for example, rent, facilities and depreciation). General and administrative expense also includes bad debt expense that we recognize relating to the risk that we are unable to collect receivables from certain travel suppliers. In addition, general and administrative expense includes transaction costs related to our acquisitions, change in fair value of contingent earnout payments, if any, and changes to indemnity assets, if any.

Technology and Product Development

Technology and product development expense includes the costs of developing our platform, as well as information technology costs to support our infrastructure, back-office operations and overall monitoring and security of our networks. This expense is principally comprised of personnel, and depreciation and amortization of technology assets, including hardware, and purchased and internally developed software. Technology and product development expense also includes a portion of the overhead expense for our facilities, based on the percentage of our employees attributable to technology and product development.

We classify our supplier relationships as a component of the products that we offer to our travel customers and, accordingly, our costs of acquiring and maintaining supplier relationships, including the costs of our personnel engaged in supplier relationships, are included as a component of technology and product development expense.

Loss from Equity Investments

We use the equity method to account for investments in companies if our investment provides us with the ability to exercise significant influence, but not control, the operating and financial policies of the investee.

Financial Income / (Expense), net

Our functional currency and the functional currency of certain of our subsidiaries, including our U.S., Uruguay, Ecuador, Venezuela and Argentina (beginning July 1, 2018) subsidiaries, is the U.S. dollar. The functional currency of our other subsidiaries is their respective local currency. Gains and losses resulting from transactions by each subsidiary in non-functional currency are included in financial income / (expense). Financial income / (expense) also includes gains and losses on certain derivative financial instruments that we use from time to time, to manage our exposure to foreign exchange volatility.

In addition, our assets and liabilities are translated from local currencies into dollars at the end of each period. However, any gains and losses resulting from such translations are reflected in our consolidated statement of comprehensive income / (loss) and are not reflected in our consolidated statements of operations. See also “Item 11. Quantitative and Qualitative Disclosures about Market Risk—Foreign Exchange Risk.”

Our financial income and expense also include interest expense on our financial liabilities, interest income on our investments and gains and losses on derivative financial instruments.

Income Tax Expense

We are subject to taxation in the United States and foreign jurisdictions. On December 22, 2017, the United States enacted the Tax Cuts and Jobs Act (“Tax TCJA Act”) that significantly changed U.S. tax law by, among other things, lowering U.S. corporate income tax rates, implementing a territorial tax system, and imposing a one-time transition tax on deemed repatriated earnings of foreign subsidiaries. The Tax Act reduced the U.S. corporate income tax rate from 35% to 21%, effective January 1, 2018.

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Results of Operations

	Year Ended December 31,
	2020						2019
	(in thousands)
				% of Revenue						% of Revenue			% of change
Total revenue	$	131,334			100.0		$	524,876			100.0			(75.0	)
Cost of revenue		(85,518	)		(65.1	)		(179,565	)		(34.2	)		(52.4	)
Gross profit		45,816			34.9			345,311			65.8			(86.7	)
Operating expenses
Selling and marketing		(57,292	)		(43.6	)		(187,894	)		(35.8	)		(69.5	)
General and administrative		(94,722	)		(72.1	)		(92,962	)		(17.7	)		1.9
Technology and product development		(67,043	)		(51.0	)		(73,375	)		(14.0	)		(8.6	)
Impairment of long-lived assets and goodwill		(1,917	)		(1.5	)		—			—			NM
Total operating expenses		(220,974	)		(168.3	)		(354,231	)		(67.5	)		(37.6	)
Equity loss		(2,059	)		(1.6	)		—			—			NM
Operating loss		(177,217	)		(134.9	)		(8,920	)		(1.7	)		1,886.7
Financial income / expense, net		12,910			9.8			(17,215	)		(3.3	)		(175.0	)
Net loss before income taxes		(164,307	)		(125.1	)		(26,135	)		(5.0	)		528.7
Income tax benefit		21,438			16.3			5,225			1.0			310.3
Net loss		(142,869	)		(108.8	)		(20,910	)		(4.0	)		583.3
Net loss attributable to redeemable non-controlling interest		282			0.2			—			—			NM
Net loss attributable to Despegar.com, Corp.	$	(142,587	)		(108.6	)	$	(20,910	)		(4.0	)		581.9

Note: “NM” denotes not meaningful.

Consolidated Revenues

The following table presents our consolidated revenues by business segment:

	Year Ended December 31,
	2020				2019
	(in thousands)
			% of Revenue				% of Revenue		% of change
Revenue
Air	$	62,713		47.8	$	201,638		38.4		(68.9	)
Packages, Hotels and Other Travel Products		68,621		52.2		323,238		61.6		(78.8	)
Total revenue	$	131,334		100.0	$	524,876		100.0		(75.0	)

The following table presents our consolidated revenues by type of revenue:

	Year Ended December 31,
	2020		2019
	(in thousands)
Commissions and service fees	$	100,908	$	426,082
Incentives		17,040		72,912
Advertising		5,040		15,063
Others		8,346		10,819
Total revenue	$	131,334	$	524,876

(1) Net of sales tax.

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For 2020, our consolidated revenues were significantly impacted by the effect of the COVID-19 pandemic on our industry and our operations. Similar to the 61.7% decline in the overall number of transactions and the 69.7% decline in overall gross bookings for 2020, our consolidated revenues decreased $393.5 million, or 75.0 % in 2020 compared to 2019, primarily driven by cancellations and decreased demand for our travel products as a result of the COVID-19 pandemic. The Best Day and Koin acquisitions completed in 2020 contributed $14.2 million to our consolidated revenues. Without the effect of the Best Day and Koin acquisitions, our consolidated revenues would have decreased $407.7 million, or 77.7 %, to $117.2 million in 2020 from $524.9 million in 2019.

Air revenue decreased $138.9 million or 68.9% in 2020 reflecting a 60.9% decline in tickets sold. Packages, Hotels and Other Travel Products decreased $254.6 million or 78.8% in 2020 reflecting a 62.9% decline in overall demand for our mix of travel products. Excluding the effect of the Best Day and Koin acquisitions, Air revenue would have decreased 69.3% in 2020 and Packages, Hotels and Other Travel Products would have decreased 82.9% in 2020.

Our commissions and service fee revenue decreased $325.2 million or 76.3% in 2020, a decrease of 65.3% or $90.3 million in our Air segment and a decrease 81.6% or $234.9 million in our Packages, Hotels and Other Travel Products segment, primarily as a result of the overall decline in travel demand for our mix of travel products due to the COVID-19 pandemic, the impact of contra-revenue related to customer claims and cancellations, macro-economic conditions in our most significant markets (Brazil, Mexico and Argentina) leading to currency devaluations and newly imposed taxes on foreign currency transactions in Argentina, resulting in a decrease in the demand for international bookings in Argentina.

Incentive revenue decreased $55.9 million or 76.6 % in 2020, a decrease of 77.3% or $44.0 million in our Air segment and a decrease of 74.2% or $11.9 million in our Packages, Hotels and Other Travel Products segment, primarily as a result of lower incentives received from airlines, hotels and other travel suppliers reflecting the overall decline in travel volume.

Advertising revenue decreased $10.0 million or 66.5 % in 2020 a decrease of 73.7 % or $5.1 million in our Air segment and a decrease of 60.5 % or $4.9 million in our Packages, Hotels and Other Travel Products segment, due to lower demand for travel advertising.

Other revenue decreased $2.5 million or 22.9 % in 2020, primarily as a result of the decline in travel demand and partially offset by $3.0 million of new destination services offered by the Best Day.

In addition to the above segment and product revenue discussion, our revenue by business model is as follows:

	Year Ended December 31,
	2020		2019
	(in thousands)
Pre-pay model	$	102,591	$	407,258
Pay-at-destination model		1,305		13,130
Other(1)		27,438		104,488
Total revenue	$	131,334	$	524,876

(1) Primarily includes incentives from our travel suppliers, primarily airlines and GDSs.

Cost of Revenue

Cost of revenue decreased $94.0 million during 2020 compared to 2019, primarily due to a $38.1 million decrease in credit card processing fees, a $34.2 million decrease in cost of installments and a $9.5 million decrease in customer fraud and transaction processing errors, all resulting from lower transaction volumes from the impact of the COVID-19

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pandemic, as well as $9.3 million decrease in operating costs due to cost reductions initiatives, partially offset by an increase of $2.7 million in severance costs due to the restructuring costs associated with our cost reduction initiatives.

Excluding the effect of the Best Day and Koin acquisitions, our cost of revenue would have decreased $98.0 million, or 54.6%, to $81.6 million in 2020 from $179.6 million in 2019.

Gross Profit

Gross profit decreased 86.7% from $345.3 million in 2019 to $45.8 million in 2020, due to the COVID-19 pandemic and the challenging macroeconomic conditions in the countries in which we operate, including our main markets, Brazil and Argentina.

As a percentage of revenue, gross profit represented 34.9% in 2020 and 65.8% in 2019. This decrease in 2020 is due to a greater percentage decrease in total revenue of 75.0% compared to the percentage decrease in cost of revenue or 52.4%.

Excluding the effect of the Best Day and Koin acquisitions, our gross profit would have decreased $309.7 million, or 89.7%, to $35.6 million in 2020 from $345.3 million in 2019.

Selling and Marketing

Selling and marketing expense decreased 69.5% to $57.3 million in 2020. The decrease was primarily as a result of the suspension of direct marketing expenses beginning in mid-March 2020, which was part of our broader cost saving measures in connection with the COVID-19 pandemic. The decrease was partially offset by $3.9 million that we incurred in employee severance and benefit expenses due to restructuring costs associated with our cost savings plan.

Excluding the effect of the Best Day and Koin acquisitions, our selling and marketing expenses would have decreased $138.3 million, or 73.6%, to $49.6 million in 2020 from $187.9 million in 2019.

General and Administrative

General and administrative expense increased 1.9% to $94.7 million in 2020. The increase was primarily due to an increase in employee severance expenses of $3.2 million and $0.4 million in office lease termination fees as part of our cost savings plan in response to the COVID-19 pandemic, an increase of $2.2 million in depreciation and amortization expenses from acquired tangible and intangible assets and an increase of $7.2 in credit expected losses directly related to the impact of the COVID-19 pandemic, partially offset by an overall reduction in all corporate expenses, including outsourcing services, personnel expenses and employee benefits.

Excluding the effect of the Best Day and Koin acquisitions, our general and administrative expenses would have decreased $10.1 million, or 10.9%, to $82.9 million in 2020 from $93.0 million in 2019.

Technology and Product Development

Technology and product development expense decreased 8.6% to $67.0 million in 2020. The decrease was primarily as a result of a reduction in technology and product development personnel expense, which was partially offset by $3.2 million that we incurred in employee severances expenses, as part of our cost savings plan in response to the COVID-19 pandemic.

Excluding the effect of the Best Day and Koin acquisitions, our technology and development expenses would have decreased $10.1 million, or 13.8%, to $63.2 million in 2020 from $73.4 million in 2019.

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Impairment Charges

During 2020, as a result of the significant negative impact related to the COVID-19 pandemic, which has had a severe effect on the entire global travel industry, we recognized goodwill impairment charges of $0.6 million as well as intangible asset impairment charges of $1.1 million and property and equipment impairment charges of $0.3 million.

Loss from Equity Investments

During 2020, losses on equity investments were $2.1 million in connection with two associate investments acquired with Best Day. We did not have equity investments in 2019.

Operating loss

In 2020, we had an operating loss of $177.2 million compared to an operating loss of $8.9 million in 2019, primarily due to significant declining revenue in 2020 resulting from the COVID-19 pandemic as well as the restructure and impairment charges mentioned above.

Financial Income / (Expense)

In 2020, we had net financial income of $12.9 million as compared to a net financial expense of $17.2 million in 2019. The change in financial result position was due primarily to lower factoring fees of $13.2 million derived from significantly lower activity impacted by the COVID-19 pandemic and net foreign exchange gains of $11.1 million in 2020 as compared to foreign exchange losses of $7.0 million in 2019.

Income Tax Benefit

Our effective tax rate for the year ended December 31, 2020 was 13%, lower than the weighted average rate of 27% due primarily to the changes in tax rate related to the Promotional Regime enacted in Argentina, which reduced the income tax rate to 15% as from the following year and the reversal of valuation allowances.

Our effective tax rate for the year ended December 31, 2019 was 20%, lower than the weighted average rate of 29% due to the decrease in non-taxable income and the changes in valuation allowances related to our Brazilian subsidiary.

Net loss

In 2020, we had a net loss of $142.9 million compared to a net loss of $20.9 million in 2019 as a result of the factors described above. Excluding the effect of the Best Day and Koin acquisitions, our net loss would have been $127.9 million compared to a net loss of $20.9 million in 2019 as a result of the factors described above.

Net loss attributable to redeemable non-controlling interest

The share of net loss attributable to the redeemable non-controlling interest in our subsidiary Koin was $0.3 million. The activity and results of operations of this subsidiary were not significant in 2020. We did not have a non-controlling interest in 2019.

Net loss attributable to Despegar.com, Corp.

In 2020, we had a net loss of $142.6 million compared to a net loss of $20.9 million in 2019 as a result of the factors described above. Excluding the effect of the Best Day and Koin acquisitions, our net loss attributable to Despegar.com, Corp. would have been $127.6 million compared to a net loss of $20.9 million in 2019 as a result of the factors described above.

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Adjusted Segment EBITDA

	Year Ended December 31,
	2020			2019
	(in thousands)
Air	$	(32,890	)	$	3,346
Packages, Hotels and Other Travel Products		(82,377	)		36,546
Unallocated		(6,546	)		(13,249	)

Adjusted Segment EBITDA is our primary segment operating metric. See Note 20 — Segment Information in the notes to the consolidated financial statements for additional information.

Our Air segment Adjusted EBITDA significantly declined during 2020, resulting in negative Adjusted EBITDA of $(32.9) million compared to positive Adjusted EBITDA of $3.3 million in 2019, resulting from direct impacts of the COVID-19 pandemic, which drove meaningful gross bookings and revenue declines, partially offset by a decline in direct sales and marketing expense.

Our Packages, Hotels and Other Travel Products segment Adjusted EBITDA also significantly declined during 2020, resulting in negative Adjusted EBITDA of $(82.4) million compared to positive Adjusted EBITDA of $36.6 million in 2019, also resulting from significant revenue declines due to the COVID-19 pandemic, partially offset by a decline in direct sales and marketing expense.

Our Unallocated segment Adjusted EBITDA resulted in negative Adjusted EBITDA of $(6.5) million in 2020 as compared to a negative Adjusted EBITDA of $(13.2) million in 2019 primarily due to lower unallocated overhead costs related to our cost reduction initiatives.

B. Financial Position, Liquidity and Capital Resources

Cash Flows

Our principal sources of liquidity are typically cash flows generated from operations, cash available under credit facilities and loan agreements as well as our cash and cash equivalents and short-term investment balances, which were $334.4 million and $309.2 million at December 31, 2020 and 2019, respectively. In addition, as of December 31, 2020, we had restricted cash of $16.1 million, which primarily consisted of amounts held in restricted accounts to secure our obligations to travel suppliers and service providers and the International Air Transport Association (“IATA”).

With the impacts of the COVID-19 pandemic, including the high degree of cancellations and customer refunds, particularly during the first half of the year, and the lower new bookings in the merchant business model, these seasonal influences and the working capital source of cash to us has been significantly disrupted resulting in the Company experiencing unfavorable working capital trends and material negative cash flow in the first half of 2020 with the negative cash flow moderating as booking trends improved and cancellations stabilized during the second half of 2020. The full duration and total impact of COVID-19, and how the recovery will unfold, remains difficult to predict. We expect cash flow to remain negative until the decline in new merchant bookings improves further with cancellations either remaining stable or moderating further. In addition, we are experiencing much shorter booking windows in our lodging businesses, which could also impact the seasonality of our working capital and cash flow.

As of December 31, 2020, our travel accounts payable plus our related party payable and our accounts payable and accrued expenses, minus our trade accounts receivable net of credit expected loss and our related party receivable amounted to aggregate payables of $193.0 million, compared to aggregate payables of $120.1 million as of

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December 31, 2019, with such increase being primarily the result of an increase in cancelled reservations pending payment, which amounted to $90.8 million as of December 31, 2020. In addition, we adopted the strategy to assist our travel customers with refunds and reschedulings, including the issuance of vouchers to be used by our travel customers during 2020 or 2021. If a travel customer does not accept the voucher, according to our standard commercial terms and conditions, the corresponding refund would depend on the regulation of each country, considering as an average typically payable within 120 days from the date the refund is requested.

Our business cash cycle provides a positive source of working capital for our operations. Our pre-pay model allows us to collect cash amounts from transactions with our travel customers well before we are required to make payments to our travel suppliers, which allows us to use the cash for other business purposes in the interim and reduces our need to use external sources of financing. Under our pre-pay model, we receive cash payments through credit card companies used by travel customers at or near the time of booking, and we are required to make payments related to the booking to the relevant travel suppliers generally two to three months afterwards, typically, after the travel customer uses the reservation and the travel supplier invoices us.

As of December 31, 2020, we had deferred merchant bookings of $76.6 million and our working capital (calculated as current assets minus current liabilities, except short-term debt and contingent liabilities) was $135.8 million. At December 31, 2020, our pre-pay model represented 78.1% of our revenues compared to 1% represented by our pay-at-destination model. If our pre-pay model declines relative to our pay-at-destination model or our overall business, or if there are changes to the pre-pay model (such as changes in booking patterns, or travel customer or travel supplier payment terms), our overall working capital benefits could be reduced. In such event, we could be required to obtain additional working capital financing, including using factoring or other financing sources.

Managing our balance sheet prudently and maintaining appropriate liquidity are high priorities during the current COVID-19 pandemic. In order to best position the Company to navigate our current working capital challenges and depressed revenue throughout 2020, we have taken a number of actions to bolster our liquidity and preserve financial flexibility, including:

(i) temporarily reducing salaries of the senior and middle management;

(ii) suspending bonuses to all employees;

(iii) reducing part of our workforce and implementing a hiring freeze and limiting inflation salary increases;

(iv) reducing working hours and implementing unpaid leave in certain locations;

(v) accelerating synergies from acquisitions;

(vi) renegotiating supplier payment terms and conditions;

(vii) reviewing and renegotiating, to the extent possible, all contracts and commitments;

(viii) reducing marketing expenses and

(ix) deferring non-critical capital expenditures.

In connection with the measures implemented due to the COVID-19 pandemic discussed above, we incurred $13.0 million in employee severance expenses during 2020, which were fully paid as of year-end. Based on our plans as of the date of this Annual Report, we expect total severance charges in 2021 decrease. However, we continue to actively evaluate additional cost reduction efforts, and should we make decisions in future periods to take further actions we will incur additional reorganization charges. We also engaged in certain smaller scale restructure actions in 2020 to centralize and migrate certain operational functions and systems, for which we recognized $0.4 million in reorganization charges, which were primarily related to anticipated termination of several office rent contracts.

In August 2020, we entered into an investment agreement with LCLA Daylight LP, an affiliate of L Catterton Latin America III, L.P. (“L Catterton”) and an investment agreement Waha LATAM Investments Limited, an affiliate of Waha Capital PJSC (“Waha Capital”), to raise $200 million in gross proceeds in a private placement of shares of newly created series of preferred stock and warrants to purchase our common stock. The transaction with L. Catterton closed on September 18, 2020 and the transaction with Waha Capital closed on September 21, 2020. These transactions increased our cash position by $187.9 million.

In October 2020, we closed the acquisition of Best Day. The purchase price was fixed at $10.3 million, after application of net indebtedness and working capital adjustments, and will be payable in cash on October 1, 2023. In

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addition, the agreement provides for an earnout for the benefit of certain sellers ranging from $0 to $20 million, based solely on the performance of our share price during a measurement period of six months prior to the fourth anniversary of the closing date. The earnout, if any, will be payable in cash on October 1, 2024.

In 2020 we paid $5.8 million for the second installment of the purchase price for the acquisition of Viajes Falabella. The last remaining installment of $5.8 million is scheduled to be paid in June 2021.

We believe that our existing cash and cash equivalents together with expected cash flows generated from operating activities will be sufficient to meet our currently anticipated cash needs for the next twelve months. As conditions are recent, uncertain and changing rapidly, we cannot assure you that our business will not require additional funds for operating activities in the future, nor whether the conditions of the global economy and financial markets will allow us to access to those financing options, particularly if the effects of the pandemic persist significantly longer.

Our cash flows are as follows:

	Year Ended December 31,
	2020			2019
	(in thousands)
Net cash flows (used in) / provided by operating activities	$	(118,345	)	$	44,238
Net cash flows used in investing activities		(14,743	)		(30,784	)
Net cash flows provided by / (used in) financing activities		173,696			(53,180	)
Effect of exchange rate changes on cash and cash equivalents		(3,767	)		1,181
Net increase / (decrease) in cash and cash equivalents	$	36,841		$	(38,545	)

In 2020, net cash used in operating activities was $118.3 million compared to cash provided by operating activities of $44.2 million for 2019. Impacts from the COVID-19 pandemic, including a sharp decrease in gross bookings and refund obligations for cancelled bookings, have resulted in a significant use of cash to fund working capital expenses and operating losses in 2020 compared to a 2019 cash benefit from working capital.

In 2020, $14.7 million was used in investing activities compared to $30.8 million in 2019 primarily due to lower current year capital expenditures of $17.5 million, including lower spend on internal-developed software and the payment of $5.8 million of the second installment of the purchase price for the acquisition of Viajes Falabella, partially offset by cash acquired in the acquisitions of Best Day and Koin of $8.5 million. Cash used in investing activities in 2019 primarily included a $24.6 million investment in intangible assets, including software and website development costs and $5.9 million in acquired property and equipment.

Cash provided by financing activities in 2020 was $173.7 million primarily due to $187.9 million of net proceeds from the issuance of preferred shares and warrants in September 2020 and partially offset by the net payment of borrowings of $14.3 million and the cash dividend payment of $0.6 million to the Series A Preferred shareholders. In 2020 we did not repurchase any shares under our share repurchase program. Cash used in financing activities in 2019 primarily included a net $11.5 million payment of short-term loans and cash paid to acquire shares of $42.2 million under our share repurchase program.

Foreign exchange rate changes resulted in decreases of our cash balances denominated in foreign currency in 2020 of $3.8 million reflecting a net depreciation in foreign currencies related to the U.S. dollar during the year. Foreign exchange rate changes resulted in an increase of our cash balances denominated in foreign currency in 2019 of $1.2 million.

Indebtedness

Our total indebtedness, including short-term and long-term bank debt, seller financing and promissory notes amounted to $52.0 million as of December 31, 2020 as compared to $29.9 million as of December 31, 2019.

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We have historically maintained a low level of bank debt. As of December 31, 2020, we have outstanding short and long-term debt of $19.3 million as compared to short-term debt of $19.2 million as of December 31, 2019. Our long-term bank debt is denominated in currencies other than the U.S. dollar and matures between 2023 and 2024. As of December 31, 2020, we were in compliance with all covenants.

We also have additional indebtedness related to seller financing for the acquisitions we completed in 2019 and 2020. Our seller financing increased $3.7 million from $10.7 as of December 31, 2019 million to $14.4 million as of December 31, 2020. The increase was primarily related to the seller financing for the Best Day acquisition comprised of a fixed portion and the earnout payment, which values were $8.8 million and $3.8 million as of December 31, 2020, respectively. We will pay the fixed portion in cash on October 1, 2023, and the earnout consideration, if any, will be payable in cash on October 1, 2024. The earnout payment is a variable amount which depends solely on our share price during a measurement period of six months prior to October 1, 2024. The increase in seller financing was partially offset by the payment of the second installment of the seller financing for the Viajes Falabella acquisition for $5.8 million.

In addition, as part of the Best Day acquisition agreement, we legally assumed debt that Best Day had with its prior shareholders. As such, we issued four U.S. dollar denominated promissory notes amounting to $14.5 million as of December 31, 2020. The promissory notes bear interest at a fixed rate of 5% per annum and we will pay them in cash on October 1, 2023.

C. Research and Development, Patents and Licenses

Our technology and product development activities are primarily focused on the development of software, which we view as an important element of the investments we make in our technology and our business. Our primary software development activities have been focused on providing an effective and engaging platform for our travel customers and on collecting and using data to better customize the user experience, pricing and marketing efforts for our travel customers. In 2020 and 2019, we spent $67.0 million and $73.4 million, respectively, on software development and other technology and product development activities.

D. Trend Information

In addition to the information set forth in this section, additional information about the trends affecting our business can be found in “—A. Key Trends and Factors Affecting Our Business.” You should also read our discussion of the risks and uncertainties that affect our business in “Item 3. Key Information—D. Risk Factors.”

Macroeconomic and Political Conditions in the Countries in which we Operate

Our travel customers are primarily located in Latin America, particularly in Brazil, Mexico and Argentina, and to a lesser extent, in other countries in the region. Our results of operations and financial condition are significantly influenced by political and economic developments in the countries in which our travel customers reside and, to a lesser extent, in the countries to which our travel customers may travel, and the effect that these factors may have on the availability of credit, employment rates, disposable income, average wages and demand for travel in those countries. In the mid- to long-term, we believe that macroeconomic changes in the region will generally benefit us due to an expanding middle class, increasing disposable income, reduced unemployment and lower interest rates, among other factors.

Currency Exchange Rates

We report our financial results in dollars, but most of our revenue and expenses are denominated in local currencies. Any changes in the exchange rates of any such currencies against the dollar will affect our reported financial results as translated into dollars. Furthermore, many of our travel customers travel internationally and any changes in the exchange rate between their home currency and the currency of their destination may influence their travel purchases.

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Inflation

Historically, certain countries in Latin America, such as Argentina, have experienced high rates of inflation. Changes in inflation rates can affect our pricing as well as our expenses, including employee salaries, and the inflation rates in the countries where we generate revenue in any period may be higher or lower than the inflation rates in the countries where we incur expenses. In addition, higher inflation may lead our travel customers to make more purchases using installments or other financing options, which may result in an increase in the costs associated with offering such financing options to our travel customers. Below is a summary of certain macroeconomic data for Brazil, Mexico and Argentina, our three largest markets, for 2020 and 2019:

	Brazil
	2020			2019
Real GDP growth (decline)(1)		(4.1	)%		0.6	%
Population (in millions)(1)		211.8			211
Inflation(1)		4.52	%		3.74	%
Exchange rate(2)		5.20			4.03

(1) Source: Instituto Brasileiro de Geografia e Estatistica (IBGE), measured in local currency.

(2) Source: Banco Central do Brasil. Data as of December 31 of each year.

	Argentina
	2020			2019
Real GDP growth (decline)(1)		(11.8	)%		(3.1	)%
Population (in millions)(1)		45.40			44.93
Inflation(1)		36.1	%		53.8	%
Exchange rate(2)		89.25			59.87

(1) Source: Instituto Nacional de Estadistica y Censos (INDEC), measured in local currency.

(2) Source: Banco de la Nación Argentina. Data as of December 31 of each year.

	Mexico
	2020			2019
Real GDP growth (decline)(1)		(8.3	)%		(0.1	)%
Population (in millions)(2)		126.0			—
Inflation(3)		3.15	%		2.83	%
Exchange rate(4)		19.95			18.45

(1) Source: Instituto Nacional de Estadística y Gegrafía (INEGI), measured in local currency.

(2) Source: Instituto Nacional de Estadística y Gegrafía (INEGI). Census information is updated every five years. Latest census was conducted in 2020/

(3) Source: Instituto Nacional de Estadística y Gegrafía (INEGI), measured in local currency.

(4) Source: Banco de México. Data as of December 31 of each year.

E. Off-Balance Sheet Arrangements

As of December 31, 2020, we did not have any material off-balance sheet arrangements.

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F. Tabular Disclosure of Contractual Obligations

The following table represents our contractual commitments as of December 31, 2020:

	Payments Due by Period
	Total		Within 1 Year		2-3 Years		4-5 Years		After 5 Years
Operating lease obligations	$	46,544	$	8,650	$	10,956	$	8,607	$	18,331
Seller financing Viajes Falabella		5,750		5,750		—		—		—
Other long-term liabilities(1)		125,000		—		—		—		125,000
Promissory notes issued		14,490				14,490
Accrued earnout liability		3,765						3,765
Redemption of non-controlling interest(2)		2,880		—		2,880		—		—
Seller financing Best Day Group		8,768				8,768
Total contractual obligations	$	207,197	$	14,400	$	35,094	$	12,372	$	143,331

(1) We may be required to make a termination payment of $125.0 million to Expedia if, among other things: we elect to terminate the Expedia Outsourcing Agreement on or after March 6, 2022; Expedia elects to terminate the Outsourcing Agreement if bookings sourced through Expedia are reduced such that the marketing fees payable back to us fall below $5.0 million over a six-month period; or if a bookings shortfall occurs, for any consecutive three months or any three months within a six-month period. The amount of the termination payment is reflected as a long-term liability on our balance sheet. For more information on our relationship of Expedia, see “Item 7. Major Shareholders and Related Party Transactions —B. Related Party — Relationship with Expedia.”

(2) Pursuant to the Koin acquisition agreement, we have the right to call the non-controlling interest in Koin, and the non-controlling owners have the right to put their interest back to us, assuming we do not exercise our call right, at dates and prices defined in the agreement. The put price is fixed at $2,880.

G. Safe Harbor

See “Part I. Introduction – Forward-Looking Statements.”

ITEM 6 DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. Directors and Senior Management

Board of Directors

Our business and affairs are managed by, or under the direction or supervision of, our board of directors. Our board of directors has all the powers necessary for managing, and for directing and supervising, our business and affairs and may exercise all our company powers and do all such lawful acts and things as are not by applicable law or our memorandum and articles of association required to be exercised or done by our shareholders. Accordingly, our board of directors have significant discretion (and, regarding the vast majority of management and governance matters, exclusive discretion) in the management and control of our business and affairs.

Our board of directors consists of eight members. Our memorandum and articles of association authorize us to have up to eight directors or such other number of directors as is from time to time fixed by resolution of the board.

Our board of directors is divided into three classes designated as the “Class I Directors,” “Class II Directors” and “Class III Directors” plus a director appointed by the L Catterton Purchaser (the “L. Catterton Director”) and director appointed by the Series B Preferred Shareholders (the “Series B Director”). Pursuant to our memorandum and articles of association, each of our directors (other than the L. Catterton Director and Series B Director) is appointed at an annual meeting of shareholders for a period of three years, with each director serving until the third annual meeting of shareholders following his or her election (except that the terms of the current Class I Directors, Class II Directors and Class III Directors will expire at our annual meetings in 2021, 2022 and 2023, respectively). Upon the expiration of the term of a class of directors, candidates will be elected (or re-elected, as the case may be)

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as directors of that particular class for three-year terms at the annual meeting of shareholders in the year of such expiration. Our Class I, II and III Directors are divided among the three classes as follows:

• the Class I Directors are Adam Jay and Michael James Doyle, and their terms will expire at the annual meeting of stockholders to be held in 2021;

• the Class II Directors are Martín Rastellino and Mario Eduardo Vázquez, and their terms will expire at the annual meeting of stockholders to be held in 2022; and

• the Class III Directors are Nilesh Lakhani and Damián Scokin, and their terms will expire at the annual meeting of stockholders to be held in 2023.

Elections for Class I, II and III Directors will take place by a plurality of the votes of the shares present in person or represented by proxy at the annual meeting and entitled to vote on the election of directors. No Class I, II or III Director may be elected or re-elected at any special meeting of our shareholders. Given the current restrictions related to the COVID-19 pandemic, we cannot assure you that we will not be required to delay or adjourn our annual meeting for 2021 or host an annual meeting that shareholders can only attend remotely or by proxy.

The L Catterton Purchaser has the right to appoint the L. Catterton Director so long as the L Catterton Purchaser and its permitted transferees continue to beneficially own (a) (i) at least 75,000 Series A Preferred Shares and (ii) Warrants and/or ordinary shares that were issued upon exercise of the Warrants representing at least 5,500,000 ordinary shares or (b) if the Company shall have redeemed the Series A Preferred Shares in full, Warrants and/or ordinary shares that were issued upon exercise of Warrants representing at least 5,500,000 ordinary shares . The Series B Preferred Shareholders have the right to appoint a director so long as the Waha Purchaser holds Series B Preferred Shares (or ordinary shares issued opened conversion thereof) representing no less than 25,000 Series B Preferred Shares. The L. Catterton Director is Dirk Donath and the Series B Director is Aseem Gupta.

The following table presents the names and ages of the members of our board of directors:

Name	Age	Position
Nilesh Lakhani	61	Chairman of the Board and Director
Damian Scokin	54	Chief Executive Officer and Director
Adam Jay	44	Director
Martín Rastellino	49	Director
Mario Eduardo Vázquez	85	Director
Michael James Doyle II	50	Director
Dirk Donath	54	Director
Aseem Gupta	39	Director

Our board of directors has the exclusive power to fill any vacancy arising on the board from time to time and to increase the size of the board of directors from time to time and appoint additional directors in connection therewith. Our shareholders may not vote to fill any vacancy or to change the size of our board.

A director of the Company may only be removed: (i) with cause, by a resolution approved by shareholders holding not less than two-thirds of the voting rights at a meeting of shareholders called for the stated purpose of removing the director or for stated purposes including the removal of the director, or (ii) with cause, by a resolution approved by directors holding not less than two-thirds of the voting rights of all of those directors entitled to vote on the resolution at a meeting of directors or by way of unanimous written consent of those directors entitled to vote on the removal. See “Item 16G. Corporate Governance—Differences in Corporate Law” for further information.

The following is a brief summary of the business experience of our directors. The current business addresses for our directors is Juana Manso 1069, Floor 5, Ciudad Autónoma de Buenos Aires, Argentina (C1107CBR).

Nilesh Lakhani has served as a member of our board of directors since October 2012 and as chairman of our board of directors since March 2019. Mr. Lakhani served on the board of directors of Netshoes (Cayman) Limited (NYSE:

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NETS) from 2013 to 2019. He also served as an independent director on the board of directors of QIWI plc (Nasdaq: QIWI) from 2013 to 2014. Mr. Lakhani was an Operating Partner at Lumia Capital LLC, an emerging markets focused technology venture fund from 2015 to 2018. He has also held key executive positions with growth companies in the technology, media and financial services industries. From 2010 to 2012, he was the Chief Financial Officer of oDesk Corporation. Prior to that, from 2007 to 2010, he was the Chief Financial Officer of Yandex N.V. (Nasdaq: YNDX). He also served as Chief Financial Officer of CTC Media, Inc. (Nasdaq: CTCM) from 2004 to 2007. Prior to that, Mr. Lakhani was the Chief Financial Officer of Pogo.com, and was Vice President of Global Operations at Electronic Arts after it acquired Pogo.com. Mr. Lakhani also served as senior vice president with Transamerica Corporation from 1991 to 1997, and worked with GE Capital from 1984 to 1991. Mr. Lakhani holds a bachelor’s in Economics from the University of Manchester and an MBA from the University of San Francisco.

Damián Scokin joined Despegar in December 2016 and has served as our Chief Executive Officer (“CEO”) since February 2017 and as a member of our board of directors since April 2017. From November 2014 to November 2016, prior to becoming our CEO, Mr. Scokin was the CEO of Ultrapetrol (Bahamas) Limited (“Ultrapetrol”), where he continues to be a member of the company’s board of directors. Mr. Scokin helped navigate Ultrapetrol through its negotiations with creditors as a result of adverse market conditions in the energy and natural resources sectors, which, subsequent to his departure as CEO of the company, resulted in the filing of a Chapter 11 prepackaged reorganization plan agreement with a U.S. bankruptcy court at the beginning of 2017. From 2005 to 2014, Mr. Scokin held several positions within the LATAM Airlines Group. From 2012 to 2014, Mr. Scokin served as CEO for LATAM’s International Business Unit, where he was in charge of leading the merger and integration process of LAN Airlines, the biggest airline in Chile, and TAM Linhas Aereas, one of Brazil’s leading airlines. Prior to the merger process, Mr. Scokin worked as CEO for the International Business Unit of Lan Airlines in Chile and as CEO for LAN Argentina before that, where he was in charge of the company’s startup and early development in Argentina. Mr. Scokin started his career in 1995 as an associate of Mckinsey & Company in Boston, where he eventually became partner. Mr. Scokin holds a bachelor’s degree in Economics, a bachelor’s degree Industrial Engineering degree from the University of Buenos Aires and a Master of Business Administration from Harvard Business School.

Adam Jay has served as a member of our board of directors since March 2018. Mr. Jay is President at Hotels.com, an Expedia Group, Inc. brand. Mr. Jay joined Expedia Group in February 2012. From 2007 until 2012, he served as VP of Strategy and Global Transformation at Travelport plc. Prior to that, he led Product for Avis Europe plc (now Avis Budget Group) and also spent a number of years at Boston Consulting Group. Mr. Jay currently serves on the board of Checkatrade.com, a UK-based subsidiary of Homeserve plc. Mr. Jay holds an MBA from INSEAD and an MA (Hons) in Politics, Philosophy and Economics from Oxford University.

Martín Rastellino has served as a member of our board of directors since June 2017. Mr. Rastellino is a co-founder of the Company and has been extensively involved in the management of the Company from 1999 until June 2017. He has served as our Chief Operating Officer and Head of Hotels Business, among other key managerial positions. Prior to joining the Company, Mr. Rastellino served as a Manager for Teleglobe in the United States and has also worked as an auditor for Arthur Andersen in Argentina between 1993 and 1997. Mr. Rastellino holds a bachelor’s degree in Public Accounting from the University of Buenos Aires and an MBA from Duke University.

Mario Eduardo Vázquez has served as a member of our board of directors since August 2014. From June 2003 to November 2006, he served as the Chief Executive Officer of Grupo Telefónica in Argentina. Prior to that, Mr. Vázquez worked in auditing for Arthur Andersen for 33 years, including as a partner and general director covering Latin American markets, including Argentina, Chile, Uruguay, and Paraguay. Mr. Vázquez previously taught as a professor of Auditing at the Economics School of the Universidad de Buenos Aires. Mr. Vázquez also serves on the board of directors and is president of the Audit Committee of Globant S.A. (NYSE: GLOB) and MercadoLibre, Inc. (NYSE: MELI) He has also served as a member of the board of directors of Telefónica Argentina S.A., Telefónica Holding Argentina S.A., Telefónica S.A. (Spain), Banco Santander Rio S.A., Banco Supervielle Societe General S.A., and CMF Banco S.A., and as alternate member of the board of directors of Telefónica de Chile S.A. Mr. Vázquez also previously served as a member of the board of directors and as the president of the Audit Committee of YPF, S.A. (NYSE: YPF) Mr. Vázquez holds a bachelor’s degree in Public Accounting from the Universidad de Buenos Aires.

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Michael James Doyle has served as a member of our board of directors since September 2018. Mr. Doyle is the Chief Financial Officer of Nextdoor, a neighborhood social network based in San Francisco, California. He was Chief Financial Officer of Despegar from 2013 until 2018. Prior to becoming our Chief Financial Officer, Mr. Doyle was the Chief Financial Officer of eLong, Inc, a formerly Nasdaq-listed, online travel company in China. Mr. Doyle was the Chief Financial Officer of Expedia Asia Pacific, a division of Expedia, based in Hong Kong and Seattle. Prior to Expedia, Mr. Doyle worked as Chief Financial Officer of Teledesic, a Seattle-based broadband communications company. Mr. Doyle started his career in the investment banking division of Morgan Stanley & Company in New York and Singapore. He also worked in the private equity direct investment group of GIC, Singapore’s sovereign wealth fund. Mr. Doyle holds a bachelor’s degree in Finance from Southern Methodist University and an MBA from Harvard Business School.

Dirk Donath has served as a member of our board of directors since September 2020. Mr. Donath is a Managing Partner at L Catterton focused on Latin America. He was a Senior Managing Director and Partner at Eton Park Capital Management, responsible for private equity and illiquid investment activities in emerging markets. Previously, he was a Founding Partner & Managing Director of Pegasus Capital. Before Pegasus, Mr. Donath was a Partner of McKinsey & Company where he was head of McKinsey’s Latin American Consumer Goods and Retail Practice and also leader of the Latin American Corporate Finance and Strategy Practice. Mr. Donath graduated cum laude with honors from Yale University with a bachelor’s degree in Economics and studied international relations at Oxford University. He also earned an MBA from Harvard Business School.

Aseem Gupta has served as a member of our board of directors since September 2020. Mr. Gupta is a Managing Director at Waha Capital, focused on the Private Investments business. Waha Capital is an Abu Dhabi-based, ADX-listed investment holding company and operates through two divisions, Asset Management and Private Investments, managing proprietary and third-party capital invested across a number of sectors and geographies. Mr. Gupta is responsible for managing strategic proprietary investments, deploying capital in new investments, and delivering successful exits. Prior to joining Waha Capital, Mr. Gupta worked in the Technology, Media and Telecom Investment Banking Team at Deutsche Bank in New York. Mr. Gupta holds an MBA degree from Rice University, and a bachelor’s degree in Computer Engineering from Purdue University.

Executive Officers

The following table lists the current executive officers of our group:

Name	Age	Position
Damián Scokin	54	Chief Executive Officer
Alberto López Gaffney	49	Chief Financial Officer
Mariano Scagliarini	48	General Counsel
Gonzalo García Estebarena	41	Chief Commercial Director
Sebastián Mackinnon	49	Executive VP Travel Partners & Corporate Affairs

The following is a brief summary of the business experience of our executive officers who are not also directors. Unless otherwise indicated, the current business addresses for our executive officers is Juana Manso 1069, 5th Floor, Ciudad Autónoma de Buenos Aires, Argentina (C1107CBR).

Alberto López Gaffney has served as our Chief Financial Officer since November 2018. From 2017 to October 2018, Mr. López Gaffney served as Chief Financial Officer of TGLT, a leading real estate company in Argentina. From 2012 through 2017, he was employed at Itaú BBA as Managing Director & Head of Investment Banking for LatAm ex-Brazil. Prior to that, Mr. López Gaffney worked between 1999 and 2012 with Morgan Stanley, in the Mergers & Acquisitions Group and later as Managing Director & Head of Southern Cone. He began his business career as a business analyst at McKinsey in 1996. Mr. López Gaffneyholds an MBA from Harvard University and a Master in Science in Industrial Engineering from Universidad Católica Argentina.

Mariano Scagliarini has served as our General Counsel since November 2019. From 2013 to 2019, Mr. Scagliarini served as Chief Counsel for LatAm and Iberia at Thomson Reuters. From 2003 to 2013, Mr. Scagliarini served in different positions at Praxair Inc. and Citibank N.A. Mr. Scagliarini holds a bachelor’s degree in Law from Universidad Católica Argentina and a Master of Laws degree from Cornell University.

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Gonzalo García Estebarena has served as our Chief Commercial Director, overseeing Air and Packages, Hotels and Other Travel Products, since September 2017. Prior to joining us, he held several positions at LATAM Airlines Group from 2011 to 2017, including Vice President of International Revenue Management and Global Head of Sales. Prior to that, Mr. García Estebarena was a management consultant with McKinsey & Company from 2003 to 2011. Mr. García Estebarena holds a bachelor’s degree in Electronic Engineering from the Instituto Tecnológico de Buenos Aires (ITBA) and an MBA with Distinction from Harvard Business School.

Sebastián Mackinnon has served as our Executive VP Travel Partners & Corporate Affairs since October 2018. From March until October 2018 he served as interim Country Manager for Brazil Operations, and from December 2015 until March 2018 he served as our Head of Air, with a regional scope. From October 2001 to December 2015, Mr. Mackinnon served in various positions at Diageo plc, an international alcoholic beverages company, mostly recently as General Manager covering Peru, Bolivia and Ecuador. Prior to that, Mr. Mackinnon held various positions at Mondeléz International and Kimberly-Clark Corporation. Mr. Mackinnon holds a bachelor’s degree in Business Administration from the Pontificia Universidad Católica Argentina and an MBA from the CEMA University in Buenos Aires.

Family Relationships

There are no family relationships among any of our directors or executive officers.

B. Compensation

Compensation of Directors and Executive Officers

For the years ended December 31, 2020, 2019 and 2018, the aggregate compensation to the officers and members of our board of directors amounted to $3,525,644, $4,051,274 and $7,235,508, respectively. We did not pay any compensation to the remaining directors in 2020, 2019 and 2018, and did not pay any other cash compensation or benefits in kind to our directors in 2020, 2019 and 2018, other than the equity awards described under “—Equity Incentive Plans.” Our officers receive comparable benefits generally provided to our employees, such as pension, retirement and health insurance coverage, with some variations with regard to company car benefits and levels of health insurance coverage. For information regarding share options and RSUs granted to our current officers and directors, see “—Equity Incentive Plans.”

Equity Incentive Plans

Our board of directors has adopted two stock incentive plans, namely, the 2015 Stock Option Plan (the “2015 Plan”) and the Amended and Restated 2016 Stock Incentive Plan (the “2016 Plan” and, together with the 2015 Plan, the “Plans”). The terms of the 2015 Plan and the 2016 Plan are substantially similar, although no further awards are being granted under the 2015 Plan. The purpose of these plans is to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to employees, outside directors and consultants, and to promote the success of our business. Our board of directors believes that our Company’s long-term success is dependent upon our ability to attract and retain superior individuals who, by virtue of their ability and qualifications, make important contributions to our business.

Pursuant to the Amended and Restated 2016 Stock Incentive Plan, we may grant restricted stock units (“RSUs”) and stock options to our directors, officers and/or employees. As of December 31, 2020, we had 1,919,099 shares of common stock reserved for new stock-based awards under the Amended and Restated 2016 Stock Incentive Plan. We issue new shares to satisfy the exercise or release of stock-based awards.

During 2020, we started issuing RSUs as our primary form of stock-based compensation. During 2020 and 2019, we granted an aggregate of 1,409,680 and 340,565 RSUs to our employees, directors and management. During 2020,

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we did not grant any stock options while during 2019 we granted an aggregate of 225,903 stock options. For more information about our equity-based compensation, see “Item 6. Directors, Senior Management and Employees — B. Compensation.

Administration. The Plans are administered by our board of directors or a committee designated by our board of directors constituted to comply with applicable laws. In each case, our board of directors or the committee it designates will determine the provisions, terms and conditions of each award.

Eligibility. Only employees, outside directors and consultants are eligible for the grant of non-incentive stock options (“NSOs”), and the direct award or sale of shares or RSUs or other share-based awards, in the case of the 2016 Plan. Only employees are eligible for the grant of incentive stock options (“ISOs”). The term “option” as used in this section refers to both NSOs and ISOs.

Moreover, a person who owns more than 10% of the total combined voting power of all classes of our outstanding share capital is not eligible for ISO grants unless (i) the exercise price is at least 110% of the fair market value of a share on the date of the grant and (ii) such ISO by its terms is not exercisable after the expiration of five years from the date of the grant.

Vesting Schedule. Options, other share-based awards and RSUs may be subject to vesting requirements, as set forth in the applicable award agreement. In 2020 we started issuing RSUs as our primary form of stock-based compensation. RSUs vest in thirds on the first, second and third anniversary of issuance. The outstanding stock options will vest over the next 2 years.

Award Agreement. Awards granted under the Plans are evidenced by an award agreement providing for the number of ordinary shares subject to the award, and the terms and conditions of the award.

Transfer Restrictions. Options, other share-based awards and RSUs may not be transferred other than by will or the laws of succession or by gift or domestic relations order to an immediate family member of the optionee or, in the case of options under the 2016 Plan, a trust established by the optionee for the benefit of the optionee and/or one or more of the optionee’s immediate family, and are exercisable during the lifetime of the optionee only by the optionee or by the optionee’s guardian or legal representative.

Exercise of Awards. The term of options may not exceed ten years from the date of grant. The consideration to be paid for our ordinary shares upon exercise of an option will be determined by the stock option plan administrator and may include cash or cash equivalents, a promissory note, ordinary shares, delivery of an irrevocable direction to a securities broker appointed by us to sell the shares and deliver all or part of the proceeds to us, consideration received by us under a cashless exercise program implemented by us, or any other form of payment permitted by applicable law. No cash consideration is required of the recipient in connection with the grant of the RSUs.

Termination of Awards. Where the option agreement permits the exercise of the options granted for a certain period of time following the recipient’s termination of service with us, or the recipient’s disability or death, the options will terminate to the extent not exercised on the last day of the specified period or the last day of the original term of the options, whichever occurs first. Unvested RSUs are forfeited to us upon the recipient’s termination of service with us. Treatment of other share-based awards upon a termination of service are as set forth in the award agreement.

Third-Party Acquisition. If a third-party acquires us through the purchase of all or substantially all of our assets, a merger or other business combination, all outstanding awards will be treated in the manner described in the definitive transaction agreement (or, in the event the transaction does not entail a definitive agreement to which we are party, in the manner determined by our board of directors in its capacity as administrator of the Plans, with such determination having final and binding effect on all parties), which agreement or determination need not treat all awards (or all portions of an award) in an identical manner.

Acceleration: If a third-party acquires us through the purchase of all or substantially all of our assets, a merger or other business combination, and an employee is subject to an involuntary termination without cause within twelve months following the acquisition, all of such employee’s then outstanding RSUs become fully vested.

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Amendment, Suspension or Termination. Our board of directors has the authority to amend, suspend or terminate the Plans at any time and for any reason, without shareholder approval, except to the extent required by applicable law. Unless terminated earlier, the Plans will terminate automatically ten years from the later of (i) the date when the Plan was adopted or (ii) the date when our board of directors approved the most recent increase in the number of shares reserved for issuance; provided that the ability to grant ISOs under the 2016 Plan will terminate on the tenth anniversary of the date when the maximum number of shares reserved for ISOs was approved by our shareholders. As noted above, no further awards will be granted under our 2015 Plan.

C. Board Practices

For information about the date of expiration of the current term of office and the period during which each director and executive officer has served in such office, see “—A. Directors and Senior Management.” For information about contracts for benefits upon termination of employment, see “—B. Compensation.”

Board Committees

Our board of directors may establish committees from time to time with such responsibilities as determined by our board. Members will serve on these committees until their resignation or until otherwise determined by our board. Our board of directors have established an audit committee, as described below.

Audit Committee

Our audit committee consists of Mr. Mario Eduardo Vázquez, Mr. Michael Doyle and Mr. Martín Rastellino, with Mr. Vázquez serving as chair. Messrs. Vázquez, Doyle and Rastellino each satisfy the independence requirements of Rule 10A-3 under the Exchange Act. Our board of directors also has determined that Messrs. Vázquez, Doyle and Rastellino qualify as audit committee financial experts within the meaning of the SEC rules. Our audit committee oversees our accounting and financial reporting processes and the audits of our consolidated financial statements. Our audit committee is responsible for, among other things:

• selecting our independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by our independent auditors;

• regularly reviewing the independence of our independent auditors;

• reviewing all related party transactions on an ongoing basis;

• discussing the annual and quarterly audited consolidated financial statements with management and our independent auditors;

• periodically reviewing and reassessing the adequacy of our audit committee charter;

• meeting separately and periodically with management and our internal and independent auditors;

• reporting regularly to our full board of directors; and

• such other matters that are specifically delegated to our audit committee by our board of directors from time to time.

Nomination and Compensation Committee

In February 2019 our Board of Directors formed a nomination and compensation committee. The nomination and compensation committee is composed of three members, Mr. Dirk Donath, Mr. Nilesh Lakhani and Mr. Martin Rastellino. The nomination and compensation committee is responsible for, among other things:

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• carrying out the Board’s responsibilities in relation to compensation of the Company’s CEO and his direct reports (including plans, policies and programs), overseeing the implementation of the Company’s compensation policy, and providing such guidance with respect to compensation matters as the Committee deems appropriate;

• (i) identifying individuals to become Directors of the Company, (ii) nominating qualified individuals for election to the Board at the annual meeting of shareholders, (iii) recommending to the Board the individual directors to serve on the committees of the Board, and (iv) recommending the Board a set of corporate governance principles applicable to the Company; and

• any such other duties as may be from time to time assigned to it by the Board or required by the rules and regulations of the SEC or the New York Stock Exchange.

Strategy Committee

In May 2019 our board of directors formed a strategy committee. The strategy committee is composed of four members, Mr. Nilesh Lakhani, Mr. Martín Rastellino, Mr. Michael Doyle and Mr. Dirk Donath. The strategy committee is responsible for, among other things:

• assist and consult with the Board of Directors on the objectives for the Company’s strategic plans, and review management’s recommendations with respect to the strategic direction of the Company, oversee management’s implementation of the Company’s strategy and regularly report to the Board of Directors with respect thereto;

• identify significant opportunities and challenges facing the Company, including potential transactions, the impact of external developments and factors on the Company’s corporate strategy and its execution, such as the changes in economic and market conditions, competition in the industry, regulations, among others; and

• Review and make recommendations to the Board of Directors, with respect to any mergers, acquisitions, joint ventures, minority investments, and other strategic investments, as well as financing for those strategic investments in case they require approval of the Board of Directors.

D. Employees

As of December 31, 2020, we had 3,577 employees, including the employees of Best Day. We also contracted with certain third-party providers to support our call center employees. The following tables show a breakdown of our employees as of December 31, 2020, 2019 and 2018 by category of activity.

	Number of Employees as of December 31,
Division/Function	2020		2019		2018
Operations and customer service		1,146		1,150		1,349
Sales and marketing		1,025		355		263
Technology and content		778		1,172		1,227
General and administrative(1)		628		352		559
Total		3,577		3,029		3,398

(1) Includes business development, administration, finance and accounting, legal and human resources.

As of December 31, 2020, 380 of our employees in Argentina and all of our employees in Brazil were represented by labor unions. We believe that our relations with our employees are good and we implement a variety of human resources practices, programs and policies that are designed to hire, retain, develop and compensate our employees.

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We have attracted and retained outstanding individuals over the years and we strive to bring more talent by hiring individuals with internet-related experience. We believe our future success will depend on our ability to attract and retain capable professionals.

E. Share Ownership

The following table sets forth information regarding the beneficial ownership of our ordinary shares as of March 31, 2021 by (1) each of our directors and executive officers and (2) all of our directors and executive officers as a group.

In computing the number of ordinary shares beneficially owned by a person or entity and the percentage ownership of that person or entity, we deemed to be outstanding all ordinary shares subject to options or RSUs held by that person or entity that are currently exercisable or that will become exercisable or vested, as applicable, within 60 days of March 31, 2021. We did not deem these shares outstanding, however, for the purpose of computing the percentage ownership of any other person or entity. Unless otherwise indicated, the address of each beneficial owner listed in the table below is Juana Manso 1069, 5 Floor, Ciudad Autónoma de Buenos Aires, Argentina (C1107CBR).

	Outstanding Ordinary Shares as of March 31, 2021
Name of Beneficial Owner	Number			%
Directors and Executive Officers:
Nilesh Lakhani(1)		47,462	*
Damián Scokin(2)		—			—
Adam Jay		—			—
Martín Rastellino(3)		474,627	*
Mario Eduardo Vázquez(4)		18,393	*
Michael Doyle II(5)		77,147	*
Dirk Donath		—			—
Aseem Gupta		—			—
Alberto Lopez Gaffney(6)		51,416	*
Mariano Scagliarini(7)		—			—
Gonzalo García Estebarena(8)		—			—
Sebastián Mackinnon(9)		38,309	*
Directors and Executive Officers as a Group (13 persons)		972,549			1.3	%

* Represents beneficial ownership of less than 1%.

(1) Consists of 47,462 ordinary shares held by Mr. Lakhani, Chairman and member of our board of directors. Mr. Lakhani also holds 8,041 RSUs which will vest on January 1, 2022; provided that Mr. Lakhani remains in continuous service as an employee, director or consultant of the Company through each applicable date. See “Item 6—B. Compensation.”

(2) Mr. Scokin, our Chief Executive Officer, holds options for the issuance of 86,901 shares that will vest in three equal installments in December 2021, 2022 and 2023 and 301,957 RSUs that will vest in three equal installments in December 2021, 2022 and 2023; in each case provided that Mr. Scokin remains in continuous service as an employee, director or consultant of the Company through each applicable date. See “Item 6—B. Compensation.” Mr. Scokin is our Chief Executive officer and a member of our board of directors.

(3) Consists of 5,212 ordinary shares held by Mr. Rastellino, 469,415 ordinary shares held by Birbey S.A. Mr. Rastellino has sole voting and dispositive control over such shares and directly or indirectly owns 100% of the share capital of Birbey S.A. Mr. Rastellino also holds 6,031 RSUs which will vest on January 1, 2022; provided that Mr. Rastellino remains in continuous service as an employee, director or consultant of the Company through each applicable date. See “Item 6—B. Compensation.”

(4) Consists of 18,393 ordinary shares held by Mr. Vázquez, a member of our board of directors. Mr. Vázquez also holds 6,031 RSUs which will vest on January 1, 2022; provided that Mr. Vázquez remains in continuous service as an employee, director or consultant of the Company through each applicable date. See “Item 6—B. Compensation.”

(5) Consists of 77,147 ordinary shares held by Mr. Doyle, a member of our board of directors. Mr. Doyle also holds 4,021 RSUs which vest on January 1, 2022; provided that Mr. Doyle remains in continuous service as an employee, director or consultant of the Company through such date. See “Item 6—B. Compensation.”

(6) Consists of 51,416 ordinary shares held by Mr. Lopez Gaffney, our Chief Financial Officer. Mr. Lopez Gaffney also holds: options for the issuance of 34,310 ordinary shares: which will vest in two equal installments on December 1, 2021 and 2022 and 82,896 RSUs which will vest in five equal installments on June 1, 2021, December 1, 2021, June 1, 2022, December 1, 2022 and December 1, 2023; in each case provided that Mr. Lopez Gaffney remains in continuous service as an employee, director or consultant of the Company through each applicable date. See “Item 6—B. Compensation”.

(7) Mr. Scagliarini, our General Counsel, holds 12,369 RSUs which will vest in five equal installments on June 1, 2021, December 1, 2021, June 1, 2022, December 1, 2022 and December 1, 2023; in each case provided that Mr. Scagliarini remains in continuous service as an employee, director or consultant of the Company through each applicable date. See “Item 6—B. Compensation.”

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(8) Mr. Estebarena,, our Chief Commercial Director, holds options for the issuance of 58,597 which will vest in two equal installments on December 1, 2021 and on December 1, 2022 and 27,452 RSUs which will vest in five equal installments on June, 2021, December 1, 2021, June 1, 2022, December 1, 2022 and December 1, 2023; in each case provided that Mr. García Estebarena remains in continuous service as an employee, director or consultant of the Company through each applicable date. See “Item 6—B. Compensation.”

(9) Consists of 38,309 ordinary shares held by Mr. Mackinon, our Executive VP Travel Partners & Corporate Affairs. Mr. Mackinon also holds: options for the issuance of 26,241 ordinary shares which will vest in two equal installments on December 1, 2021 and on December 1, 2022 and 81,107 RSUs which will vest in five equal installments on June 1, 2021, December 1, 2021, June 2022, December 1, 2022, and December 1, 2023; in each case provided that Mr. Mackinon remains in continuous service as an employee, director or consultant of the Company through each applicable date. See “Item 6—B. Compensation.”

For information regarding share options and RSUs held by the persons listed above, see “—Equity Incentive Plans.”

ITEM 7 MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A. Major Shareholders

The following table sets forth information regarding the beneficial ownership of our ordinary shares as of March 31, 2021 by each person known to us to beneficially own more than 5% of any class of our outstanding voting securities.

In computing the number of ordinary shares beneficially owned by a person or entity and the percentage ownership of that person or entity, we deemed to be outstanding all ordinary shares subject to options or RSUs held by that person or entity that are currently exercisable or that will become exercisable or vested, as applicable, within 60 days of March 31, 2021. We did not deem these shares outstanding, however, for the purpose of computing the percentage ownership of any other person or entity.

	Outstanding Ordinary Share as of March 31, 2021
Name of Beneficial Owner	Number		%
% Shareholders:
LCLA Daylight LP(1)		11,000,000		13.58
Expedia, Inc.(2)		9,590,623		11.84
Tiger Global Management LLC(3)		9,256,550		11.71
Waha LATAM Investments Limited(4)		5,405,405		7.20
Dorsey Asset Management LLC(5)		4,255,213		5.95
Arisaig Global Emerging Markets Consumer Fund (Singapore) Pte Ltd.(6)		3,856,160		5.51

(1) Based on Schedule 13D filed with the SEC on September 23, 2020. Consists of ordinary shares issuable upon exercise by LCLA Daylight LP of warrants to purchase up to 11,000,000 ordinary shares. CALA2 Managers, Ltd. is the sole general partner of LCLA Daylight LP. Scott A. Dahnke and Dirk Donath are members of the managing board of CALA2 Managers Ltd. Accordingly, such shares may be deemed to be beneficially owned by CALA2 Managers Ltd., Mr. Dahnke and Mr. Donath. Mr. Dahnke and Mr. Donath disclaim beneficial ownership of such ordinary shares. The principal business address of LCLA Daylight LP, CALA2 Managers, Ltd. and Mr. Donath is c/o Catterton Latin America Management Co., 30 Rockefeller Plaza, Suite 5405, New York, NY 10112. The principal business address of Mr. Dahnke is 599 West Putnam Avenue, Greenwich, CT 06830.

(2) Consists of ordinary shares held by Expedia, Inc., a Washington corporation, a direct wholly owned subsidiary of Expedia Group, Inc., a Delaware corporation. The principal business address for Expedia Inc. is 333 108th Avenue NE, Bellevue, WA 98004.

(3) Based on Schedule 13-F filed with the SEC on February 16, 2021. The principal business address of Tiger Global Management, LLC, 9 West 57th Street, 35th Floor, New York, NY 10019.

(4) Based on the Schedule 13D filed with the SEC on March 1, 2021. Consists of 50,000 Series B Preferred Shares held by Waha LATAM Investments Limited representing 5,405,405 ordinary shares on an as-converted basis. The Series B Preferred Shares are convertible, at the option of the holders, at any time into ordinary shares at an initial conversion price of $9.251 per share and an initial conversion rate of 108.1081 ordinary shares per Series B Preferred Share, subject to certain anti-dilution adjustments. Waha Latam Investments Limited is a wholly owned subsidiary of Waha Capital PJSC. Accordingly, Waha Capital PJSC may be deemed to share beneficial ownership of the securities held of record by Waha Latam Investments Limited. The principal business address of each of the entities named in this footnote is 42 / 43 Floor Etihad Towers, Tower 3, Abu Dhabi, United Arab Emirates.

(5) Based on the Schedule 13G/A filed with the SEC on February 16, 2021. Dorsey Asset Management LLC is the direct owner of and has sole dispositive power over 4,255,213 ordinary shares. The principal business address of Dorsey Asset Management LLC is 150 North Wacker Dr., Suite 960, Chicago, Illinois 60606.

(6) Based on the Schedule 13G/A filed with the SEC on February 12, 2021. Arisaig Global Emerging Markets Consumer Fund (Singapore) Pte Ltd. is the holder of record of 3,856,160 ordinary shares. Such shares may deemed to be beneficially owned by Arisaig Partners (Mauritius) Ltd., its investment manager, and Arisaig Partners (Asia) Pte Ltd., its sub-investment manager. The principal business address for eah of Arisaig Global Emerging Markets Consumer Fund (Singapore) Pte Ltd. and Arisaig Partners (Asia) Pte Ltd. is 6 Lorong Telok, #02-01 Singapore 049019. The business address for Arisaig Partners (Mauritius) Ltd. is IFS Court, Bank Street, TwentyEight Cybercity, Ebene 72201 Mauritius.

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Significant Changes in Percentage Ownership

Except as disclosed below, to our knowledge, there has been no significant changes in the percentages of ownership held by the major shareholders listed below.

On May 3, 2017, the stockholders of our predecessor, Decolar.com, Inc., a Delaware corporation, exchanged their shares for newly issued ordinary shares of Despegar.com, Corp. to create a BVI holding company.

On March 6, 2015, Expedia purchased 9,590,623 shares of common stock (the “2015 Expedia Shares”) from our predecessor, Decolar.com, Inc., representing 16.4% of its capital stock, for an aggregate purchase price of $270.0 million.

On September 19, 2017, we completed our initial public offering on the New York Stock Exchange. We sold an aggregate of 14,685,500 ordinary shares (including 10,578,931 ordinary shares sold by us, including the full exercise of the over-allotment option by the underwriters to purchase up to an additional 1,915,000 ordinary shares, and 4,106,569 ordinary shares sold by our selling shareholders). The price per ordinary share was $26.00. In this initial public offering, Tiger Global sold 3,356,020 ordinary shares, reducing its ownership percentage from 57.3% to 43.7%. In turn, in the context of this initial public offering, Expedia was diluted from 16.4% to 13.9%.

On August 9, 2018, the Company´s board of directors approved a share repurchase program that enabled the Company to repurchase up to $75 million of its shares effective immediately and expiring in one year. During 2018 and 2019, the Company repurchased 1,544,475 ordinary shares with a weighted average cost per share of $16.84, and 1,525,632 shares with a weighted average cost per share of $13.54, respectively.

On August 21, 2018, the SEC declared effective our registration statement on Form F-1, which was filed for the purposes of registering ordinary shares for Tiger Global, our largest shareholder at the time and an affiliate of Jason Lenga, a member of our board of directors, pursuant to which Tiger Global could elect to make in-kind distributions to its members, partners or shareholders or otherwise dispose of the ordinary shares owned by Tiger Global. Such registration statement was amended pursuant to a post-effective amendment on Form F-3, which was declared effective by the SEC on December 19, 2018.

On August 1, 2019, the Company’s board of directors approved a new share repurchase that enables the Company to repurchase up to $100 million of its shares. The program became effective on August 8, 2019, and expired one year thereafter. Share repurchases may be undertaken through a variety of methods, including pursuant to trading plans adopted in accordance with Rule 10b5-1 of the Exchange Act, or through open market or privately negotiated transactions, in accordance with applicable law. During 2019, the Company repurchased 1,938,200 ordinary shares with a weighted average cost per share of $11.13.

On August 20, 2020, the Company, entered into the L Catterton Investment Agreement with the L Catterton Purchaser. The Company agreed to issue and sell to the L Catterton Purchaser, pursuant to the Catterton Investment Agreement, 150,000 shares of the Company’s newly created Series A Preferred Shares, without par value (the “Series A Preferred Shares”), and warrants to purchase 11 million of the Company’s ordinary shares, without par value, for an aggregate purchase price of $150 million. At the closing of the Catterton Investment Agreement on September 18, 2020, the Company issued 150,000 Series A Preferred Shares and the Warrants to the L Catterton Purchaser. As of the date of this Annual Report, the L. Catterton Purchaser has not exercised the Warrants.

On August 20, 2020, Despegar entered into the Waha Investment Agreement with the Waha Purchaser. The Company agreed to issue and sell to the Waha Purchaser, pursuant to the Waha Investment Agreement, 50,000 shares of the Company’s newly created Series B Preferred Shares, without par value (the “Series B Preferred Shares”), for an aggregate purchase price of $50 million. At the closing of the Waha Investment Agreement on September 21, 2020, the Company issued 50,000 Series B Preferred Shares to the Waha Purchaser. The Series B Preferred Shares are convertible, at the option of the holders, at any time into ordinary shares at an initial conversion

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price of $9.251 per share and an initial conversion rate of 108.1081 ordinary shares per Series B Preferred Share, subject to certain anti-dilution adjustments. As of the date of this Annual Report, the 50,000 Series B Preferred Shares would be convertible into 5,405,405 ordinary shares.

B. Related Party Transactions

Relationship with Expedia

Expedia Outsourcing Agreement

We entered into the Expedia Outsourcing Agreement with affiliates of Expedia on March 6, 2015. The agreement has been amended and restated, most recently on November 14, 2019. Expedia is the beneficial owner of 11.84% of our ordinary shares outstanding as of March 31, 2021.

Substantially all of the hotel and other lodging reservations that we offer through our platform for all countries outside Latin America are provided to us by Expedia pursuant to the Expedia Outsourcing Agreement. Under the agreement, Expedia is also the preferred provider to us of hotel and other lodging reservations inside Latin America.

Pursuant to the Expedia Outsourcing Agreement, Expedia pays monthly marketing fees to us, which are calculated as a percentage of the gross booking value of the bookings that we sourced through Expedia during that month. We are required to maintain a level of bookings through Expedia such that those marketing fees equal at least $5.0 million in a six-month period; otherwise, Expedia may require us to pay a $125.0 million termination fee. For 2020 and 2019, marketing fees paid by Expedia to us under the Expedia Outsourcing Agreement, net of fees we paid to Expedia under the Despegar Outsourcing Agreement (described below), amounted to $7.1 million and $38.8 million, which represented 5.4% and 7.3% of our consolidated revenue for the year, respectively. From time to time, under the Expedia Outsourcing Agreement, our fees have been supplemented by one-time incentives paid to us for reaching certain booking targets during a specified time period. As of December 31, 2020, our payables to Expedia under the Expedia Outsourcing Agreement were $19.4 million. For more information, see note 22 to our consolidated financial statements.

Given the uncertainty caused by the ongoing COVID-19 pandemic, we cannot assure you that we will be able to meet this requirement in the future. As a result, on August 20, 2020, we entered into an amendment with respect to the Expedia Outsourcing Agreement (the “Outsourcing Agreement Amendment”), whereby the parties agreed, among other things, to waive Expedia’s termination rights under the Expedia Outsourcing Agreement relating to minimum bookings requirements through December 31, 2021, subject to certain conditions.

In addition, the agreement was amended and restated on November 14, 2019 in order to, among other things, allow us to source hotel bookings without Expedia on certain pre-agreed properties outside of Latin America, which transactions are limited to an agreed percentage of the transactions we source outside of Latin America. If such transactions exceed the agreed percentage threshold during a six-month period, we may be required to pay Expedia compensation; and if our non-Expedia sourced bookings outside of Latin America exceed the agreed percentage of gross bookings outside of Latin America for two consecutive quarters, or an agreed higher percentage threshold in one quarter, Expedia may elect to become our exclusive provider outside of Latin America once again. If such transactions exceed an agreed percentage of the minimum booking percentage set forth therein for any three consecutive months or any three months within a six-month period, then Expedia may require us to pay a $125.0 million termination fee.

The term of the Expedia Outsourcing Agreement automatically renews annually unless terminated in accordance with its terms, including (1) by mutual consent or by a party in the case of a material breach by the other party (with a $125.0 million termination payment if terminated by Expedia due to our breach or our failure to meet certain minimum performance requirements), (2) unilaterally by us without cause after March 6, 2022 upon payment to Expedia of a $125.0 million termination payment, and (3) unilaterally by Expedia in the event of a change of control of our Company. A change of control under the agreement is defined as the sale, lease or transfer of all or substantially all of our assets to or acquisition of more than 50% of voting or economic power in our Company or any parent of our Company by an entity in the consumer or corporate travel industry or an internet-enabled provider

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of travel search or information services. Unilateral termination of the Expedia Outsourcing Agreement by us as described in (2) above, in addition to triggering the termination payment, also gives Expedia the right to sell the 2015 Expedia Shares back to us for fair market value under the Shareholder Agreements described below.

We may also terminate the agreement if Expedia ceases to hold all of the 2015 Expedia Shares unless the disposition of those shares was (1) approved by a majority of members of our Board of Directors that were not designated by Expedia, (2) involuntary or (3) the result of an action taken by us or any of our affiliates.

The foregoing description of the Expedia Outsourcing Agreement, as amended and restated by means of document executed on November 14, 2019, is qualified in its entirety by reference to the full text of Expedia Outsourcing Agreement filed as Exhibit 10.1 to this Annual Report. The foregoing description of the Amendment to the Outsourcing Agreement is qualified in its entirety by reference to the full text of the Amendment to the Outsourcing Agreement filed as Exhibit 10.2 to this Annual Report.

Despegar Outsourcing Agreement

We entered into the Despegar Outsourcing Agreement with certain affiliates of Expedia on August 17, 2016. Under the Despegar Outsourcing Agreement, we are required to make our hotel reservations available to certain affiliates of Expedia. The relevant Expedia Affiliate receives compensation equal to a percentage of the revenue earned by us from the property owner.

The agreement has a three-year term that automatically renews for one-year periods, unless either party elects not to renew. We are required to indemnify Expedia and/or its affiliates for losses derived from end user claims. However, if during any contract year Expedia and/or its affiliates suffer losses derived from end user claims exceeding 1% of the annual aggregate room price of the bookings made by the Company during such year, we may terminate the agreement.

As of December 31, 2020, our receivables with Expedia under the Despegar Outsourcing Agreement were $8.2million.

The foregoing description of the Despegar Outsourcing Agreement is qualified in its entirety by reference to the full text of the Despegar Outsourcing Agreement, which is filed as Exhibit 10.3 to this Annual Report.

Shareholder Agreements

We are party to the following agreements with certain of our shareholders: (i) the Sixth Amended and Restated Investors’ Rights Agreement, dated as of August 29, 2017, by and among the Company, Birbey S.A., Expedia and the other parties thereto (the “Sixth Amended and Restated Investors’ Rights Agreement”) and (ii) the Fourth Amended and Restated Voting Agreement dated as of August 29, 2017, by and among the Company, Expedia and the other parties thereto. For purposes of this Annual Report we refer to the Sixth Amended and Restated Investors’ Rights Agreement and the Fourth Amended and Restated Voting Agreement as the “Shareholder Agreements.” The Shareholder Agreements provide Expedia with the rights and obligations described below.

Expedia Preemptive Rights

As long as Expedia beneficially owns at least 5% of our share capital (calculated on a fully-diluted basis), it has preemptive rights to purchase newly issued shares to maintain its percentage ownership in all future offerings by us of our shares or of securities convertible into, or exchangeable or exercisable for, any of our shares, subject to certain limited exceptions.

Expedia Put Right

We are required to buy back from Expedia, or in certain circumstances facilitate the sale of, the 2015 Expedia shares for fair market value, if we exercise our right to terminate the Expedia Outsourcing Agreement on or after March 6, 2022 and make the required termination payment of $125.0 million to Expedia in connection therewith. If we remain

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a public company with securities traded on a recognized securities exchange at the time we receive notice that Expedia is exercising its put right, then we are required to (1) use our best efforts to prepare and file with the SEC a registration statement covering the 2015 Expedia Shares, (2) request, in conjunction with Expedia, quotes from five internationally-recognized underwriting banks for a firm and fully underwritten sale of the 2015 Expedia Shares and (3) assist Expedia in its sale of the 2015 Expedia Shares on a recognized securities exchange or market or otherwise. If the 2015 Expedia Shares cannot be sold in this manner, we are required to purchase the 2015 Expedia Shares at the highest quoted price then available from the aforementioned underwriting banks. If we are no longer a public company with securities traded on a recognized securities exchange, fair market value will be a price agreed upon by the Company and Expedia or, if the parties cannot agree, a price determined through the assistance of third-party valuation experts.

Expedia Non-Solicitation Restriction

Expedia is also prohibited from soliciting certain of our employees, and vice versa, until one year after Expedia beneficially owns less than 10% of our share capital. A similar non-solicitation covenant applies during the term of the Expedia Outsourcing Agreement.

Expedia Director Business Opportunities

Subject to applicable confidentiality obligations, directors who have or currently serve as directors, officers, employees or agents of Expedia (the “Expedia Directors”) are not precluded from referring potential business opportunities in which we could have an interest to Expedia. If the Expedia Directors do so, we would be considered to have renounced our interest in such opportunity, unless the opportunity in question was presented to the director solely in his or her capacity as our director or for our benefit, in which case it can only be referred to Expedia if a majority of our board of directors (excluding the Expedia Directors) has formally declined the opportunity pursuant to a resolution.

Expedia Director Potential Conflicts of Interest

The Expedia Directors may be excluded from the relevant portion of any board or committee meeting or relevant resolutions of directors relating to any transaction, agreement or arrangement with respect to which (1) Expedia or any of its affiliates is a counterparty or has a material economic interest in the counterparty or (2) in the reasonable opinion of a majority of the members of the board that are not designated or nominated by, or employed by, Expedia or any of its affiliates, there would exist a conflict of interest between the interests of Expedia or its affiliates, on the one hand, and our interests, on the other (conflict of interest is defined for such purpose as a specific material economic or competitive interest of Expedia or any of its affiliates in a potential transaction, agreement or arrangement of the Company would be reasonably likely to materially impair the independence or objectivity of the Expedia Directors in the discharge of their responsibilities and duties to the Company, in light of their affiliation to Expedia).

Registration Rights

Expedia is entitled to two demand registrations as long as it owns 5% or more of our outstanding ordinary shares (calculated on a fully-diluted basis). Moreover, any other party to our Shareholder Agreements that owns 10% or more our outstanding ordinary shares (calculated on a fully-diluted basis) is also entitled to two demand registrations. We are also required to effect up to two registrations on Form F-3 in any twelve-month period, upon the request of any such shareholders that own 10% or more of our outstanding ordinary shares (calculated on a fully-diluted basis). The Shareholder Agreements also provide the shareholders party thereto with customary piggyback registration rights. Moreover, we are required to pay certain expenses relating to such registrations and indemnify such shareholders against certain liabilities that may arise under the Securities Act. In addition, as previously described, we may also be required to facilitate the sale by Expedia of the 2015 Expedia Shares. In connection with the Amendment to the Expedia Outsourcing Agreement, on August 20, 2020 Despegar and Expedia entered into a letter agreement with Expedia (the “Letter Agreement”), extending Expedia’s registration rights under the for a period of two years beyond the expiration date of September 22, 2022

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The foregoing description of the Sixth Amended and Restated Investors’ Rights Agreement is qualified in its entirety by reference to the full text of the Sixth Amended and Restated Investors’ Rights Agreement, which is filed as Exhibit 4.1 to this Annual Report. The foregoing description of the Fourth Amended and Restated Voting Agreement is qualified in its entirety by reference to the full text of the Fourth Amended and Restated Voting Agreement, which is filed as Exhibit 4.3 to this Annual Report. The foregoing description of the Letter Agreement is qualified in its entirety by reference to the full text of the Letter Agreement, which is filed as Exhibit 4.3 to this Annual Report.

Expedia Nominating Agreement

In connection with the Outsourcing Agreement Amendment and waivers granted by Expedia of certain rights set forth in the Sixth Amended and Restated Investors’ Rights Agreement, on October 21, 2020 the Company entered into a Nominating Agreement with Expedia (the “Nominating Agreement”) that grants Expedia the right to designate one individual to be a nominee for election to the board of directors of the Company.

As of the date of this Annual Report, one of the members of the board of directors of the Company, Adam Jay, whose term expires at the annual meeting of the Company’s stockholders to be held in 2021, was nominated by Expedia. Therefore, Expedia is not entitled to nominate a director under the Nominating Agreement until Mr. Jay no longer serves on the board of directors of the Company.

The foregoing description of the Nominating Agreement is not complete and is qualified in its entirety by reference to the full text of the Nominating Agreement, which is filed as Exhibit 4.4 to this Annual Report.

Catterton Registration Rights Agreement

Pursuant to the Catterton Investment Agreement, the Company and the L Catterton Purchaser entered into a Registration Rights Agreement (the “Registration Rights Agreement”), pursuant to which the L Catterton Purchaser is entitled to customary registration rights with respect to the ordinary shares for which the Warrants may be exercised.

The foregoing description of the Registration Rights Agreement is not complete and is qualified in its entirety by reference to the full text of the Shelf Registration Rights Agreement, which is filed as Exhibit 4.5 to this Annual Report.

Waha Registration Rights Agreement

Pursuant to the Waha Investment Agreement, the Company and the Waha Purchaser entered into a Shelf Registration Rights Agreement (the “Shelf Registration Rights Agreement), pursuant to which the Company is required to file a Registration Statement on Form F-3 covering the resale of the ordinary shares for which the Series B Preferred Shares may be converted. Such Registration Statement on Form F-3 was declared effective by the SEC on March 17, 2021.

The foregoing description of the Shelf Registration Rights Agreement is not complete and is qualified in its entirety by reference to the full text of the Shelf Registration Rights Agreement, which is filed as Exhibit 4.6 to this Annual Report.

Statement of Policy Regarding Transactions with Related Persons

Our board of directors has adopted a written statement of policy regarding transactions with related persons, which we refer to as our “related person policy.” Our related person policy requires that a “related person” (as defined as in paragraph (a) of Item 404 of Regulation S-K) must promptly disclose to our general counsel any “related person transaction” (defined as any transaction that is anticipated would be reportable by us under Item 404(a) of Regulation S-K in which we were or are to be a participant and the amount involved exceeds $120,000 and in which any related person had or will have a direct or indirect material interest) and all material facts with respect thereto. The head of compliance will then promptly communicate that information to our board of directors. No related

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person transaction will be executed without the approval or ratification of our board of directors. It is our policy that directors interested in a related person transaction will recuse themselves from any vote of a related person transaction in which they have an interest. Our policy does not specify the standards to be applied by directors in determining whether or not to approve or ratify a related person transaction and we accordingly anticipate that these determinations will be made in accordance with principles of the laws of the BVI generally applicable to directors of a BVI company.

C. Interests of Experts and Counsel

Not applicable.

ITEM 8 FINANCIAL INFORMATION

A. Consolidated Statements and Other Financial Information

See Exhibits.

Legal Proceedings

See “Item 4. Information on the Company — Business Overview — Legal Proceedings.”

Dividend Policy

In 2020, 2019 and 2018, no dividends were declared or paid on our ordinary shares or on the common stock of our predecessor, Decolar.com, Inc. We currently intend to retain our available funds and future earnings, if any, to finance the development and growth of our business and operations as well as expand our business and do not currently anticipate paying dividends on our ordinary shares in the near future.

The declaration, amount and payment of any future dividends will be at the sole discretion of our board of directors, subject to compliance with applicable BVI laws regarding solvency. Our board of directors will take into account general economic and business conditions, our financial condition and results of operations, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions and other implications on the payment of dividends by us to our shareholders or by our subsidiaries to us, and such other factors as our board of directors may deem relevant.

As we are a holding company, we rely on dividends paid to us by our subsidiaries for our cash requirements, including funds to pay any dividends and other cash distributions to our shareholders, service any debt we may incur and pay our operating expenses. Our ability to pay dividends to our shareholders will depend on, among other things, the availability of dividends from our subsidiaries.

Under BVI law, our board of directors may authorize payment of a dividend to shareholders at such time and of such an amount as they determine if they are satisfied on reasonable grounds that immediately following the dividend the value of our assets will exceed our liabilities and we will be able to pay our debts as they become due. There is no further BVI statutory restriction on the amount of funds which may be distributed by us by dividend.

Pursuant to our memorandum and articles of association:

• Subject to the Company satisfying the solvency test described above, our board of directors may authorize payment of a dividend or other distribution at such time and of such an amount and pursuant to such method or methods of payment or other distribution as it thinks fit. A dividend or other distribution may be paid wholly or partly by the distribution of specific assets (which may consist of our shares or securities of any other entity) and our board of directors may settle all questions concerning such distribution. Without limitation, our board of directors may fix the value of such specific assets, may determine that cash payments shall be made to some shareholders in lieu of specific assets and may vest any such specific assets in a liquidating or other trust on such terms as our board of directors thinks fit.

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• Our board of directors may deduct from any dividend or other distribution payable to any shareholder any or all monies then due from such shareholder to us.

• All dividends and other distributions unclaimed for three years after having been declared may be forfeited by a resolution of directors for the benefit of the Company. All unclaimed dividends and other distributions may be invested or otherwise made use of by our board of directors for the benefit of the Company pending claim or forfeiture as aforesaid. No dividend or other distribution shall bear interest against the Company.

• A dividend or other distribution made to a shareholder at a time when, immediately after the dividend or other distribution, the value of the Company’s assets did not exceed its liabilities and the Company was not able to pay its debts as they fell due, is subject to recovery in accordance with the provisions of the BVI Act.

Each Series A Preferred Share confers on the holder the right to dividends on each Series A Preferred Share, accruing at a rate of 10.0% per annum and payable semi-annually in arrears. Each Series B Preferred Share confers on the holder: the right to dividends on each Series B Preferred Share, accruing at a rate of 4.0% per annum and payable quarterly in arrears;

B. Significant Changes

There has been no significant subsequent event following the close of the last financial year up to the date of this Annual Report that is known to us and requires disclosure in this Annual Report for which disclosure was not made in this Annual Report.

ITEM 9 THE OFFER AND LISTING

A. Offer and Listing Details

Our ordinary shares trade on the New York Stock Exchange since September 19, 2017 under the symbol “DESP”.

B. Plan of Distribution

Not applicable.

C. Markets

Our ordinary shares trade on the New York Stock Exchange under the symbol “DESP”.

D. Selling Shareholders

Not applicable.

E. Dilution

Not applicable.

F. Expenses of the Issue

Not applicable.

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ITEM 10 ADDITIONAL INFORMATION

A. Share Capital

Not applicable.

B. Memorandum and Articles of Association

We are a BVI business company incorporated with limited liability and our affairs are governed by the provisions of our memorandum and articles of association, as amended and restated from time to time, and by the provisions of applicable BVI law, including the BVI Act.

Our company number in the BVI is 1936519. As provided in regulation 4 of our memorandum of association, subject to BVI law, we have full capacity to carry on or undertake any business or activity, do any act or enter into any transaction and, for such purposes, full rights, powers and privileges. Our registered office is at Commerce House, Wickhams Cay 1, P.O. Box 3140, Road Town, Tortola, British Virgin Islands and our registered agent is Conyers Trust Company (BVI) Limited of Commerce House, Wickhams Cay 1, P.O. Box 3140, Road Town, Tortola, British Virgin Islands.

The transfer agent and registrar for our ordinary shares is Computershare Trust Company, N.A., which maintains the register of members of the Company at 480 Washington Boulevard, Jersey City, NJ 07310, USA. The shares of the Company are held in uncertificated (book-entry) form and no shareholder has the right to require issuance or provision to it at any time of any share certificate.

The following is a summary of the material provisions of our share capital and our memorandum and articles of association. This discussion does not purport to be complete and is qualified in its entirety by reference to our memorandum and articles of association filed as Exhibit 3.1 hereto.

Ordinary Shares

The following summarizes the rights of holders of our ordinary shares. Each ordinary share confers on the holder:

a) the right to one vote at a meeting per share on all matters to be voted on by shareholders generally, including the election of directors at an annual meeting of the shareholders;

b) the right to an equal share in any dividend paid by the Company and payable in respect of our ordinary shares and as may be declared from time to time by our board of directors out of funds legally available for that purpose, if any; and

c) upon our liquidation, dissolution or winding up, the right to an equal share in the distribution of the surplus assets of the Company available to the ordinary shareholders, but subject in each case to the rights attaching to any additional class or classes of shares (including any preferred shares) that may be authorized and issued after the closing date of our initial public offering. Our ordinary shares do not confer cumulative voting rights.

Series A Preferred Shares

The following summarizes the rights of holders of our Series A Preferred Shares. Each Series A Preferred Share confers on the holder:

a) the right to dividends on each Series A Preferred Share, accruing at a rate of 10.0% per annum and payable semi-annually in arrears.

b) the right to one vote per share on any matter on which holders of Series A Preferred Shares are entitled to vote separately as a class, whether at a meeting or by written consent; and

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c) upon our liquidation, dissolution or winding up, a preferential right to the distribution of the surplus assets of the Company.

The prior written approval of the holders of a majority of the Series A Preferred Shares outstanding at such time, acting together as a separate class, is required in order for the Company to (i) amend the memorandum and articles of association in a manner that adversely affects the holders of Series A Preferred Shares, (ii) create or issue any shares ranking senior or pari passu to the Series A Preferred Shares, or any securities convertible or exchangeable into, or exercisable for shares, ranking senior or pari passu to the Series A Preferred Shares or issue any additional Series A Preferred Shares or increase the authorized number of Series A Preferred Shares, other than as permitted in the memorandum and articles of association, (iii) declare or pay any dividend or distribution, or repurchase or redeem any shares, subject to certain exceptions, including with respect to the Series A Preferred Shares, (iv) make any fundamental change in the nature of the business in which the Company is primarily engaged, (v) initiate, engage in or permit to occur (to the extent within the control of the Company), any liquidation, dissolution or winding up of the Company, (vi) continue or re-domicile the Company in any jurisdiction other than the British Virgin Islands, or (vii) take or permit certain of the foregoing with respect to the significant subsidiaries of the Company.

So long as the L Catterton Purchaser holds any Series A Preferred Shares, the prior written consent of the L Catterton Purchaser is required in order for the Company to (i) incur any indebtedness for borrowed money in excess of the greater of (x) $60 million, and (y) an amount equal to 1.0x the Company’s consolidated Adjusted EBITDA for the twelve month period ending at the end of the last quarter for which the Company has publicly reported financial results, subject to certain exceptions, (ii) sell, dispose of or enter into any exclusive license for any material asset (or group of related assets) of the Company or with a fair market value equal or greater to 10% of the Company’s consolidated total assets and (iii) enter into certain affiliate transactions, in each case subject to certain exceptions.

At any time on or after September 18, 2025, each holder of Series A Preferred Shares may, at its election, cause the Company to redeem all or part of such holder’s then outstanding Series A Preferred Shares in cash at a price equal to the liquidation preference, plus, without duplication, accrued and unpaid distributions to, but excluding, the redemption date. In addition, if the Company undergoes a qualifying change of control, each holder of Series A Preferred Shares may, at its election, cause the Company to redeem all of such holder’s then outstanding Series A Preferred Shares in cash at a price equal to 110.0% of the liquidation preference, plus, without duplication, accrued and unpaid distributions to, but excluding, the redemption date.

Series B Preferred Shares

The following summarizes the rights of holders of our Series B Preferred Shares. Each Series B Preferred Share confers on the holder:

a) the right to dividends on each Series B Preferred Share, accruing at a rate of 4.0% per annum and payable quarterly in arrears;

b) the right to vote on an as-converted basis on all matters to be voted on by shareholders generally, including, but not limited to, the election of directors at an annual meeting of the shareholders;

c) the right to an equal share in any dividend paid by the Company and payable in respect of our ordinary shares and as may be declared from time to time by our board of directors out of funds legally available for that purpose, if any; and

d) upon our liquidation, dissolution or winding up, a preferential right to the distribution of the surplus assets of the Company.

The Series B Preferred Shares will be convertible, at the option of the holders, at any time into ordinary shares at an initial conversion price of $9.251 per share and an initial conversion rate of 108.1081 ordinary shares per Series B Preferred Share, subject to certain anti-dilution adjustments. At any time from September 21, 2023, if the volume

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weighted average price of the ordinary shares exceeds certain thresholds for at least 10 consecutive trading days, the Series B Preferred Shares will be convertible into the relevant number of ordinary shares set forth in the memorandum and articles of association, at the election of the Company.

At any time on or after September 21, 2027, the Company may redeem all of the Series B Preferred Shares in cash at a price equal to the sum of (i) (x) the initial stated value of $1,000 per Series B Preferred Shares plus (y) any accrued and unpaid dividends plus (ii), without duplication, any accrued and unpaid distributions to, but excluding, the redemption date.

Additional Shares

Our board of directors may determine the rights, privileges, restrictions and conditions attaching to each such class of preferred shares (which may be more favorable than those attaching to the ordinary shares), as the board of directors may determine in its sole and absolute discretion (subject always to obtaining any approval required in respect of the consent, veto or approval rights assigned to the holders of Series A Preferred Shares and/or the Series B Preferred Shares in the memorandum and articles of association), including without limitation:

• the number of shares constituting the additional class of preferred shares;

• the dividend and other distribution rights of the class of preferred shares and, (which may be payable in preference to, or in relation to, the dividends payable on our ordinary shares or any other class or classes of shares);

• whether the class of preferred shares shall have voting rights and, if so, whether they shall vote separately or together as a single class with the ordinary shares and/or any other class of shares;

• whether the class of preferred shares shall have conversion and/or exchange rights and privileges and, if so, the terms and conditions of such conversion and/or exchange;

• whether the class of preferred shares shall impose conditions and restrictions upon the business and affairs of the Company and/or any of its subsidiaries or the right to approve and/or veto certain matters and/or to appoint and/or remove one or more directors of the Company; and

• the rights of the preferred shares in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, including, without limitation, any liquidation preference and whether such rights shall be in preference to, or in relation to, the comparable rights of the ordinary shares or any other class or classes of shares.

Limitation on Liability and Indemnification Matters

Under BVI law, each of our directors, in exercising his powers or performing his duties, is required to act honestly and in good faith and in what the director believes to be in our best interests, is required to exercise his powers as a director for a proper purpose, may not act, or agree to us acting, in a manner that contravenes the BVI Act or our memorandum or articles of association, and is required to exercise the care, diligence and skill that a reasonable director would exercise in the same circumstances (taking into account, but without limitation, the nature of the company; the nature of the decision; and the position of the director and the nature of the responsibilities undertaken by him).

Our memorandum and articles of association provide that, to the fullest extent permitted by law, the Company is authorized to provide indemnification of (and advancement of expenses to) directors, officers and agents of the Company (and any other persons to which the Company is permitted to provide indemnification under applicable law) through provisions in the memorandum and articles of association, agreements with such directors, officers agents or other persons, vote of disinterested directors or otherwise, subject only to limits created by the BVI Act.

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Our memorandum and articles of association provide that the Company shall indemnify against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings any person who: (a) is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil, criminal, administrative or investigative, by reason of the fact that the person is or was a director, an officer or a liquidator of the Company; or (b) is or was, at the request of the Company, serving as a director, officer or liquidator of, or in any other capacity is or was acting for, another body corporate or a partnership, joint venture, trust or other enterprise; provided that such indemnification shall not apply unless the person claiming such indemnification acted honestly and in good faith and in what he believed to be the best interests of the Company and, in the case of criminal proceedings, the person had no reasonable cause to believe that his conduct was unlawful.

We may pay any expenses, including legal fees, incurred by any such person in defending any legal, administrative or investigative proceedings in advance of the final disposition of the proceedings. If a person to be indemnified has been successful in defense of any proceedings referred to above, the person is entitled to be indemnified against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred by the person in connection with the proceedings.

We may purchase and maintain insurance in relation to any person who is or was a director, an officer or a liquidator of the Company, or who at the request of the Company is or was serving as a director, an officer or a liquidator of, or in any other capacity is or was acting for, another body corporate or a partnership, joint venture, trust or other enterprise, against any liability asserted against the person and incurred by the person in that capacity, whether or not we have or would have had the power to indemnify the person against the liability as provided in memorandum and articles of association.

Shareholders’ Meetings and Consents

The following summarizes certain relevant provisions of BVI laws and our memorandum and articles of association in relation to our shareholders’ meetings:

• Our memorandum and articles of association contemplate two types of shareholders’ meetings, namely:

○  an annual meeting of shareholders (each an “annual meeting”); and

○  any meeting of shareholders which is not an annual meeting (each a “special meeting”).

• Only the board of directors may convene an annual meeting. All annual meetings shall be held at such date, time and place, either within or outside the BVI, as shall be determined from time to time by the board of directors. The business of an annual meeting shall be the election and re-election of directors for those board seats whose terms expire at such meeting and any other items of business proposed by the board of directors and/or otherwise duly proposed by eligible shareholders in accordance with the memorandum and articles of association.

• Special meetings may only be called: (i) by the board of directors at its own initiative; or (ii) by the board of directors upon receiving a compliant written request from a shareholder or shareholders entitled to exercise at least 30% of the voting rights in respect of the matter for which the meeting is requested. Upon receipt of a compliant requisition notice, the board of directors shall convene the requested special meeting for a date not later than 90 days after the date of receipt of the requisition notice, provided the various restrictions, conditions and provision of information and other procedural requirements set out in the memorandum and articles of association have been met by the requisitionists. A special meeting may be held at such date, time and place, within or outside the BVI, as shall be stated in the notice of the meeting.

• Director elections and re-elections by shareholders may occur only at annual meetings (not special meetings) and then only in respect of those board seats whose terms expire at such meeting.

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Nominations of persons for election or re-election as directors of the Company at an annual meeting may only be made by (i) the board of directors; or (ii) any shareholder (or shareholders collectively) other than any holder of Series A Preferred Shares (for so long as such holder has the right to appoint the L. Catterton Director) or Series B Preferred Shares (for so long as such holder has the right to appoint the Series B Director), holding not less than 3% of the voting rights that may be exercised at the annual meeting entitled to attend and vote at such meeting, provided the various restrictions, conditions and provision of information and other procedural requirements set out in the memorandum and articles of association have been met by the nominating shareholders. The board of directors also retains discretion to veto inappropriate candidates nominated by shareholders for election as a director in certain enumerated circumstances, including (a) where the candidate is not qualified, does not have the necessary experience, has a conflict of interest or is otherwise unsuitable or unfit for office; and (b) where an appointment may adversely affect the Company’s (and/or its subsidiaries’ respective) reputation or business; or would result in the Company not having the required number of independent directors for its audit committee; or would result in the Company losing its “foreign private issuer” status.

• Written notice of any shareholder meeting shall be given to each shareholder entitled to vote at such meeting and each director not fewer than 10 nor more than 120 days before the date of the meeting. The inadvertent failure or accidental omission to give notice of a meeting to, or the non-receipt of a notice of a meeting by, any person entitled to receive notice shall not invalidate the shareholder meeting or the proceedings at that meeting. A meeting of shareholders held in contravention of such notice requirements is valid if shareholders holding at least 90% of the total voting rights on all the matters to be considered at the meeting have waived notice of the meeting and, for this purpose, the presence of a shareholder at the meeting shall be deemed to constitute waiver on his part.

• A shareholder may be represented at a meeting of shareholders by a proxy who may speak and vote on behalf of the shareholder.

• A meeting of shareholders is duly constituted and quorate if, at the commencement of the meeting, there are present in person or by proxy holders of not less than a simple majority of the votes of the shares entitled to vote on the resolutions to be considered at the meeting. If within two hours from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of shareholders, shall be dissolved; in any other case it shall stand adjourned to such other date, time and place as the chairman may determine and announce at the meeting (without the need for any further notice to shareholders). At any such adjourned meeting at which a quorum shall be present or represented, any business may be transacted that might have been transacted at the meeting as originally notified. If the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each shareholder of record entitled to vote at the meeting.

• A resolution of shareholders is valid only if approved at a duly constituted and quorate meeting of shareholders by the affirmative vote of a simple majority (or such greater majority as may be specified in respect of a particular matter in the memorandum and articles of association) of the votes of those shareholders present at the meeting and entitled to vote and voting on the resolution. Shareholders are prohibited from adopting resolutions by written consent and all resolutions of the shareholders need to be adopted at a meeting of our shareholders convened in accordance with our memorandum and articles of association.

• In addition, in order to nominate candidates for election as a director at an annual meeting or propose topics for consideration at an annual meeting or special meeting of shareholders, shareholders must notify the Company in writing prior to the meeting at which directors are to be elected or the proposals are to be acted upon, and such notice must contain the documentation and information specified in our memorandum and articles of association. To be timely, notice with respect to an annual meeting of shareholders must be received by not later than the close of business on the 90th day, nor earlier than the close of business on the 120th day, prior to the first anniversary of the preceding year’s annual

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meeting (provided that if the Company did not have an annual meeting the preceding year not later than the close of business on June 30 of the calendar year in which the annual meeting is to be held or such other date notified to shareholders by the board of directors). In the case of any business or other matter to be considered at a special meeting of shareholders, notice of such business or other matter must be included with the original requisition notice. Various other restrictions, conditions and provision of information and other procedural requirements set out in the memorandum and articles of association shall also apply. Such advance notice requirements and other provisions may preclude or limit the ability of shareholders to nominate candidates for election as a director or propose topics for consideration at a meeting of shareholders. Furthermore, our board of directors may in certain circumstances veto candidates proposed by shareholders (as described in the fourth bullet point in this section).

C. Material Contracts

For information regarding material contracts, see “Item 7. Major Shareholders and Related Party Transactions —B. Related Party.”

D. Exchange Controls

The following paragraphs summarize the exchange rates and exchange controls of Brazilian reais and Argentine pesos. See “Item 3. Key Information — D. Risk Factors—Risks Related to Latin America—Exchange rate fluctuations against the dollar in the countries in which we operate could negatively affect our results of operations” and “We are subject to foreign currency exchange controls in certain countries in which we operate” for more information.

Brazil

The Brazilian foreign exchange system allows the purchase and sale of foreign currency and the international transfer of Brazilian reais by any person or legal entity, regardless of the amount, subject to certain regulatory procedures.

The Brazilian real depreciated against the dollar from mid-2011 to early 2016. In 2015, the Brazilian real depreciated 47.0% reaching R$3.9048 per dollar on December 2015. In 2016, the Brazilian real fluctuated significantly, primarily as a result of Brazil’s political instability, but appreciated 16.54%, reaching R$3.2591 per $1.00 on December 31, 2016. In 2017, the Brazilian Real depreciated 1.5% relative to the U.S. dollar, and in 2018, such depreciation reached 17.1% relative to the dollar. In 2019, the Brazilian Real depreciated 4% relative to the U.S. dollar. In 2020, the Brazilian Real depreciated 29% relative to U.S. dollar.

The Brazilian Central Bank has intervened occasionally in the foreign exchange market to attempt to control instability in foreign exchange rates. We cannot predict whether the Brazilian Central Bank or the Brazilian government will continue to allow the Brazilian real to float freely or will intervene in the exchange rate market by re-implementing a currency band system or otherwise. The Brazilian real may depreciate or appreciate substantially against the dollar in the future. Furthermore, Brazilian law provides that, whenever there is a serious imbalance in Brazil’s balance of payments or there are reasons to foresee a serious imbalance, temporary restrictions may be imposed on remittances of foreign capital abroad. We cannot assure you that the Brazilian government will not place restrictions on remittances of foreign capital abroad in the future.

On December 31, 2020, the exchange rate was R$ 5.20 per $1.00.

Argentina

From April 1, 1991 until the beginning of 2002, Law No. 23,928 (the “Convertibility Law”) established a regime under which the Argentine Central Bank was obliged to sell dollars at a fixed rate of one Argentine peso per dollar. On January 6, 2002, the Argentine Congress enacted Law No. 25,561 (as amended and supplemented, the “Public Emergency Law”), formally ending the regime of the Convertibility Law, abandoning over ten years of dollar-Argentine peso parity and eliminating the requirement that the Argentine Central Bank’s reserves in gold, foreign currency and foreign currency-denominated debt be at all times equivalent to 100% of the monetary base.

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The Public Emergency Law, which has been extended on an annual basis and is in effect until March 2021, has granted the Argentine government the power to set the exchange rate between the Argentine peso and foreign currencies and to issue regulations related to the foreign exchange market. The Argentine Central Bank has had the power to intervene in the exchange rate market by buying and selling foreign currency for its own account, a practice in which it has engaged on a regular basis. Since 2011, the Argentine government has increased controls on exchange rates and the transfer of funds into and out of Argentina.

With the tightening of foreign exchange controls beginning in late 2011, in particular with the introduction of measures that restricted access to foreign currency for private companies and individuals, the implied exchange rate, as reflected in the quotations for Argentine securities that trade in foreign markets, compared to the corresponding quotations in the local market, increased significantly over the official exchange rate.

After several years of moderate variations in the nominal exchange rate, in 2012 the Argentine peso lost approximately 14% of its value with respect to the dollar. This was followed in 2013 and 2014 by a devaluation of the Argentine peso with respect to the dollar that exceeded 30%, including a loss of approximately 23% in January 2014. In 2015, the Argentine peso lost approximately 52% of its value with respect to the dollar, including a 10% devaluation from January 1, 2015 to September 30, 2015 and a 38% devaluation during the last quarter of the year, mainly concentrated after December 16, 2015 when certain exchange controls were lifted.

The Argentine peso depreciated 51%, 59% and 40% during 2018, 2019 and 2020, respectively.

On December 31, 2020, the exchange rate was AR$ 84.08 per $1.00.

Exchange Controls in Argentina

The enactment of the Public Emergency Law in 2002, among other things, authorized the Argentine government to implement a foreign exchange system and to enact foreign exchange regulations. Within this context, on February 8, 2002, pursuant to Decree No. 260/2002, the Argentine government (1) created the FX Market through which all transactions involving the exchange of foreign currency must be conducted, and (2) established that all foreign exchange transactions shall be made at the freely agreed exchange rate and in compliance with the requirements and regulations of the Argentine Central Bank (the main aspects of which are described below).

On June 9, 2005, by means of Decree No. 616/2005, the Argentine government established that (1) all inflows of funds into the FX Market arising from foreign debts incurred by Argentine residents, both individuals or legal entities of the private financial and non-financial sector, excluding export-import financings, and primary issues of debt securities sold through public offering and traded in authorized markets; (2) currency remittances made by non-Argentine-residents into the domestic foreign exchange market for the following purposes: holdings of Argentine currency, purchases of any kind of financial assets or liabilities of the financial or non-financial private sector, excluding direct foreign investments and primary issues of debt securities and shares sold through public offering and traded in self-regulated markets; and investments in public sector securities purchased in secondary markets, shall meet the following requirements: (a) currency remittances into the domestic foreign currency market shall only be transferred abroad upon the lapse of 365 calendar days computed as from the date of settlement of such funds into Argentine pesos (the “Minimum Stay Period”); (b) the proceeds of the exchange of the funds so remitted shall be deposited into an account in the local banking system; (c) an amount equal to 30.0% of the relevant amount shall be deposited in a registered, non-transferable and non-interest bearing account for a period of 365 calendar days, under the conditions established in the applicable regulations; and (d) such deposit shall be made in dollars with Argentine financial institutions, it shall not accrue any interest or other profit and shall not be used as security or collateral for any kind of credit transaction.

Any breach of the provisions of Executive Decree No. 616/05 or any other foreign exchange regulation is subject to criminal sanctions.

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However, to date, the requirements set forth in (a), (c) and (d) above have been mitigated through resolutions issued by the Ministry of Treasury and Public Finance. On December 18, 2015, through Resolution No. 3/2015, the Ministry of Treasury and Public Finance amended Executive Decree No. 616/2005, reducing (i) the deposit percentage to zero and (ii) reducing the Minimum Stay Period from 365 to 120 calendar days. On January 5, 2017, through Resolution No. 1/2017, the Ministry of Treasury reduced the Minimum Stay Period to zero. In addition, on August 8, 2016, the Argentine Central Bank, by means of Communication “A” 6037, introduced material changes to the foreign exchange regime in force, which significantly eased access to the FX Market.

Furthermore, on May 19, 2017, the Argentine Central Bank issued Communication “A” 6244, which entered into effect on July 1, 2017, and pursuant to which new regulations regarding access to the foreign exchange market were established, essentially abrogating all prior regulations on the matter. Pursuant to these new regulations: (i) the principle of a free foreign exchange market is set. In accordance with section 1.1 of the communication, “All human or legal persons, assets and other universals may freely operate in the exchange market”; (ii) the obligation to carry out any exchange operation through an authorized entity (section 1.2) is maintained; (iii) restrictions regarding hours to operate in the FX Market, are eliminated; (iv) the obligation of Argentine residents to comply with the “Survey of foreign liabilities and debt issuances” (Communication “A” 3602 as supplemented) and the survey of direct investment (Communication “A” 4237 and complementary) are maintained, even if there has been no inflow of funds to the MULC and/or no future access to the MULC for operations to be declared; and (v) the obligation of Argentine residents to transfer to Argentina and sell in the FX Market the proceeds of their exports of goods within the applicable deadline remains in force.

Afterwards, by means of Decree No. 27/2018, dated January 11, 2018, the Free Exchange Market (“MELI” as per its acronym in Spanish) was created, as a replacement of the MULC, for purposes of providing additional flexibility to the market, enabling competition and allowing for the entry of new operators into the foreign exchange market, thus reducing systemic costs. Exchange operations will be conducted through the MELI by financial entities and other participants authorized by the Central Bank. On June 18, 2018, the National Congress enacted Law No. 27,444, which repeals Decree No. 27/2018, but confirms section 132, which created the MELI.

On September 1, 2019, due to various factors that impacted the evolution of the Argentine economy and the uncertainty caused in the financial markets by the presidential election that took place in 2019, by Emergency Decree No. 609/2019 and Communication “A” 6770 of the BCRA, the Macri administration re-implemented the exchange controls that had been lifted in 2016. Among other provisions, considerations, and exceptions set forth in such legislation, the most relevant aspects of the new foreign exchange rules (pursuant to Communication “A” 6844, as amended and supplemented), provide new regulation that impact the following areas and situations: (i) exports and imports of Services; (ii) payments of profits and dividends; (iii) sale of non-produced non-financial assets; (iv) external financial loans disbursed as of September 1, 2019; (v) repayment local notes offerings in dollars; (vi) payment of principal and interest external financial indebtedness; (vii) payments in foreign currency among residents; (viii) payments of External Financial Indebtedness by Collateral Trustees; (ix) purchase of foreign currency by individuals, entities, and non-residents; and (x) funding of debt services reserve accounts on external indebtedness.

E. Taxation

British Virgin Islands Tax Considerations

We are not liable to pay any form of taxation in the BVI and all dividends, interests, rents, royalties, compensations and other amounts paid by us to persons who are not persons resident in the BVI are exempt from all forms of taxation in the BVI and any capital gains realized with respect to any shares, debt obligations, or other securities of ours by persons who are not persons resident in the BVI are exempt from all forms of taxation in the BVI. The BVI is not party to any double tax treaties that are applicable to any payments made to or by us.

No estate, inheritance, succession or gift tax, rate, duty, levy or other charge is payable by persons who are not persons resident in the BVI with respect to any shares, debt obligation or other securities of ours.

Subject to the payment of stamp duty on the acquisition of property in the BVI by us (and in respect of certain transactions in respect of the shares, debt obligations or other securities of BVI incorporated companies owning land

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in the BVI), all instruments relating to transfers of property to or by us and all instruments relating to transactions in respect of the shares, debt obligations or other securities of ours and all instruments relating to other transactions relating to our business are exempt from payment of stamp duty in the BVI.

There are currently no withholding taxes or exchange control regulations in the BVI applicable to us or our shareholders.

U.S. Federal Income Taxation

The following is a summary of certain material U.S. federal income and, in the case of a non-U.S. holder (as defined below), estate tax consequences of the purchase, ownership and disposition of our ordinary shares as of the date hereof. This summary deals only with our ordinary shares that are held as capital assets within the meaning of Section 1221 of the Code (as defined below) (generally, for investment purposes) by a beneficial owner.

As used herein, a “U.S. holder” means a beneficial owner of our ordinary shares that is, for U.S. federal income tax purposes, any of the following:

• an individual citizen or resident of the United States;

• a corporation (or any other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia;

• an estate the income of which is subject to U.S. federal income taxation regardless of its source; or

• a trust if it (1) is subject to the primary supervision of a court within the United States and one or more United States persons have the authority to control all substantial decisions of the trust or (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a United States person.

As used herein, the term “non-U.S. holder” means a beneficial owner of our ordinary shares (other than a partnership or other pass-through entity for U.S. federal income tax purposes) that is not a U.S. holder.

This summary is based upon provisions of the Internal Revenue Code of 1986, as amended (the “Code”), and regulations, rulings and judicial decisions as of the date hereof. Those authorities may be changed, perhaps retroactively, so as to result in U.S. federal income and estate tax consequences different from those summarized below.

This discussion does not represent a detailed description of the U.S. federal income tax consequences applicable to you if you are subject to special treatment under the U.S. federal income tax laws, including if you are:

• a dealer in securities or currencies;

• a financial institution;

• a regulated investment company;

• a real estate investment trust;

• an insurance company;

• a tax-exempt organization;

• a person holding our ordinary shares as part of a hedging, integrated or conversion transaction, a constructive sale or a straddle;

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• a trader in securities that has elected the mark-to-market method of accounting for your securities;

• a person liable for alternative minimum tax;

• a partnership or other pass-through entity for U.S. federal income tax purposes;

• a person required to accelerate the recognition of any item of gross income with respect to our ordinary shares as a result of such income being recognized on an applicable financial statement;

• a U.S. holder whose “functional currency” is not the dollar;

• a foreign pension fund;

• a “controlled foreign corporation”;

• a “passive foreign investment company”; or

• a U.S. expatriate.

If a partnership (or other entity treated as a partnership for U.S. federal income tax purposes) holds our ordinary shares, the tax treatment of a partner will generally depend upon the status of the partner and the activities of the partnership. If you are a partner of a partnership holding our ordinary shares, you should consult your tax advisors.

Notwithstanding our corporate reincorporation in the BVI, under Section 7874 of the Code, the Company will be treated for U.S. federal tax purposes as a U.S. corporation and, among other consequences, is subject to U.S. federal income tax on its worldwide income. This discussion assumes that Section 7874 of the Code continues to apply to treat us as a U.S. corporation for all purposes under the Code. If, for some reason (e.g., future repeal of Section 7874 of the Code), we were no longer treated as a U.S. corporation under the Code, the U.S. federal income tax consequences described herein could be materially and adversely affected.

This discussion does not contain a detailed description of all the U.S. federal income and estate tax consequences to you in light of your particular circumstances and does not address the Medicare tax on net investment income or the effects of any state, local or non-U.S. tax laws. If you are considering the purchase of our ordinary shares, you should consult your own tax advisors concerning the particular U.S. federal income and estate tax consequences to you of the purchase, ownership and disposition of our ordinary shares, as well as the consequences to you arising under other U.S. federal tax laws and the laws of any other taxing jurisdiction.

Consequences to U.S. Holders

Dividends

In the event that we make a distribution of cash or other property (other than certain pro rata distributions of our stock) in respect of our ordinary shares, the distribution generally will be treated as a dividend for U.S. federal income tax purposes to the extent it is paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Any portion of a distribution that exceeds our current and accumulated earnings and profits generally will be treated first as a tax-free return of capital, causing a reduction in the adjusted tax basis of a U.S. holder’s ordinary shares, and to the extent the amount of the distribution exceeds a U.S. holder’s adjusted tax basis in our ordinary shares, the excess will be treated as gain from the disposition of our ordinary shares (the tax treatment of which is discussed below under “— Gain on Disposition of Ordinary Shares”). Subject to certain holding period and other requirements, (a) any dividends received by a U.S. holder that is a corporation will be eligible for the dividends received deduction and (b) any dividends received by a non-corporate U.S. holder (including an individual) will be eligible for the reduced tax rates that apply to “qualified dividend income.”

The amount of any dividend paid in foreign currency will equal the dollar value of the foreign currency received calculated by reference to the exchange rate in effect on the date the dividend is actually or constructively received

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by a U.S. holder, regardless of whether the foreign currency is converted into dollars. If the foreign currency received as a dividend is converted into dollars on the date it is received, a U.S. holder generally will not be required to recognize foreign currency gain or loss in respect of the dividend income. If the foreign currency received as a dividend is not converted into dollars on the date of receipt, a U.S. holder will have a basis in the foreign currency equal to its dollar value on the date of receipt. Any gain or loss realized on a subsequent conversion or other disposition of the foreign currency will be treated as U.S. source ordinary income or loss.

Gain on Disposition of Ordinary Shares

U.S. holders of our ordinary shares will recognize capital gain or loss on any sale, exchange, or other taxable disposition of our ordinary shares in an amount equal to the difference between the amount realized for the ordinary shares and the U.S. holder’s tax basis in the ordinary shares. Such gain or loss generally will be long-term capital gain or loss if the ordinary shares have been held for more than one year. Long-term capital gains of non-corporate U.S. holders (including individuals) are generally eligible for reduced rates of taxation. The deductibility of capital losses is subject to limitations.

Consequences to Non-U.S. Holders

Dividends

The rules applicable to non-U.S. holders for determining the extent to which distributions on our ordinary shares, if any, constitute dividends for U.S. federal income tax purposes are the same as for U.S. holders. See “—Consequences to U.S. Holders—Dividends.”

Dividends paid to a non-U.S. holder generally will be subject to withholding of U.S. federal income tax at a 30% rate or such lower rate as may be specified by an applicable income tax treaty. However, dividends that are effectively connected with the conduct of a trade or business by the non-U.S. holder within the United States (and, if required by an applicable income tax treaty, are attributable to a U.S. permanent establishment) are not subject to the withholding tax, provided certain certification and disclosure requirements are satisfied. Instead, such dividends are subject to U.S. federal income tax on a net income basis in the same manner as if the non-U.S. holder were a United States person as defined under the Code. Any such effectively connected dividends received by a foreign corporation may be subject to an additional “branch profits tax” at a 30% rate or such lower rate as may be specified by an applicable income tax treaty.

A non-U.S. holder who wishes to claim the benefit of an applicable treaty rate and avoid backup withholding, as discussed below, for dividends will be required (a) to provide the applicable withholding agent with a properly executed Internal Revenue Service (“IRS”) Form W-BEN or Form W-8BEN-E (or other applicable form) certifying under penalty of perjury that such holder is not a United States person as defined under the Code and is eligible for treaty benefits or (b) if our ordinary shares are held through certain foreign intermediaries, to satisfy the relevant certification requirements of applicable U.S. Treasury regulations. Special certification and other requirements apply to certain non-U.S. holders that are pass-through entities rather than corporations or individuals.

A non-U.S. holder eligible for a reduced rate of U.S. federal withholding tax pursuant to an income tax treaty may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS.

Gain on Disposition of Ordinary Shares

Subject to the discussion of backup withholding below, any gain realized by a non-U.S. holder on the sale or other disposition of our ordinary shares generally will not be subject to U.S. federal income tax unless:

• the gain is effectively connected with a trade or business of the non-U.S. holder in the United States (and, if required by an applicable income tax treaty, is attributable to a U.S. permanent establishment of the non-U.S. holder);

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• the non-U.S. holder is an individual who is present in the United States for 183 days or more in the taxable year of that disposition, and certain other conditions are met; or

• we are or have been a “United States real property holding corporation” for U.S. federal income tax purposes and certain other conditions are met.

A non-U.S. holder described in the first bullet point immediately above will be subject to tax on the gain derived from the sale or other disposition in the same manner as if the non-U.S. holder were a United States person as defined under the Code. In addition, if any non-U.S. holder described in the first bullet point immediately above is a foreign corporation, the gain realized by such non-U.S. holder may be subject to an additional “branch profits tax” at a 30% rate or such lower rate as may be specified by an applicable income tax treaty. An individual non-U.S. holder described in the second bullet point immediately above will be subject to a 30% (or such lower rate as may be specified by an applicable income tax treaty) tax on the gain derived from the sale or other disposition, which gain may be offset by U.S.-source capital losses even though the individual is not considered a resident of the United States.

Generally, a U.S. corporation is a “United States real property holding corporation” if the fair market value of its U.S. real property interests equals or exceeds 50% of the sum of the fair market value of its worldwide real property interests and its other assets used or held for use in a trade or business (all as determined for U.S. federal income tax purposes). We believe we are not and do not anticipate becoming a “United States real property holding corporation” for U.S. federal income tax purposes.

U.S. Federal Estate Tax

Ordinary shares held by an individual non-U.S. holder at the time of death will be included in such holder’s gross estate for U.S. federal estate tax purposes, unless an applicable estate tax treaty provides otherwise.

Information Reporting and Backup Withholding

U.S. Holders

In general, information reporting will apply to dividends in respect of our ordinary shares and the proceeds from the sale, exchange or other disposition of our ordinary shares that are paid to a U.S. holder within the United States (and in certain cases, outside the United States), unless the U.S. holder is an exempt recipient. A backup withholding tax may apply to such payments if the U.S. holder fails to provide a taxpayer identification number or certification of exempt status or fails to report in full dividend and interest income.

Backup withholding is not an additional tax and any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against a U.S. holder’s U.S. federal income tax liability, provided the required information is timely furnished to the IRS.

Non-U.S. Holders

Distributions paid to a non-U.S. holder and the amount of any tax withheld with respect to such distributions generally will be reported to the IRS. Copies of the information returns reporting such distributions and any withholding may also be made available to the tax authorities in the country in which the non-U.S. holder resides under the provisions of an applicable income tax treaty.

A non-U.S. holder will not be subject to backup withholding on dividends received if such holder certifies under penalty of perjury that it is a non-U.S. holder (and the payor does not have actual knowledge or reason to know that such holder is a United States person as defined under the Code), or such holder otherwise establishes an exemption.

Information reporting and, depending on the circumstances, backup withholding will apply to the proceeds of a sale or other disposition of our ordinary shares made within the United States or conducted through certain U.S.- related financial intermediaries, unless the beneficial owner certifies under penalty of perjury that it is a non-U.S. holder (and the payor does not have actual knowledge or reason to know that the beneficial owner is a United States person as defined under the Code), or such owner otherwise establishes an exemption.

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Backup withholding is not an additional tax and any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against a non-U.S. holder’s U.S. federal income tax liability, if any, provided the required information is timely furnished to the IRS.

Additional Withholding Requirements

Under Sections 1471 through 1474 of the Code (such Sections commonly referred to as “FATCA”), a 30% U.S. federal withholding tax may apply to any dividends paid on our ordinary shares to (i) a “foreign financial institution” (as specifically defined in the Code) which does not provide sufficient documentation, typically on IRS Form W-8BEN-E, evidencing either (x) an exemption from FATCA, or (y) its compliance (or deemed compliance) with FATCA (which may alternatively be in the form of compliance with an intergovernmental agreement with the United States) in a manner which avoids withholding, or (ii) a “non-financial foreign entity” (as specifically defined in the Code) which does not provide sufficient documentation, typically on IRS Form W-8BEN-E, evidencing either (x) an exemption from FATCA, or (y) adequate information regarding certain substantial U.S. beneficial owners of such entity (if any). If a dividend payment is both subject to withholding under FATCA and subject to the withholding tax discussed above under “—Consequences to Non-U.S. Holders—Dividends,” the withholding under FATCA may be credited against, and therefore reduce, such other withholding tax. You should consult your own tax advisors regarding these requirements and whether they may be relevant to your ownership and disposition of our ordinary shares.

F. Dividends and Paying Agents

Not applicable.

G. Statement by Experts

Not applicable.

H. Documents on Display

The SEC maintains a website at http://www.sec.gov that contains reports, proxy and information statements and other information regarding registrants that make electronic filings through its Electronic Data Gathering, Analysis, and Retrieval, or EDGAR, system. All our Exchange Act reports and other SEC filings are available through the EDGAR system.

I. Subsidiary Information

Not applicable.

ITEM 11 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our business activities are exposed to a variety of market risks, including foreign currency risk and inflation and interest rate risk.

Foreign Exchange Risk

We report our financial results in dollars, but most of our revenue and expenses are denominated in other currencies, particularly the Argentine peso, the Brazilian real and Mexican peso. Any changes in the exchange rates of any such currencies against the dollar will affect our reported financial results as translated into dollars. Furthermore, many of our travel customers travel internationally and any changes in the exchange rate between their home currency and the currency of their intended destination may influence their travel purchases. We also use derivative financial instruments in some cases to manage our foreign exchange risk.

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Our supplier arrangements often result in significant balances of both accounts payable and accounts receivable denominated in various currencies. To the extent that the timing of such payments are within our control, we often attempt to accelerate or delay such payments to minimize the disparity between our accounts payable and accounts receivable denominated in each currency, which reduces the effect of exchange rate fluctuations on our reported financial results. For example, we reduced our factoring of Brazilian installment receivables in 2016 in part to increase the total amount of our receivables denominated in Brazilian reais to partially offset our larger balance of accounts payable to suppliers in Brazil that are denominated in Brazilian reais. In addition, we can be exposed to foreign exchange risk with respect to international travel if we accept upfront payment at the time of booking in a travel customer’s home currency and are later required to pay the supplier in the supplier’s home currency.

Inflation and Interest Rate Risk

Brazil, Mexico and Argentina and many other countries in Latin America have historically experienced high rates of inflation. Inflationary pressures persist, and actions taken in an effort to curb inflation, coupled with public speculation about possible future governmental actions, have in the past contributed to economic uncertainty in Brazil, Mexico, Argentina and other Latin America countries and heightened volatility in the Latin America financial markets. Changes in inflation rates can affect our pricing as well as our expenses, and the inflation rates in the countries where we generate revenue in any period may be higher or lower than the inflation rates in the countries where we incur expenses. In addition, higher inflation may lead our travel customers to make more purchases using installment or other financing options and may make such financing options more expensive for us.

The inflation rate in Brazil, as reflected by the IPCA was 3.75% in 2018, 3.74 % in 2019 and 4.52% for 2020. After experiencing in 2017 the lowest inflation rate since 1998, Brazil went through a higher rate of inflation, but which was better than expected by the government. In Mexico the inflation rate in was 4.83% in 2018, 2.82% in 2019 and 3.15% in 2020.The inflation rate in Argentina was 47.6% in 2018. In 2019, Argentina’s inflation rate was 53.8%, the highest rate since 1991 and the second highest rate in Latin America. In 2020 Argentina’s inflation rate was 36.%.

Interest rates are highly sensitive to many factors, including fiscal and monetary policies to combat inflation and economic and political and other factors beyond our control. From time to time, we factor our receivables to receive cash more quickly. The costs of factoring are driven primarily by interest rates which, in turn, are influenced significantly by inflation and expectations for future inflation. In addition, we maintain revolving credit facilities in certain countries, and the interest rates payable with respect to those facilities also vary based on local market interest rates.

ITEM 12 DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

A. Debt Securities

Not applicable.

B. Warrants and Rights

Pursuant to the Catterton Investment Agreement, the Company has issued to the L Catterton Purchaser, warrants to purchase 11 million common shares at an exercise price of $0.01 per share, subject to certain customary anti-dilution adjustments provided under the Warrants, including for stock splits, reclassifications, combinations and dividends or distributions made by the Company on the ordinary shares. The Warrants expire On September 18, 2030. The foregoing description of the Warrants is qualified in its entirety by reference to the full text of the Ordinary Shares Purchase Warrant (Penny Warrant), dated September 18, 2020 issued by Despegar.com, Corp. in favor or LCLA Daylight LP, which is filed as Exhibit 4.7 to this Annual Report.

C. Other Securities

Not applicable.

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D. American Depositary Shares

Not applicable.

PART II.

ITEM 13 DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None.

ITEM 14 MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

A. Material Modifications to the Rights of Security Holders

None.

B. Material Modifications to the Rights of any Class of Registered Securities

None.

C. Withdrawal or Substitution of a Material Amount of the Assets Securing any Class of Registered Securities

None.

D. Changes in the Trustee or Paying Agents for any Registered Securities

None.

E. Use of Proceeds

Initial public offering in September 2017

On September 19, 2017, we completed our initial public offering on the New York Stock Exchange. The registration statement on Form F-1 (File No. 333- 219973) filed by us in connection with the initial public offering was declared effective on September 19, 2017.

The net proceeds to us from the offering, after deducting underwriting discounts and commissions and offering expenses, amounted to $253.5 million. We have not allocated our net proceeds from our initial public offering to any particular purpose. Rather, our management has considerable discretion in the application of the net proceeds that we received. As of the date hereof, $19.8 million of the net proceeds from our initial public offering has been allocated to the acquisition of Viajes Falabella, and we may use additional proceeds for other acquisitions or investments and general corporate purposes. No amount of the net proceeds has been paid to directors, officers, general partners or their associates nor to persons owning 10% or more of any class of our equity securities nor to any of our other affiliates.

ITEM 15 CONTROLS AND PROCEDURES

A. Disclosure Controls and Procedures

We have evaluated, with the participation of our chief executive officer and chief financial officer, the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as of December 31, 2020.

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There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based upon our evaluation, we, with the participation of our chief executive officer and chief financial officer, concluded that as of December 31, 2020, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the applicable rules and forms, and that it is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

B. Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. The Company’s internal control over financial reporting was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financial reporting includes those policies and procedures that:

(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the company; and

(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2020. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013). Based on our assessment and those criteria, management believes that the Company maintained effective internal control over financial reporting as of December 31, 2020.

However, management has excluded Koin and Best Day from its assessment of Internal Control over Financial Reporting as of December 31, 2020, because such entities were acquired in August 2020 and October 2020, respectively. The Best Day entities are direct subsidiaries whose total aggregate assets and total aggregate revenues represent 11.1% and 8.9%, respectively, of our consolidated assets and revenues as of and for the year ended December 31, 2020. Koin is a direct subsidiary whose total aggregate assets and total aggregate revenues represent 0.4% and 0.1% respectively, of our consolidated assets and revenues as of and for the year ended December 31, 2020.

C. Attestation Report of the Registered Public Accounting Firm

This Annual Report does not include an attestation report of the company’s registered public accounting firm due to the exemption from such requirement for emerging growth companies.

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D. Changes in Internal Control Over Financial Reporting

Management has evaluated, with the participation of our Chief Executive Officer and our Chief Financial Officer, whether any changes in our internal control over financial reporting that occurred during our last fiscal year have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Based on the evaluation we conducted, management has concluded that no such changes have occurred.

ITEM 16 [RESERVED]

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT

Our audit committee consists of Mr. Mario Eduardo Vázquez, Mr. Michael James Doyle II and Mr. Martín Rastellino, with Mr. Vázquez serving as chair. Messrs. Vázquez, Doyle and Rastellino, satisfy the independence requirements of Rule 10A-3 under the Exchange Act. Our board of directors also has determined that Messrs. Vázquez, Doyle and Rastellino qualify as audit committee financial experts within the meaning of the SEC rules.

ITEM 16B. CODE OF ETHICS

We have adopted a written code of business conduct and ethics that provides that our directors and officers are expected to avoid any action, position or interest that conflicts with the interests of our company or gives the appearance of a conflict. Directors and officers have an obligation under our code of business conduct and ethics to advance our company’s interests when the opportunity to do so arises. The full text of our code of business conduct and ethics is available on our website, at https://investor.despegar.com/corporate-governance/guidelines-and-ethics/default.aspx.

ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Our consolidated financial statements prepared in accordance with U.S. GAAP are audited by Price Waterhouse & Co. S.R.L., a firm registered with the Public Company Accounting Oversight Board in the United States.

The following table shows the aggregate fees for services rendered by Price Waterhouse & Co. S.R.L. to us, including our subsidiaries, in fiscal year 2020 and 2019.

	Year Ended December 31,
	2020		2019
	(in thousands)
Audit fees (audit of financial statements)(1)		2,231	$	1,261
Tax fees (other certifications and tax advisory services)(2)		306		729
All other fees (advisory services)(3)		675		375
Total		3,212	$	2,365

(1) Includes fees related to the audit of the consolidated financial statements as of December 31, 2020 and 2019 and for the years ended December 31, 2020, 2019 and 2018.

(2) Includes fees for permitted tax compliance and tax advisory services.

(3) Includes fees for permitted due diligence transactions.

Audit Committee Pre-approval Process

Our audit committee (which was formed in connection with our initial public offering) reviews and pre-approves the scope and the cost of audit services related to us and permissible non-audit services performed by the independent auditors, other than those for de minimis services which are approved by the audit committee prior to the completion of the audit.

121

ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not applicable.

ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

None.

ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

None.

ITEM 16G. CORPORATE GOVERNANCE

As a foreign private issuer, we are permitted under NYSE rules to follow home country corporate governance practices instead of the NYSE requirements, except that we must maintain an audit committee of the board of directors that meets the requirements of Exchange Act Rule 10A-3 and disclose in our annual reports on Form 20-F any significant ways in which our corporate governance practices differ from those followed by U.S. domestic listed companies under NYSE listing standards.

As a foreign private issuer, we are permitted under NYSE rules to follow the corporate governance practices of our home country, the British Virgin Islands (“BVI”), instead of most of the NYSE’s corporate governance requirements. We follow home country corporate governance practices instead of nearly all of the NYSE’s corporate governance requirements, as described in more detail below. See also “ITEM 6. Directors, Senior Management and Employees—C. Board Practices.”

Requirement	NYSE Requirement FOR US Listed Companies	BVI Law	Despegar Practice
Independent Directors	The board of directors is required to have a majority of independent directors.	BVI law does not require us to have a majority of independent directors.	We do not have a majority independent board of directors in accordance with NYSE independence standards
Executive Sessions of Independent Directors	Independent directors of a NYSE-listed company must have meetings at which only the independent directors are present.	BVI law does not require us to hold executive sessions of the board of directors.	We do not hold independent directors’ meetings.
Audit Committee	Must have an audit committee with the specific responsibilities and authority necessary to comply with SEC rules. Members must meet all of the independence requirements of the NYSE, as well as the SEC Rule 10A-3 independence requirements (subject to any available exemptions).	BVI law does not require an independent audit committee.	Our board of directors has established an audit committee that complies with SEC Rule 10A-3 independence requirements only, and not general NYSE independence standards.
Internal Audit Function	Must have an internal audit function. This function may be performed by a third party.	BVI law does not require an internal audit function.	We do not have an internal audit function.
Compensation of Executive Officers	Must have a compensation committee consisting solely of independent directors. Must satisfy the additional independence requirements specific to compensation committee membership.	BVI law does not require an independent compensation committee.	The board of directors has established a nomination and compensation committee. However, its members are not all independent as determined in accordance with NYSE listing standards.

122

Requirement	NYSE Requirement FOR US Listed Companies	BVI Law	Despegar Practice
Nomination of Directors	Must have a nominating/corporate governance committee consisting solely of independent directors.	BVI law does not require an independent nominating committee.	The board of directors has established a nomination and compensation committee. However, its members are not all independent as determined in accordance with NYSE listing standards.
Corporate Governance Guidelines	Company must adopt and disclose corporate governance guidelines	BVI law does not require corporate governance guidelines.	We do not have corporate governance guidelines.
Shareholder Approval of Equity Compensation Plans and Certain Other Share Issuances	Shareholders must approve all equity-compensation plans and material revisions thereto, with limited exemptions. Shareholder approval also required for certain other dilutive and related party equity issuances.	BVI law does not require shareholder approval of equity compensation plans or such other share issuances	We have not and do not intend to submit for shareholder approval any equity-compensation plans or the other dilutive and related party equity issuances covered by NYSE rules.

ITEM 16H. MINE SAFETY DISCLOSURE

Not applicable.

PART III.

ITEM 17 FINANCIAL STATEMENTS

Not applicable.

ITEM 18 FINANCIAL STATEMENTS

See our consolidated financial statements beginning at page F-1.

ITEM 19 EXHIBITS

The agreements and other documents filed as exhibits to this Annual Report on Form 20-F are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and for the benefit of the other parties to the agreements and they may not describe the actual state of affairs as of the date they were made or at any other time.

The exhibit index attached hereto is incorporated herein by reference.

123

EXHIBIT INDEX

Exhibit Number	Description
3.1	Amended and Restated Memorandum and Articles of Association of Despegar.com, Corp. (incorporated by reference to Exhibit 3.1 to the Registration Statement filed on Form F-1, filed on August 31, 2017)
4.1	Sixth Amended and Restated Investors’ Rights Agreement, dated as of August 29, 2017, by and among the Company and the shareholders named therein (incorporated by reference to Exhibit 4.1 to the Registration Statement filed on Form F-1, filed on August 31, 2017)
4.2	Letter Agreement, dated as of August 20, 2020, relating to the Sixth Amended and Restated Investors’ Rights Agreement, dated as of August 29, 2017 by Despegar.com, Corp. and the shareholders named therein. (incorporated by reference to Exhibit 4.4 to the Current Report filed on Form 6-K, filed on August 21, 2020)
4.3	Fourth Amended and Restated Voting Agreement, dated as of August 29, 2017, by and among the Company and the shareholders named therein (incorporated by reference to Exhibit 4.3 to the Registration Statement filed on Form F-1, filed on August 31, 2017)
4.4	Nominating Agreement, dated as of October 21, 2020, by and among Despegar.com, Corp. and Expedia, Inc. (incorporated by reference to Exhibit 4.1 to the Current Report filed on Form 6-K, filed on August October 21, 2020)
4.5*	Registration Rights Agreement, dated as of September 18, 2020 by and among Despegar.com, Corp. and LCLA Daylight LP.
4.6*	Shelf Registration Rights Agreement, dated as of September 21, 2020 by and among Despegar.com, Corp. and Waha LATAM Investments Limited.
4.7*	Ordinary Shares Purchase Warrant (Penny Warrant), dated September 18, 2020 issued by Despegar.com, Corp. in favor or LCLA Daylight LP
10.1##	Amended and Restated Expedia Outsourcing Agreement dated as of November 14, 2019, among Expedia, Inc. and Decolar.com Inc., Travel Reservations S.R.L., Despegar.com.ar S.A., Decolar.com Ltda., Despegar.com Mexico S.A. de C.V., Despegar.com Peru SAC, Despegar.com Chile SpA., Despegar Colombia S.A.S., Viajes Despegar.com O.N.L.I.N.E. S.A., Despegar Ecuador S.A., Despegar.com USA, Inc., Despegar.com Panama S.A., and Holidays S.A. (incorporated by reference to Exhibit 4.1 to the Annual Report filed on Form F-1, filed on April 10, 2020)
10.2	Amendment, dated as of August 20, 2020, to the Amended and Restated Lodging Outsourcing Agreement dated as of November 15, 2019 by and among Expedia, Inc., Travel Reservations S.R.L, Decolar.com, Inc., and certain subsidiaries of Decolar.com, Inc. (incorporated by reference to Exhibit 4.3 to the Current Report filed on Form 6-K, filed on August 21, 2020)
10.3#	Amended and Restated Despegar Outsourcing Agreement dated as of July 12, 2017, among Expedia, Inc., Travelscape, LLC, Vacation Spot S.L., Hotels.com L.P., AAE Travel Pte., Ltd., Expedia Lodging Partner Services, Sarl and Hotwire, Inc. and Travel Reservations S.R.L. (incorporated by reference to Exhibit 10.2 to the Registration Statement filed on Form F-1, filed on August 31, 2017)
10.4	Investment Agreement, dated as of August 20, 2020, by and between Despegar.com, Corp. and LCLA Daylight LP (incorporated by reference to Exhibit 4.1 to the Current Report filed on Form 6-K, filed on August 21, 2020)
10.5	Investment Agreement, dated as of August 20, 2020, by and between Despegar.com, Corp. and Waha LATAM Investment Limited (incorporated by reference to Exhibit 4.2 to the Current Report filed on Form 6-K, filed on August 21, 2020)
10.6	Decolar.com, Inc. 2015 Stock Plan (incorporated by reference to Exhibit 10.3 to the Registration Statement filed on Form F-1, filed on August 31, 2017)
10.7	Despegar.com, Corp. 2016 Stock Incentive Plan (incorporated by reference to Exhibit 10.4 to the Registration Statement filed on Form F-1, filed on August 31, 2017)
21.1*	List of Subsidiaries of Despegar
23.1*	Consent of Price Waterhouse & Co. S.R.L., Independent Registered Public Accounting Firm
31.1*	Certification by Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

124

31.2*	Certification by Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.3*	Certification by Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
31.4*	Certification by Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101. INS*	XBRL Instance Document
101. SCH*	XBRL Taxonomy Extension Schema
101. CAL*	XBRL Taxonomy Extension Schema Calculation Linkbase
101. DEF*	XBRL Taxonomy Extension Schema Definition Linkbase
101. LAB*	XBRL Taxonomy Extension Schema Label Linkbase

* Filed herewith

# Confidential treatment requested granted with respect to portions of this exhibit.

*## Portions of this exhibit have been omitted because they are both (i) not material and (ii) would likely cause competitive harm to the Company if publicly disclosed.

125

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this Annual Report on Form 20-F on its behalf.

DESPEGAR.COM, CORP.
By:	/s/ Damián Scokin
Name:	Damián Scokin
Title:	Chief Executive Officer

Date: April 30, 2021

INDEX TO FINANCIAL STATEMENTS

Consolidated Financial Statements as of December 31, 2020 and 2019 and for the three years ended December 31, 2020:

Report of Independent Registered Public Accounting Firms	F-2
Consolidated Balance Sheets as of December 31, 2020 and 2019	F-4
Consolidated Statements of Income for the years ended December 31, 2020, 2019 and 2018	F-5
Consolidated Statements of Comprehensive Income for the years ended December 31, 2020, 2019 and 2018	F-6
Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2020, 2019 and 2018	F-7
Consolidated Statements of Cash Flows for the years ended December 31, 2020, 2019 and 2018	F-8
Notes to the Consolidated Financial Statements	F-10

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Despegar.com, Corp.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Despegar.com, Corp. and its subsidiaries (the “Company”) as of December 31, 2020 and 2019, and the related consolidated statements of income, comprehensive income, changes in shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2020, including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020 in conformity with accounting principles generally accepted in the United States of America.

Changes in Accounting Principles

As discussed in Note 9 to the consolidated financial statements, the Company changed the manner in which it accounts for credit expected losses in 2020 and the manner in which it accounts for leases in 2019.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Price Waterhouse & Co. S.R.L., Bouchard 557, piso 8°, C1106ABG - Ciudad de Buenos Aires

  T: +(54.11) 4850.6000, F: +(54.11) 4850.6100, www.pwc.com/ar

Price Waterhouse & Co. S.R.L. es una firma miembro de la red global de PricewaterhouseCoopers International Limited (PwCIL). Cada una de las firmas es una entidad legal separada que no actúa como mandataria de PwCIL ni de cualquier otra firma miembro de la red.

F-2

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ PRICE WATERHOUSE & CO. S.R.L.

/s/ Eduardo Alfredo Loiácono (Partner)

Eduardo Alfredo Loiácono

Buenos Aires, Argentina

April 30, 2021

We have served as the Company’s auditor since 2007.

F-3

Despegar.com, Corp.

Consolidated Balance Sheets as of December 31, 2020 and 2019

(in thousands of U.S. dollars)

	As of December 31,			As of December 31,
	2020			2019
ASSETS
Current assets
Cash and cash equivalents		334,430			309,187
Restricted cash		16,055			4,457
Trade accounts receivable, net of credit expected loss of 10,795 and 3,205		79,816			213,551
Related party receivable		8,174			19,555
Other assets and prepaid expenses		52,295			69,694
Total current assets	$	490,770		$	616,444
Non-current assets
Other assets		71,795			25,351
Lease right-of-use assets		36,239			41,638
Property and equipment, net		22,462			21,205
Intangible assets, net		96,495			49,619
Goodwill		123,217			46,956
Total non-current assets	$	350,208		$	184,769
TOTAL ASSETS	$	840,978		$	801,213
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses		32,161			59,673
Travel accounts payable		229,435			206,954
Related party payable		19,351			86,602
Short-term debt		8,949			19,209
Deferred revenue		9,324			8,853
Other liabilities		56,109			46,722
Contingent liabilities		8,398			6,297
Lease liabilities		8,591			6,498
Total current liabilities	$	372,318		$	440,808
Non-current liabilities
Other liabilities		44,913			6,646
Contingent liabilities		24,949			54
Long-term debt		10,367			—
Lease liabilities		28,694			34,469
Related party liability		125,000			125,000
Total non-current liabilities	$	233,923		$	166,169
TOTAL LIABILITIES	$	606,241		$	606,977
Series A non-convertible preferred shares, no par value, 150,000 shares issued and outstanding		91,686			—
Series B convertible preferred shares, no par value, 50,000 shares issued and outstanding		46,700			—
Redeemable non-controlling interest		2,621			—
Mezzanine Equity	$	141,007		$	—
SHAREHOLDERS’ EQUITY
Common stock (1)		265,698			261,608
Additional paid-in capital		379,780			327,523
Other reserves		(728	)		(728	)
Accumulated other comprehensive income		(12,580	)		610
Accumulated losses		(470,173	)		(326,510	)
Treasury Stock		(68,267	)		(68,267	)
Total Shareholders’ Equity	$	93,730		$	194,236
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	840,978		$	801,213

(1) Represents 70,099 shares (in thousands) issued and outstanding as of December 31, 2020 and 69,648 shares (in thousands) issued and outstanding as of December 31, 2019.

The accompanying notes are an integral part of these consolidated financial statements.

F-4

Despegar.com, Corp.

Consolidated Statements of Income

for the years ended December 31, 2020, 2019 and 2018

(in thousands of U.S. dollars, except per share data in U.S. dollars)

	For the year ended December 31,
	2020			2019			2018
Revenue (1)		131,334			524,876			530,614
Cost of revenue		(85,518	)		(179,565	)		(172,110	)
Gross profit	$	45,816		$	345,311		$	358,504
Operating expenses
Selling and marketing		(57,292	)		(187,894	)		(174,357	)
General and administrative		(94,722	)		(92,962	)		(67,240	)
Technology and product development		(67,043	)		(73,375	)		(71,154	)
Impairment of long-lived assets and goodwill		(1,917	)		—			(363	)
Total operating expenses	$	(220,974	)	$	(354,231	)	$	(313,114	)
Loss from equity investments		(2,059	)		—			—
Operating (loss) / income	$	(177,217	)	$	(8,920	)	$	45,390
Financial income / (expense), net		12,910			(17,215	)		(19,167	)
(Loss) / income before income taxes	$	(164,307	)	$	(26,135	)	$	26,223
Income tax benefit / (expense)		21,438			5,225			(7,069	)
Net (loss) / income	$	(142,869	)	$	(20,910	)	$	19,154
Net loss attributable to redeemable non-controlling interest		282			—			—
Net (loss) / income attributable to Despegar.com, Corp.	$	(142,587	)	$	(20,910	)	$	19,154

(1) Includes $7,066, $38,760 and $43,975 for related party transactions for the years 2020, 2019 and 2018, respectively. See Note 22.

(Losses) / Earnings per share available to common stockholders:
Basic	(2.06	)	(0.30	)	0.28
Diluted	(2.06	)	(0.30	)	0.27
Shares used in computing (losses) / earnings per share (in thousands):
Basic	73,001		69,465		69,154
Diluted	73,001		69,465		71,254

The accompanying notes are an integral part of these consolidated financial statements.

F-5

Despegar.com, Corp.

Consolidated Statements of Comprehensive Income

for the years ended December 31, 2020, 2019 and 2018

(in thousands of U.S. dollars)

	For the year ended December 31,
	2020			2019			2018
Net (loss) / income	$	(142,869	)	$	(20,910	)	$	19,154
Other comprehensive loss, net of tax
Foreign currency translation adjustment		(13,190	)		(2,441	)		(13,272	)
Comprehensive (loss) / income	$	(156,059	)	$	(23,351	)	$	5,882
Net loss attributable to redeemable non-controlling interest		282			—			—
Foreign currency translation adjustment attributable to redeemable non-controlling interest		(170	)		—			—
Comprehensive (loss) / income attributable to Despegar.com, Corp.	$	(155,947	)	$	(23,351	)	$	5,882

The accompanying notes are an integral part of these consolidated financial statements.

F-6

Despegar.com, Corp.

Consolidated Statements of Changes in Shareholders’ Equity

for the years ended December 31, 2020, 2019 and 2018

(in thousands of U.S. dollars)

	Common stock				Additional paid-in capital			Other reserves			Accumulated other comprehensive income / (loss)			Accumulated losses			Treasury Stock			Total Equity
	Number of shares (in thousands)		Amount
Balance as of December 31, 2017		69,097		253,535		316,444			(728	)		16,323			(367,616	)		—			217,958
Change in accounting standard ASC 606		—		—		—			—			—			42,862			—			42,862
Balance as of December 31, 2017 Adjusted		69,097		253,535		316,444			(728	)		16,323			(324,754	)		—			260,820
Stock-based compensation expense		—		—		6,766			—			—			—			—			6,766
Foreign currency translation adjustment		—		—		—			—			(13,272	)		—			—			(13,272	)
Exercise of stock options		138		1,719		(1,583	)		—			—			—			—			136
Net income for the year		—		—		—			—			—			19,154			—			19,154
Treasury Stock		—		—		—			—			—			—			(26,030	)		(26,030	)
Balance as of December 31, 2018		69,235		255,254		321,627			(728	)		3,051			(305,600	)		(26,030	)		247,574
Stock-based compensation expense		—		—		11,686			—			—			—			—			11,686
Foreign currency translation adjustment		—		—		—			—			(2,441	)		—			—			(2,441	)
Exercise of stock options		413		6,354		(5,790	)		—			—			—			—			564
Net loss for the year		—		—		—			—			—			(20,910	)		—			(20,910	)
Treasury Stock		—		—		—			—			—			—			(42,237	)		(42,237	)
Balance as of December 31, 2019		69,648		261,608		327,523			(728	)		610			(326,510	)		(68,267	)		194,236
Change in accounting standard ASC 326		—		—		—			—			—			(1,076	)		—			(1,076	)
Balance as of January 1, 2020		69,648		261,608		327,523			(728	)		610			(327,586	)		(68,267	)		193,160
Stock-based compensation expense		—		—		7,312			—			—			—			—			7,312
Foreign currency translation adjustment		—		—		—			—			(13,190	)		—			—			(13,190	)
Exercise of stock options		451		4,090		(3,720	)		—			—			—			—			370
Net loss for the year		—		—		—			—			—			(142,587	)		—			(142,587	)
Warrants, net of issuance costs		—		—		56,339			—			—			—			—			56,339
Accretion of Series A non-convertible preferred shares		—		—		(2,831	)		—			—			—			—			(2,831	)
Accrual of cumulative dividends of Series A non-convertible preferred shares		—		—		(4,212	)		—			—			—			—			(4,212	)
Accretion of redeemable non-controlling interest		—		—		(78	)		—			—			—			—			(78	)
Payment of dividends to Series B convertible preferred shares		—		—		(553	)		—			—			—			—			(553	)
Balance as of December 31, 2020		70,099		265,698		379,780			(728	)		(12,580	)		(470,173	)		(68,267	)		93,730

The accompanying notes are an integral part of these consolidated financial statements.

F-7

Despegar.com, Corp.

Consolidated Statements of Cash Flows

for the years ended December 31, 2020, 2019 and 2018

(in thousands of U.S. dollars)

	For the year ended December 31,
	2020			2019			2018
Cash flows from operating activities:
Net (loss) / income	$	(142,869	)	$	(20,910	)	$	19,154
Adjustments to reconcile net (loss) / income to net cash flows from operating activities:
Net loss attributable to redeemable non-controlling interest		282			—			—
Unrealized foreign currency (gain) / loss		5,066			6,748			(1,088	)
Changes in fair value of earnout liability		2,239			—			—
Changes in seller indemnification		(2,239	)		—			—
Loss from equity investments		2,059			—			—
Depreciation expense		7,981			6,659			4,985
Amortization expense		21,699			16,137			10,140
Disposals of property and equipment		—			597			—
Write-off of leasehold improvements		3,661			—			—
Impairment of long-lived assets and goodwill		1,917			—			363
Stock-based compensation expense		7,312			11,686			6,766
Amortization of lease right-of-use assets		3,417			3,923			—
Interest and penalties		2,082			1,228			494
Income tax (benefit) / expense		(21,478	)		(9,666	)		2,876
Allowance for credit expected losses		12,270			4,294			1,062
Provision for contingencies		11,096			1,603			2,021
Changes in assets and liabilities, net of non-cash transactions:
Decrease / (Increase) in trade accounts receivable, net of credit expected loss		108,894			13,823			(54,705	)
Decrease / (Increase) in related party receivable		13,897			(10,905	)		(3,406	)
Decrease / (Increase) in other assets and prepaid expenses		27,105			19,695			(61,302	)
(Decrease) / Increase in accounts payable and accrued expenses		(37,750	)		16,651			4,277
(Decrease) / Increase in travel accounts payable		(75,888	)		(19,459	)		42,789
(Decrease) / Increase in other liabilities		(300	)		4,391			3,309
Decrease in contingent liabilities		(3,008	)		(1,990	)		(5,567	)
(Decrease) / Increase in related party payable		(63,810	)		3,678			4,203
Decrease in lease liabilities		(1,990	)		(4,573	)		—
Increase in deferred revenue		10			628			6,009
Net cash flows (used in) / provided by operating activities	$	(118,345	)	$	44,238		$	(17,620	)
Cash flows from investing activities:
Payments for acquired business, net of cash acquired		2,743			(228	)		—
Acquisition of property and equipment		(3,458	)		(5,942	)		(13,085	)
Increase of intangible assets, including internal-use software and website development		(14,028	)		(24,614	)		(13,494	)
Net cash flows used in investing activities	$	(14,743	)	$	(30,784	)	$	(26,579	)
Cash flows from financing activities:
Net (decrease) / increase of short-term debt		(14,288	)		(11,507	)		24,637
Increase in long-term debt		640			—			—
Decrease in long-term debt		(375	)		—			—
Exercise of stock-based compensation		370			564			136
Purchase of treasury stock		—			(42,237	)		(26,030	)
Proceeds from issuance of preferred shares		200,000			—			—
Issuance costs of preferred shares and warrants		(12,098	)		—			—
Payment of dividends to Series B convertible preferred shares		(553	)		—			—
Net cash flows provided by / (used in) financing activities	$	173,696		$	(53,180	)	$	(1,257	)
Effect of exchange rate changes on cash and cash equivalents		(3,767	)		1,181			(13,132	)
Net increase / (decrease) in cash and cash equivalents	$	36,841		$	(38,545	)	$	(58,588	)
Cash and cash equivalents and restricted cash as of beginning of the year	$	313,644		$	352,189		$	410,777
Cash and cash equivalents and restricted cash as of end of the year (1)	$	350,485		$	313,644		$	352,189

(1) See Note 8.

The accompanying notes are an integral part of these consolidated financial statements.

F-8

Despegar.com, Corp.

Consolidated Statements of Cash Flows

for the years ended December 31, 2020, 2019 and 2018 (Continued)

(in thousands of U.S. dollars)

	For the year ended December 31,
	2020		2019		2018
Supplemental cash flow information
Cash paid for income tax	$	3,427	$	9,106	$	14,423
Interest paid	$	4,948	$	5,767	$	5,311
Financed portion of acquisitions	$	10,168	$	10,696	$	—

The accompanying notes are an integral part of these consolidated financial statements.

F-9

Despegar.com, Corp.

Notes to the Consolidated Financial Statements

(in thousands of U.S. dollars, except per share data in U.S. dollars)

1. Business

Despegar.com, Corp. (formerly Decolar.com, Inc.) is the leading online travel company in Latin America. We provide our traveler customers a comprehensive product offering, including airline tickets, packages, hotels and other travel-related products, which enables them to find, compare, plan and purchase travel products easily through our marketplace. We provide our network of travel suppliers a technology platform for managing the distribution of their travel products and access to traveler customers. We offer these travel products and services through our two brands: “Despegar”, our global brand, and “Decolar”, our brand for the Brazilian market. We refer to Despegar.com, Corp. and its subsidiaries collectively as “Despegar Group”, the “Company”, “us”, “we” and “our” in these consolidated financial statements.

On October 1, 2020, we closed the acquisition of the 100% equity interests of Viajes Beda S.A. de C.V. (“Viajes Beda”) and Transporturist S.A. de C.V. (“Transporturist”), both companies organized under the laws of Mexico (collectively the “Acquisition”). Viajes Beda and Transporturist are collectively hereinafter referred to as the “Best Day Group”. The Best Day Group operates mainly in Mexico and to a lesser extent in several countries in South America, including Argentina, Brazil and Uruguay among others, and the United States. The Best Day Group primarily provides travelers with several product offerings, including airline tickets, packages, hotels and other travel-related products, through its online platforms, call centers and offline presence, and provides travel suppliers a technology platform for managing the distribution of their travel products and access to traveler customers. The Best Day Group also provides ground transportation services and group tours to travelers principally across Mexico and the Dominican Republic main tourist destinations. The Best Day Group offers these travel products and services through its brands: “Best Day” and “BD Experience”. In addition, the Best Day Group offers hotel inventory, as well as transfers, activities, car rental, packages and tours to travel agencies through its tradename “HotelDo”. Also, the Best Day Group provides white label services for major travel vendors, including exclusive partnerships with the largest Mexican airlines operating their packages platforms. See Note 4 for a discussion of the Acquisition.

Effect of Novel Coronavirus 2019 (COVID-19) on these consolidated financial statements

The ongoing COVID-19 pandemic is disrupting the global economy in general and the travel industry in particular, and consequently adversely affecting our business, results of operations and cash flows. The impact to date of the COVID-19 pandemic on global economic conditions and on the travel industry has been severe. The pandemic has also significantly increased economic uncertainty and volatility.  

Demand for travel began showing early signs of weakness by the beginning of March 2020. Within a matter of days, with more news of the potentially extensive spreading of the virus to other parts of the world, travel demand began to decline significantly, and then the decline accelerated precipitously as governments implemented strict measures to limit the spread of the virus. As a result, our travel booking volumes have been and are significantly lower than prior year levels and cancellation levels have been elevated compared to pre-COVID 19 levels.

The accompanying notes are an integral part of these consolidated financial statements.

F-10

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

More recently, there has been varying degrees of containment of the virus in certain countries and hence some signs of travel recovery; however, the degree of containment and the recovery in travel has varied country to country and there have been instances where cases of COVID-19 have started to increase again after a period of decline, and even new variants of the virus have been detected recently. Additionally, many travel restrictions and quarantine orders remain in place or were reimposed. On the other hand, in December 2020, several countries officially launched their COVID-19 vaccination campaigns and began administering vaccine doses at various levels of speed. Health authorities in the countries in which we operate are prioritizing high-risk groups, as only a limited number of doses are expected to be available in the early stages of the vaccination rollout. It is unclear whether enough people in the countries in which we operate will get vaccinated and when such countries will reach a level of herd immunity to prevent the virus from further disrupting the travel industry.

Due to the high degree of cancellations and customer refunds and lower new bookings, in 2020 we experienced a 75% decrease in revenue as compared to the prior year. We experienced unfavorable working capital trends and material negative cash flows during the year ended December 31, 2020, although the level of negative cash flow has moderated as booking trends slightly improved and cancellations stabilized in the fourth quarter of 2020. Overall, the full duration and total impact of the COVID-19 pandemic remains uncertain and it is difficult to predict how the recovery will unfold for the travel industry and, in particular, our business. For a discussion on incremental cancellation and allowance for expected uncollectible amounts impacts, see Note 3. For a discussion of asset impairments recognized in conjunction with the pandemic, see Notes 11, 12 and 13. For a discussion of recent actions to strengthen our liquidity position in the current environment, see Notes 6 and 18.

2. Basis of consolidation and presentation

Basis of presentation

We prepared these consolidated financial statements in accordance with accounting principles generally accepted in the United States (“US GAAP”).

Our consolidated financial statements include the accounts of Despegar.com, Corp., our wholly owned subsidiaries, and entities for which we control a majority of the entity’s outstanding common stock. We record non-controlling interest in our consolidated financial statements to recognize the minority ownership interest in our consolidated subsidiaries. Non-controlling interest in the earnings and losses of consolidated subsidiaries represent the share of net income or loss allocated to members or partners in our consolidated entities, which includes the non-controlling interest share of net income or loss from our redeemable non-controlling interest entity. We consolidate our subsidiaries from the date on which we obtain control. We deconsolidate any subsidiary from the date we lose control. We record our investments in entities that we do not control, but over which we have the ability to exercise significant influence, using the equity method. We have eliminated significant intercompany transactions and accounts. We change the accounting policies of subsidiaries where necessary to ensure consistency with our accounting policies. All of our subsidiaries have the same year-end.

We believe that the assumptions underlying our consolidated financial statements are reasonable. However, these consolidated financial statements do not present our future financial position, the results of our future operations and cash flows.

The accompanying notes are an integral part of these consolidated financial statements.

F-11

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

The following are our subsidiaries as of the end of the years presented:

Name of the subsidiary (in alphabetical order)	Type	Country of incorporation	As of December 31, 2020			As of December 31, 2019
			% Owned
Agencia de Viajes y Turismo Falabella S.A.S. (1)	Operating	Colombia		—			100	%
Badurey S.A.	Holding	Uruguay		100	%		100	%
BD Travelsolution, S. de R.L. de C.V.	Operating	Mexico		100	%		—
BDTP Venture, Inc.	Operating	United States		100	%		—
Beda Transportation, Inc.	Operating	United States		100	%		—
Beda Travel & Tours, Inc.	Operating	United States		100	%		—
Beda Travel, Inc.	Holding	United States		100	%		—
Click Hoteles.com, LLC	Holding	United States		100	%		—
Decolar.com Ltda.	Operating	Brazil		100	%		100	%
Decolar.com, Inc.	Holding	United States		100	%		100	%
Desonproc S.L. (6)	Operating	Spain		—			100	%
Despegar Colombia S.A.S.	Operating	Colombia		100	%		100	%
Despegar Ecuador S.A.	Operating	Ecuador		100	%		100	%
Despegar Servicios, S.A. de C.V. (5)	Operating	Mexico		100	%		100	%
Despegar.com Chile SpA	Operating	Chile		100	%		100	%
Despegar.com México S.A. de C.V.	Operating	Mexico		100	%		100	%
Despegar.com Panama S.A. (6)	Operating	Panama		—			100	%
Despegar.com Peru S.A.C.	Operating	Peru		100	%		100	%
Despegar.com USA, Inc.	Operating	United States		100	%		100	%
Despegar.com.ar S.A.	Operating	Argentina		100	%		100	%
DFinance Holding Ltda.	Holding	Brazil		100	%		—
Holidays S.A.	Operating	Uruguay		100	%		100	%
Jamiray International S.A.	Operating	Uruguay		100	%		—
Koin Administradora de Cartões e Meios de Pagamento S.A.	Operating	Brazil		84	%		—
Rivamor S.A.	Holding	Uruguay		100	%		100	%
Satylca S.C.A.	Holding	Uruguay		100	%		100	%
Servicios Online 3351 de Venezuela C.A.	Operating	Venezuela		100	%		100	%
Servicios Online S.A.S. (1)	Operating	Colombia		—			100	%
South Net Chile, LTDA	Operating	Chile		100	%		—
South Net Travel, Inc.	Operating	United States		100	%		—
South Net Turismo Colombia, S.A.	Operating	Colombia		100	%		—
South Net Turismo Perú S.R.L.	Operating	Peru		100	%		—
South-Net Turismo Brasil, LTDA	Operating	Brazil		100	%		—
South-Net Turismo S.A.	Operating	Argentina		100	%		—
Tecnobelt S.A.	Operating	Uruguay		100	%		100	%
Transporturist, S.A. de C.V.	Operating	Mexico		100	%		—
Travel Reservations S.R.L.	Operating	Uruguay		100	%		100	%
Viaceco Travel, S.A. de C.V. (5)	Operating	Mexico		100	%		—
Viajes Beda, S.A. de C.V.	Operating	Mexico		100	%		—

The accompanying notes are an integral part of these consolidated financial statements.

F-12

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

Name of the subsidiary (in alphabetical order)	Type	Country of incorporation	As of December 31, 2020			As of December 31, 2019
Viajes Despegar.com O.N.L.I.N.E. S.A.	Operating	Costa Rica		100	%		100	%
Viajes Falabella S.A. (2)	Operating	Argentina		—			100	%
Viajes Falabella S.A.C. (3)	Operating	Peru		—			100	%
Viajes Falabella SpA (4)	Operating	Chile		—			100	%

(1) Merged with and into Despegar Colombia S.A.S.

(2) Merged with and into Despegar.com.ar S.A.

(3) Merged with and into Despegar.com Peru S.A.C.

(4) Merged with and into Despegar.com Chile SpA.

(5) Merged with and into Despegar.com México S.A. de C.V. on January 1, 2021.

(6) Liquidated as of December 31, 2020.

Use of estimates

We use estimates and assumptions in the preparation of these consolidated financial statements in accordance with US GAAP. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of these consolidated financial statements. These estimates and assumptions also affect the reported amount of net income or loss during any period. The actual financial results could differ significantly from these estimates. The significant estimates underlying these consolidated financial statements include revenue recognition; allowance for credit expected losses; recoverability of long-lived assets, indefinite-lived intangible assets and goodwill; income and transactional taxes; loss contingencies; stock-based compensation and accounting for derivative instruments. The consolidated financial statements reflect all adjustments considered, in the opinion of management, necessary to fairly present the results for the periods presented.

Foreign currency translation

We have selected the U.S. dollar as our reporting currency. For local currency functional locations, assets and liabilities are translated at end-of-period rates while revenues and expenses are translated at average rates in effect during the period. Equity is translated at historical rates and the resulting cumulative translation adjustments are included as a component of accumulated other comprehensive income / (loss).

For U.S. dollar functional currency locations, foreign currency assets and liabilities are remeasured into U.S. dollars at end-of-period exchange rates, except for non-monetary balance sheet accounts, which are remeasured at historical exchange rates. Revenue and expenses are remeasured at average exchange rates in effect during each period, except for those expenses related to the non-monetary balance sheet amounts, which are remeasured at historical exchange rates. Gains or losses from foreign currency remeasurement are included in “Financial income / (expense), net” in our consolidated statements of income.

As from July 1, 2018, our subsidiary in Argentina changed its functional currency from Argentine Pesos to U.S. dollars due to the current highly inflationary status of the Argentine economy. A highly inflationary economy is one that has cumulative inflation of approximately 100% or more over a three-year period.

The accompanying notes are an integral part of these consolidated financial statements.

F-13

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

Concentration of risk

Our business is subject to certain risks and concentrations including our dependence on relationships with travel suppliers, primarily airlines and Expedia, dependence on third-party technology providers, exposure to risks associated with online commerce security and payment related fraud. We also rely on global distribution systems (“GDS”) providers and other third-party service providers for certain fulfillment services.

Financial instruments, which potentially subject the Company to concentration of credit risk, mainly consist of cash and cash equivalents and accounts receivable.

We maintain cash and cash equivalents balances in financial institutions that we believe are high credit quality. Our receivables are settled mainly through customer credit cards and debit cards. We maintain allowance for doubtful accounts based on management’s evaluation of various factors, including the credit risk of customers, historical trends and other information. See Note 9 for details.

Seasonality

We generally experience seasonal fluctuations in the demand for our travel services. The majority of our operations, such as Brazil and Argentina, are located in the Southern hemisphere where summer runs from December 1 to February 28 and winter runs from June 1 to August 31. Our most significant market in the Northern hemisphere is Mexico where summer runs from June 1 to August 31 and winter runs from December 1 to February 28. Accordingly, traditional leisure travel bookings in the Southern hemisphere are generally the highest in the second and fourth quarters of the year as travelers plan and book their winter and summer holiday travel. The number of bookings typically decreases in the first quarter of the year. In the Northern hemisphere, bookings are generally the highest in the first three quarters as travelers plan and book their spring, summer and winter holiday travel. The seasonal revenue impact is exacerbated with respect to income by the nature of variable cost of revenue and direct sales and marketing costs, which is typically realized in closer alignment to booking volumes, and the more stable nature of fixed costs.

The continued growth of international operations or a change in product mix may influence the typical trend of the seasonality in the future, and there may also be business or market driven dynamics that result in short-term impacts to revenue or profitability that differ from the typical seasonal trends.

Revenues, expenses, assets and liabilities can vary during each quarter of the year. Therefore, the results and trends in these consolidated financial statements may not be the same as those for any subsequent quarter or the full year.

Due to the COVID-19 pandemic, which led to significant cancellations for future travel during the first half of 2020 and impacted new travel bookings for the majority of 2020, we have not experienced our typical seasonal pattern for bookings, revenue and profit during the year ended December 31, 2020. In addition, with the decrease in new bookings and elevated cancellations in the merchant business model, our typical, seasonal working capital source of cash has been significantly disrupted resulting in unfavorable working capital trends and material negative cash flow since the second quarter of 2020 when we typically generate significant positive cash flow. It is difficult to forecast the seasonality for the upcoming quarters given the uncertainty related to the duration of the impact from the COVID-19 pandemic and the shape and timing of any sustained recovery. In addition, we are experiencing much shorter booking windows, which could also impact the seasonality of our working capital and cash flow.

The accompanying notes are an integral part of these consolidated financial statements.

F-14

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

3. Summary of significant accounting policies

Revenue recognition

We offer traditional travel services on a stand-alone and package basis generally either through the pre-pay/merchant or the pay-at-destination/agency business models. We primarily generate revenue as a result of facilitation services, either directly or through the use of affiliated travel agencies. We consider both the traveler and the travel supplier as our customers.

Under the pre-pay/merchant model, we provide travelers access to book hotel rooms, airline seats, car rentals and destination services through our contracts with our network of travel suppliers. Our travelers pay us for merchant transactions generally when they book the reservation. We pay our travel suppliers later, generally when the travelers use the travel service. Under these transactions, we generally earn a commission from travel suppliers and service fees from travelers. Travel suppliers generally bill us for travel products sold within a 12-month period from check-out date. We recognize breakage incremental revenue from unbilled amounts when the period expires. Our revenues under the pre-pay/merchant model represented more than 75% of our total consolidated revenues for all years presented.

Under the pay-at-destination/agency model, travelers pay the travel supplier directly at destination and travel suppliers pay us our earned commissions later, generally after checkout. We receive service fees from travelers up front. Our revenue under the pay-at-destination/agency model represented less than 5% of our total consolidated revenues for all years presented.

Our primary sources of revenue are commissions and service fees, incentive fees and advertising comprising more than 90% of our consolidated revenue for all years presented.    

Commissions and service fees

We facilitate our travel suppliers the sale of their travel products and services to our travelers and travel agencies. We generally receive commissions in consideration of our facilitation services. Generally, we charge a service fee to our travelers, although this may vary depending on marketing strategies. We do not provide significant post-booking services to travelers. We consider any post-booking services beyond minor inquiries or minor administrative changes to the reservation (i.e. modifications to the original terms of the reservations) as new bookings. Accordingly, we may charge a new booking fee and administrative fees for these services. Also, if the requested change results in an incremental price of the reservation to the traveler set by the travel supplier, we receive an incremental commission from the travel supplier.

We recognize revenue upon the transfer of control of the promised facilitation services to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for those facilitation services. Generally, we recognize revenue when the booking is completed, paid and confirmed, less a reserve for cancellations based on historical experience.

The accompanying notes are an integral part of these consolidated financial statements.

F-15

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

We present revenue on a net basis for the majority of our transactions because the travel supplier is primarily responsible for providing the underlying travel services, we do not control the service or travel product provided by the travel supplier to the traveler and we do not bear inventory risk. Taxes assessed by a government authority, if any, are excluded from the measurement of transaction prices that are imposed on the travel related services or collected from customers (which are therefore excluded from revenue). We present revenue on a gross basis for some bookings when we pre-purchase flight seats. These transactions have been limited to date.

We partner with banks to allow our travelers the possibility of purchasing the product of their choice through financing plans established, offered and administered by such banks. Banks bear full risk of fraud, delinquency or default by travelers. When travelers elect to finance their purchases, we typically receive full payment for our services within a short period of time after booking is completed and confirmed, regardless of the payment plan selected by the traveler. However, in certain countries, we receive payment from the bank as installments become due regardless of when traveler actually makes the scheduled payments. In most cases, we receive payment before travel occurs or during travel and the period between completion of booking and reception of scheduled payments is typically one year or less. We have made use of the practical expedient in ASC 606-10-32-18 and we do not adjust the amount of consideration for the effects of a significant financing component. Beginning in late August 2020, we began providing financing to certain risk-profiled travelers only in Brazil. This activity has been very limited to date.

Our revenue from commissions and service fees represented 77%, 81% and 81% of our total consolidated revenues for the years ended December 31, 2020, 2019 and 2018, respectively.

Incentive fees

We may receive incentive fees from our travel suppliers or GDS providers if we meet certain performance conditions, for example contractually agreed volume thresholds. We recognize revenue on an accrual basis in accordance with the achievement of contractual thresholds on a case-by-case basis.

Incentive fee revenues represented 13%, 14% and 15% of our total consolidated revenues for the years ended December 31, 2020, 2019 and 2018, respectively.

Advertising

We record advertising revenue ratably over the advertising period or upon delivery of advertising material, depending on the terms of the advertising agreement.

Advertising revenues represented 4%, 3% and 3% of our total consolidated revenues for the years ended December 31, 2020, 2019 and 2018, respectively.

Other revenue:

We also derive revenue from other sources. Our other sources of revenue are not material:

The accompanying notes are an integral part of these consolidated financial statements.

F-16

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

Destination services

In October 2020 we began offering tours, activities and transportation services to travelers through a fleet of dedicated vans. We recognize revenue as services are provided. We present revenue on a gross basis for these transactions because we are the primary responsible for providing the underlying travel services. Our destination services represented 2% of our total consolidated revenue for the year ended December 31, 2020.

Loyalty revenue

In late 2019 we began to operate a loyalty program through which we award loyalty points to travelers who complete purchases on our websites or use the services of other program participants, such bank co-branded credit cards. Loyalty points can be redeemed for free or discounted travel products.

For loyalty points earned through travel product purchases, we apply a relative selling price approach whereby the total amount collected from each travel product sale is allocated between the travel product and the loyalty points earned. The portion of each travel product sale attributable to loyalty points is initially deferred and then recognized in loyalty revenue when the points are redeemed. Due to our recent launch of our loyalty program, lack of historical data and redemption patterns, we recognize breakage when the likelihood of the traveler exercising its remaining rights becomes remote.

For loyalty points earned through co-branded credit card partners, consideration received from the sale of loyalty points is variable and payment terms typically are within 30 days subsequent to the month of sale of loyalty points. Sales of loyalty points to business partners are comprised of two components: loyalty points and marketing (i.e. the use of intellectual property, including our brand and access to customer lists and databases, which is the predominant element in the agreements, as well as advertising, collectively, the marketing component). We allocate the consideration received from these sales of loyalty points based on the relative selling price of each product or service delivered. Accordingly, we recognize the marketing component in other revenue in the period of the loyalty points sale following the sales-based royalty method. The loyalty points component is initially deferred and then recognized in revenue when points are redeemed. This activity has been limited to date.

Interest revenue

Revenue from interest earned on financing granted to certain risk-profiled customers in Brazil is recognized over the term of the financing and is based on effective interest rates. This activity has been immaterial and very limited to date.

In the aggregate, these other revenues represented 6%, 2% and 1% of our total consolidated revenues for the years ended December 31, 2020, 2019 and 2018, respectively.

Cash and cash equivalents

Cash and cash equivalents include cash on hand, deposits held with banks and other short-term liquid investments with original maturities of three months or less. Gains or losses on short-term investments are recognized in financial expenses or financial income when incurred.

The accompanying notes are an integral part of these consolidated financial statements.

F-17

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

Accounts receivable and allowances

Accounts receivable are generally due within thirty days and are recorded net of an allowance for expected uncollectible amounts. We consider accounts outstanding longer than the contractual payment terms as past due. The risk characteristics we generally review when analyzing our accounts receivable pools primarily include the country of origin, type of receivable, collection terms and historical or expected credit loss patterns. For each pool, we make estimates of expected credit losses for our allowance by considering a number of factors, including the length of time trade accounts receivable are past due, previous loss history continually updated for new collections data, the credit quality of our customers, current economic conditions, reasonable and supportable forecasts of future economic conditions and other factors that may affect our ability to collect from customers. The provision for estimated credit losses is recorded as “General and administrative” expenses in our consolidated statements of income. During the year ended December 31, 2020, we recorded $7,199 of incremental allowance for expected uncollectible amounts, including estimated future losses in consideration of the impact of COVID-19 pandemic on the economy and the Company. Actual future bad debt could differ materially from this estimate resulting from changes in our assumptions of the duration and severity of the impact of the COVID-19 pandemic. See Note 9 for a discussion of the adoption of ASC ASU 2016-13 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASC 326”).

Property and equipment, net

We record property and equipment at acquisition cost, net of accumulated depreciation. We compute depreciation using the straight-line method over the estimated useful lives of the assets. Land is not depreciated. We depreciate leasehold improvement using the straight-line method, over the shorter of the estimated useful life of the improvement or the remaining term of the lease.

The estimated useful lives (in years) of the main categories of our property and equipment are as follows:

Asset	Estimated useful life (years)
Computer hardware	3
Vans	4
Office furniture and fixture	10
Buildings	50

Expenditures for repairs and maintenance are charged to expense as incurred. The cost of significant renewals and improvements is added to the carrying amount of the respective asset and it is depreciated over the life of the contract.

When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in our consolidated statements of income.  

The accompanying notes are an integral part of these consolidated financial statements.

F-18

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

Business combinations

We use the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred, and the equity interests issued, if any. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred. We assign the value of the consideration transferred to acquire a business to the tangible assets and identifiable intangible assets acquired and liabilities assumed on the basis of their fair values at the date of acquisition. Any excess purchase price over the fair value of the net tangible and intangible assets acquired is allocated to goodwill. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets. Critical estimates in valuing certain intangible assets include but are not limited to future expected cash flows from customer relationships and trademarks and tradenames, and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.

We have a period of 12 months as from the date of acquisition (the “measurement period”) to finalize the accounting for a business combination. We report provisional amounts when the accounting for a business combination is not complete by the end of the reporting period in which the business combination occurred. Any changes to provisional amounts identified during the measurement period are recognized in the reporting period in which the adjustment amounts are determined.

Goodwill

We record goodwill as the amount by which the aggregate of the fair value of consideration transferred, the acquisition date fair value of any previously held interest and any non-controlling interest exceeds the fair value of the assets and liabilities acquired. Goodwill is not subject to amortization and is tested at least annually for impairment, or earlier if an event occurs or circumstances change and there is an indication of impairment.

See Note 13 for further information.

Intangible assets, net

Intangible assets acquired in business combinations are initially recorded at fair value. We determine the fair value of intangible assets using standard valuation techniques, including the income approach (discounted cash flows) and/or market approach, as considered appropriate, and based on market participant assumptions.

Indefinite-lived intangible assets such as certain trademarks and tradenames are not subject to amortization and are tested at least annually for impairment, or earlier if an event occurs or circumstances change and there is an indication of impairment.

Definite-lived intangible assets such as customer relationships, licenses and certain trademarks and tradenames are amortized over their respective estimated useful lives.

We also capitalize certain direct development costs associated with website and internal-use developed technology and include external direct costs of services and payroll costs for employees devoting time to the software projects principally related to platform development, including support systems, software coding, designing system interfaces and installation and testing of the software. These costs are recorded as definite-lived intangible assets and are generally amortized over a period of 3 to 10 years beginning when the asset is substantially ready for use. Costs incurred for enhancements that are expected to result in additional features or functionalities are capitalized and amortized over the estimated useful life of the enhancements. Costs incurred during the preliminary project stage, as well as maintenance and training costs, are expensed as incurred.

See Note 12 for further information.

The accompanying notes are an integral part of these consolidated financial statements.

F-19

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

Recoverability of goodwill and indefinite-lived intangible assets

Goodwill is assigned to reporting units that are expected to benefit from the synergies of the business combination as of the acquisition date. We assess goodwill and indefinite-lived intangible assets, neither of which is amortized, for impairment annually as of December 31, or more frequently, if events and circumstances indicate impairment may have occurred. In the evaluation of goodwill for impairment, we typically perform a quantitative assessment and compare the fair value of the reporting unit to its carrying value. An impairment charge is recorded based on the excess of the reporting unit’s carrying amount over its fair value. Periodically, we may choose to perform a qualitative assessment, prior to performing the quantitative analysis, to determine whether the fair value of the goodwill is more likely than not impaired.

We generally base our measurement of fair value of reporting units on an analysis of the present value of future discounted cash flows and market valuation approaches, as appropriate. The discounted cash flows model indicates the fair value of the reporting units based on the present value of the cash flows that we expect the reporting units to generate in the future. Our significant estimates in the discounted cash flows model include: our weighted average cost of capital; long-term rate of growth and profitability of our business; and working capital effects. The market valuation approach indicates the fair value of the business based on a comparison of the Company to comparable publicly traded firms in similar lines of business. Our significant estimates in the market approach model include identifying similar companies with comparable business factors such as size, growth, profitability, risk and return on investment and assessing comparable revenue and operating income multiples in estimating the fair value of the reporting units.

We believe the discounted cash flows and market approaches are the best methods for determining the fair value of our reporting units because these are the most common valuation methodologies used within the travel and internet industries.

In addition to measuring the fair value of our reporting units as described above, we consider the combined carrying and fair values of our reporting units in relation to our total fair value of equity plus debt as of the assessment date. Our equity value assumes our fully diluted market capitalization, using either the stock price on the valuation date or the average stock price over a range of dates around the valuation date, plus an estimated acquisition premium which is based on observable transactions of comparable companies. The debt value is based on the highest value expected to be paid to repurchase the debt, which can be fair value, principal or principal plus a premium depending on the terms of each debt instrument.

In our evaluation of our indefinite-lived intangible assets, we typically first perform a quantitative assessment and an impairment charge is recorded for the excess of the carrying value of indefinite-lived intangible assets over their fair value, if necessary. We base our measurement of fair value of indefinite-lived intangible assets, which primarily consist of trade name and trademarks, using the relief-from-royalty method. As with goodwill, periodically, we may choose to perform a qualitative assessment, prior to performing the quantitative analysis, to determine whether the fair value of the indefinite-lived intangible asset is more likely than not impaired.

See Notes 12 and 13 for further information.

The accompanying notes are an integral part of these consolidated financial statements.

F-20

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

Recoverability of intangible assets with definite lives and other long-lived assets

Intangible assets with definite lives and other long-lived assets are carried at cost and are amortized on a straight-line basis over their estimated useful lives of 3 to 10 years and 50 years for buildings. We review the carrying value of long-lived assets or asset groups, including property and equipment, to be used in operations whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. Factors that would necessitate an impairment assessment include a significant adverse change in the extent or manner in which an asset is used, a significant adverse change in legal factors or the business climate that could affect the value of the asset, or a significant decline in the observable market value of an asset, among others. If such facts indicate a potential impairment, we would assess the recoverability of an asset group by determining if the carrying value of the asset group exceeds the sum of the projected undiscounted cash flows expected to result from the use and eventual disposition of the assets over the remaining economic life of the primary asset in the asset group. If the recoverability test indicates that the carrying value of the asset group is not recoverable, we will estimate the fair value of the asset group using appropriate valuation methodologies which would typically include an estimate of discounted cash flows. Any impairment would be measured as the difference between the asset groups carrying amount and its estimated fair value.

Assets held for sale, to the extent we have any, are reported at the lower of cost or fair value less costs to sell.

See Notes 11 and 12 for further information.

Equity method investments

We use the equity method to account for investments in companies, if our investment provides us with the ability to exercise significant influence, but not control, over operating and financial policies of the investee. Our judgment regarding the level of influence over each equity method investment includes considering key factors such as our ownership interest, representation on the board of directors, participation in policy-making decisions and material intercompany transactions. We include the total of our investments in equity-method investees, including identifiable intangible assets, deferred tax liabilities, and goodwill, if any, within “Non-current other assets” in our consolidated balance sheets. We include our proportionate share of earnings and/or losses of our equity method investees in “Loss from equity investments” in our consolidated statements of income.

In the event that net losses of the investee reduce our equity-method investment carrying amount to zero, additional net losses may be recorded if we have committed to provide financial support to the investee. We regularly evaluate these investments, which are not carried at fair value, for other-than-temporary impairment. We also consider whether our equity-method investments generate sufficient cash flows from their operating or financing activities to meet their obligations and repay their liabilities when they come due. When our share in the net assets of associates is negative, we include the balance within “Non-current other liabilities” in our consolidated balance sheets. In the event we no longer have the ability to exercise significant influence over an equity-method investee, we would discontinue accounting for the investment under the equity method.

The accompanying notes are an integral part of these consolidated financial statements.

F-21

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

Redeemable non-controlling interests

We have a non-controlling interest in a majority owned entity which was valued at fair value at acquisition date. The non-controlling interest contains certain rights, whereby we have the right but not the obligation to acquire, and the minority shareholders have the right but not the obligation to sell to us, the additional shares of the company for cash at a fixed price other than fair value. The non-controlling interest is not currently redeemable, but it is probable of becoming redeemable (the redemption depends solely on the passage of time). Accordingly, we record the non-controlling interest at the greater of (i) its acquisition date fair value as adjusted for its share (if any) of earnings, losses, or dividends or (ii) an accreted value from the date of the acquisition to the earliest redemption date, February 20, 2022. The accretion of the non-controlling interest to February 20, 2022 is recorded using the interest method.

We adopted a policy to charge the carrying value adjustment to retained earnings or, absent retained earnings, additional paid-in capital and will reduce net income available to our common shareholders in the calculation of earnings per share in accordance with the two-class method. We record the non-controlling interest amount in the “mezzanine” section of our consolidated balance sheet as of December 31, 2020, outside of shareholders’ equity.

The details of the balances and changes in the redeemable non-controlling interest are presented in Note 5.

Travel accounts payable

Travel accounts payable comprises trade accounts payable to airlines, hotels and other travel suppliers for products and services offered. Airline suppliers are generally within thirty days of a confirmed air booking reservation. Under the pre-pay model, hotel suppliers are generally paid after traveler checks out. Generally, our contracts with hotels and other suppliers provide for a 12-month time period for invoicing us for past services. If an invoice is not received after that period, we recognize breakage revenue for the unbilled payable.

Severance payments

We recognize a liability for severance payments if the following criteria are met: (a) management, having the authority to approve the action, commits to a plan of termination; (b) the plan identifies the number of employees to be terminated, their job classifications or functions and their locations, and the expected completion date; (c) the plan establishes the terms of the benefit arrangement, including the benefits that employees will receive upon termination, in sufficient detail to enable employees to determine the type and amount of benefits they will receive if they are involuntarily terminated; (d) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn; and (e) the plan has been communicated to employees.

The accompanying notes are an integral part of these consolidated financial statements.

F-22

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

Pension information

We do not maintain any pension plans. Certain countries in which we operate provide for pension benefits to be paid to retired employees from government pension plans and/or private pension plans. Amounts payable to such plans are accounted for on an accrual basis.

Contingent liabilities

We have a number of tax, regulatory and legal matters outstanding, as discussed further in Note 21.

Periodically, we review the status of all significant outstanding matters to assess the potential financial exposure. When (i) it is probable that an asset has been impaired or a liability has been incurred and (ii) the amount of the loss can be reasonably estimated, we record the estimated loss in our consolidated statements of income. We provide disclosure in the notes to the consolidated financial statements for loss contingencies that do not meet both of these conditions if there is a reasonable possibility that a loss may have been incurred that would be material to the financial statements. Significant judgment is required to determine the probability that a liability has been incurred and whether such liability is reasonably estimable. We base accruals made on the best information available at the time which can be highly subjective. The final outcome of these matters could vary significantly from the amounts included in the accompanying consolidated financial statements.

Derivative financial instruments

We carry derivative instruments at fair value on our consolidated balance sheets. The fair values of the derivative financial instruments generally represent the estimated amounts we would expect to receive or pay upon termination of the contracts as of the reporting date. As of December 31, 2020 and 2019, our derivative instruments primarily consisted of foreign currency forward contracts. We are exposed to various market risks that may affect our consolidated results of operations, cash flows and financial position. These market risks include, but are not limited to, fluctuations in foreign currency exchange rates. Our primary foreign currency exposures are to the currencies of Argentina, Brazil and Mexico, in which we conduct a significant portion of our business activities. As a result, we face exposure to adverse movements in foreign currency exchange rates as the results of our international operations are translated from local currencies into U.S. dollars upon consolidation. Additionally, foreign currency exchange rate fluctuations on transactions denominated in currencies other than the functional currency of an entity result in gains and losses that are reflected in net income.

We use foreign currency forward contracts to economically hedge these exposures. Our goal in managing our foreign exchange risk is to reduce, to the extent practicable, our potential exposure to the changes that exchange rates might have on our earnings, cash flows and financial position. Our foreign currency forward contracts are typically short-term and, as they do not qualify for hedge accounting treatment, we classify the changes in their fair value in “Financial income / (expense), net” in our consolidated statements of income in the period that the changes occur and are classified within “Net cash provided by operating activities” in our consolidated statements of cash flows. We do not hold or issue financial instruments for speculative or trading purposes. We report the fair value of our derivative assets and liabilities on a gross basis in our consolidated balance sheets in “Other assets and prepaid expenses” and “Other liabilities”, respectively.

The accompanying notes are an integral part of these consolidated financial statements.

F-23

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

Leases

We determine if an arrangement is a lease, or contains a lease, at inception. Operating leases are primarily for office space, customer service centers and a fleet of dedicated vans, and, as of January 1, 2019 with the adoption of the new guidance for leasing arrangements, are included in operating lease right-of-use (“ROU”) assets, accrued expenses and other current liabilities, and operating lease liabilities on our consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

For operating leases with a term of one year or less, we have elected to not recognize a lease liability or ROU asset on our consolidated balance sheet. Instead, we recognize the lease payments as expense on a straight-line basis over the lease term. Short-term lease costs are immaterial to our consolidated statements of operations and cash flows.

Our lease agreements have insignificant non-lease components and accordingly we have elected the practical expedient to combine and account for lease and non-lease components as a single lease component.

Financial income / (expense), net

We incur in financial results such as factoring interest and commissions on receivables, gains or losses on derivative financial instruments, interest income from financial investments, interest paid on financial liabilities and foreign exchange gains or losses.

Stock-based compensation

We measure and amortize the fair value of restricted stock units (“RSUs”) and stock options as follows:

Restricted Stock Units. RSUs are stock awards that are granted to employees entitling the holder to shares of common stock as the award vests, typically over a 3 or 4-year period, but may accelerate in certain circumstances. During the year ended December 31, 2020, we started issuing RSUs as our primary form of stock-based compensation, some of them vest 33% after one year and others vest 25% after one year and will then vest yearly over the following 3 or 4 years, as appropriate. We measure the value of RSUs at fair value based on the number of shares granted and the quoted price of our common stock at the date of grant. We amortize the fair value as stock-based compensation expense over the vesting term on a straight-line basis.

Stock Options. Our employee stock options consist of service-based awards. We measure the value of stock options issued or modified, including unvested options assumed in acquisitions, if any, on the grant date (or modification or acquisition dates, if applicable) at fair value, using appropriate valuation techniques, including the Black-Scholes and Monte Carlo option pricing models. The Black-Scholes valuation models incorporate various assumptions including expected volatility, expected term and risk-free interest rates.

The accompanying notes are an integral part of these consolidated financial statements.

F-24

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

The expected volatility is based on historical volatility of our common stock and other relevant factors. We base our expected term assumptions on our historical experience and on the terms and conditions of the stock awards granted to employees. We amortize the fair value over the remaining explicit vesting term in the case of service-based awards. The majority of our stock options vest over 6 years.

Estimates of fair value are not intended to predict actual future events or the value ultimately realized by employees who receive these awards, and subsequent events are not indicative of the reasonableness of our original estimates of fair value.

Marketing and advertising expenses

We incur advertising expense consisting of offline costs, including television and radio advertising, and online advertising expense to promote our business. We expense the production costs associated with advertisements in the period in which the advertisement first takes place. We expense the costs of advertisement in the period during which the advertisement space or airtime is consumed. Internet advertising expenses are recognized based on the terms of the individual agreements, which is generally over the greater of (i) the ratio of the number of clicks delivered over the total number of contracted clicks, on a pay-per-click basis, or (ii) on a straight-line basis over the term of the contract. Our advertising expenses were $27,661, $147,693 and $151,372 for the years ended December 31, 2020, 2019 and 2018, respectively.

Accounting for income taxes

We are organized as a British Virgin Islands corporation. However, under the “anti-inversion” rules of Section 7874 of the U.S. Internal Revenue Code, we are treated as a U.S. corporation for U.S. federal tax purposes. Accordingly, we are subject to U.S. federal income tax on our worldwide income. We are subject to foreign income taxes in the jurisdictions where we operate in accordance with the respective local tax laws.

We account for income taxes under the asset and liability method that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in our financial statements or tax returns. Judgment is required in assessing the future tax consequences of events that have been recognized in our financial statements or tax returns. Variations in the actual outcome of these future tax consequences could materially impact our financial position, results of operations or effective tax rate.

Significant judgment is required in determining our worldwide income tax provision. In the ordinary course of a global business, there are many transactions and calculations where the ultimate tax outcome is uncertain. Some of these uncertainties arise as a consequence of revenue sharing and cost reimbursement arrangements among related entities, the process of identifying items of revenues and expenses that qualify for preferential tax treatment, and segregation of foreign and domestic earnings and expenses to avoid double taxation. Although we believe that our estimates are reasonable, the final tax outcome of these matters could be different from that which is reflected in our historical income tax provisions and accruals. Such differences could have a material effect on our income tax provision and net income in the period in which such determination is made.

The accompanying notes are an integral part of these consolidated financial statements.

F-25

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

In estimating future tax consequences, all expected future events are considered other than enactments of changes in tax laws or rates. Valuation allowances are established when necessary to reduce deferred tax assets to amounts which are more likely than not to be realized. We consider future growth, forecasted earnings, future taxable income, the mix of earnings in the jurisdictions in which we operate, historical earnings, the carryforward periods available for tax reporting purposes and prudent and feasible tax planning strategies in determining the need for a valuation allowance. In the event we were to determine that we would not be able to realize all or part of our net deferred tax assets in the future, an adjustment to the deferred tax assets valuation allowance would be charged to earnings in the period in which we make such a determination, or goodwill would be adjusted at our final determination of the valuation allowance related to an acquisition within the measurement period. If we later determine that it is more likely than not that the net deferred tax assets would be realized, we would reverse the applicable portion of the previously provided valuation allowance as an adjustment to earnings at such time.

The amount of income tax we pay is subject to ongoing audits by federal, state and foreign tax authorities, which often result in proposed assessments. Our estimate of the potential outcome for any uncertain tax issue is highly judgmental. We account for these uncertain tax issues pursuant to ASC 740, Income Taxes, which contains a two-step approach to recognizing and measuring uncertain tax positions taken or expected to be taken in a tax return. The first step is to determine if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. Although we believe we have adequately reserved for our uncertain tax positions, no assurance can be given with respect to the final outcome of these matters. We adjust reserves for our uncertain tax positions due to changing facts and circumstances, such as the closing of a tax audit, judicial rulings, refinement of estimates or realization of earnings or deductions that differ from our estimates. To the extent that the final outcome of these matters is different than the amounts recorded, such differences generally will impact our provision for income taxes in the period in which such a determination is made. Our provisions for income taxes include the impact of reserve provisions and changes to reserves that are considered appropriate and also include the related interest and penalties.

We treat taxes on global intangible low-taxed income (“GILTI”) introduced by the U.S. Tax Cuts and Jobs Act (the “Tax Act”) as period costs.

See Note 19 for further information.

Earnings per share

We compute basic earnings per share by dividing our net loss or income for the year attributable to Despegar.com, Corp. common shareholders, as adjusted for preferred stock accretion and dividends accrued, by our weighted-average outstanding common shares during the year on a basic and diluted basis. Since we issue warrants for nominal consideration which vest and are exercisable as from the issuance date, we include the shares of common stock underlying the outstanding warrants when calculating our basic earnings per share.

We compute diluted earnings per share using our weighted-average outstanding common shares including the dilutive effect of stock options and convertible preferred stock as determined under the if-converted method. In periods when we recognize a net loss, we exclude the impact of outstanding stock awards and convertible preferred stock from the diluted loss per share calculation as their inclusion would have an antidilutive effect.

The accompanying notes are an integral part of these consolidated financial statements.

F-26

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

We present basic and diluted earnings per share using the two-class method required for participating securities. We consider that our Series B preferred stock to be participating securities and, in accordance with the two-class method, earnings allocated to participating securities and the related number of outstanding shares of participating securities are excluded from the computation of basic and diluted net loss per common share. If a dividend is paid on common stock, the holders of Series B preferred stock are entitled to a proportionate share of any such dividend as if they were holders of common stock (on an if-converted basis). As the holders of our Series B preferred stock do not have contractual obligation to share in the losses of the Company, the net loss attributable to common stockholders for each period is not allocated between common stock and participating securities. Accordingly, preferred stock is excluded from the calculation of basic and diluted net loss per share as the effect would have been antidilutive.

For additional information on how we compute earnings per share, see Note 24.

Fair value recognition, measurement and disclosure

The carrying amounts of cash and cash equivalents and restricted cash reported on our consolidated balance sheets approximate fair value as we maintain them with various high-quality financial institutions. The accounts receivable are short-term in nature and are generally settled shortly after the sale.

We disclose the fair value of our financial instruments based on the fair value hierarchy using the following three categories:

Level 1 — Valuations based on quoted prices for identical assets and liabilities in active markets.

Level 2 — Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3 — Valuations based on unobservable inputs reflecting the Company’s own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

For additional information on items measured at fair value on a recurring or non-recurring basis, see Note 23.

The accompanying notes are an integral part of these consolidated financial statements.

F-27

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

Recently adopted accounting policies

Simplifying the Test for Goodwill Impairment

In January 2017, the Financial Accounting Standards Board (“FASB”) issued a new accounting update to simplify the test for goodwill impairment. The revised guidance eliminates the previously required step two of the goodwill impairment test, which required a hypothetical purchase price allocation to measure goodwill impairment. Under the revised guidance, a goodwill impairment loss will be measured at the amount by which a reporting unit’s carrying amount exceeds its fair value, not to exceed the carrying amount of goodwill. In addition, income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. The amendments also eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. We adopted and applied this update in the first quarter of 2020.

Measurement of Credit Losses on Financial Instruments

In June 2016, the FASB issued a new accounting update on the measurement of credit losses for certain financial assets measured at amortized cost and available-for-sale debt securities. For financial assets measured at amortized cost, this update requires an entity to (1) estimate its lifetime expected credit losses upon recognition of the financial assets and establish an allowance to present the net amount expected to be collected, (2) recognize this allowance and changes in the allowance during subsequent periods through net income and (3) consider relevant information about past events, current conditions and reasonable and supportable forecasts in assessing the lifetime expected credit losses. We adopted this update in the first quarter of 2020 and applied it on a modified retrospective basis. The adoption did not have a material impact on our consolidated financial statements. See Note 9 for details of the adoption of the new standard.

Disclosure requirements on fair value measurements

In August 2018, the FASB issued ASU 2018-13 “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement”. The update is related to the disclosure requirements on fair value measurements, which removes, modifies or adds certain disclosures. We adopted this update in the first quarter of 2020 and applied it on a prospective basis. The adoption did not have a material impact on our consolidated financial statements.

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract

In August 2018, the FASB issued a new accounting standard to address a customer’s accounting for implementation costs incurred in a cloud computing arrangement that is a service contract and also added certain disclosure requirements related to implementation costs incurred for internal-use software and cloud computing arrangements. The amendment aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). We adopted this update in the first quarter of 2020 and applied it on a prospective basis. The adoption did not have a material impact on our consolidated financial statements.

The accompanying notes are an integral part of these consolidated financial statements.

F-28

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

Recent accounting policies not yet adopted

Simplifying the Accounting for Income Taxes

In December 2019, the FASB issued a new accounting update relating to income taxes. This update provides an exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. This update also (1) requires an entity to recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax, (2) requires an entity to evaluate when a step-up in the tax basis of goodwill should be considered part of the business combination in which goodwill was originally recognized for accounting purposes and when it should be considered a separate transaction, and (3) requires that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. For public business entities, this update is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. The amendment related to franchise taxes that are partially based on income should be applied on either a retrospective basis for all periods presented or a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. All other amendments should be applied on a prospective basis. We have evaluated the impact to our consolidated financial statements of adopting this update and we do not expect it to have a material impact.

4. Acquisitions

2020 Acquisition Activity

During the year ended December 31, 2020, we completed two business combinations, as follows:

Acquisition of Best Day Group

On October 1, 2020 (the “Closing Date”), we consummated the acquisition of the 100% equity interests of Viajes Beda and Transporturist, both companies organized under the laws of Mexico (collectively the “Acquisition”), pursuant to an Amended and Restated Stock Purchase Agreement dated June 11, 2020, as further amended on September 9, 2020 (the “Acquisition Agreement”). Viajes Beda primarily operates in Mexico and to a lesser extent in South America, including Argentina, Brazil and Uruguay among others, and the United States. Transporturist primarily operates in Mexico. Viajes Beda and Transporturist are collectively referred to as the “Best Day Group”.

The Best Day Group primarily provides travelers with several product offerings, including airline tickets, packages, hotels and other travel-related products, through its online platforms, call centers and offline presence, and provides travel suppliers a technology platform for managing the distribution of their travel products and access to traveler customers. The Best Day Group also provides ground transportation services and group tours to travelers principally across the main tourist destinations in Mexico and the Dominican Republic. The Best Day Group offers these travel products and services through its brands “Best Day” and “BD Experience”. In addition, the Best Day Group offers hotel inventory, as well as transfers, activities, car rental, packages and tours to travel agencies through its tradename “HotelDo”. Also, the Best Day Group provides white label services for major travel vendors, including exclusive partnerships with the largest Mexican airlines operating their packages platforms.

The purchase price was fixed at $10,288 after application of net indebtedness and working capital adjustments and will be payable in cash on October 1, 2023. In addition, the Acquisition Agreement provides for an earnout for the benefit of certain sellers ranging from $0 to $20,000 based solely on the performance of our share price during a measurement period of six months prior to the fourth anniversary of the Closing Date. The earnout, if any, will be payable in cash on October 1, 2024.

The accompanying notes are an integral part of these consolidated financial statements.

F-29

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

Under the Acquisition Agreement, the sellers contractually agreed to indemnify us for certain contingencies and uncertain tax positions. We recognized and measured the seller indemnification based on the same basis as the indemnified items. Indemnified items are partially covered by a fixed amount of $10,288 plus any amount payable under the contingent consideration agreement. Changes in the amount recognized for the seller indemnification which are not the result of qualifying measurement-period adjustments, are recognized in earnings in the same period as changes in the indemnified items are recognized. See Note 10.

We have made a preliminary allocation of the estimated purchase price to the tangible and intangible assets acquired and liabilities assumed based on their fair values at acquisition date. The preliminary estimated fair value of assets acquired and liabilities assumed was determined with the assistance of a third-party valuer. Goodwill was recognized as the excess of the aggregate of the fair values of consideration transferred over the fair value of assets acquired and liabilities assumed. We have made significant assumptions and estimates in determining the preliminary estimated purchase price, including the contingent consideration comprising a portion of the total consideration, and the preliminary allocation of the estimated purchase price in these consolidated financial statements. The acquisition accounting is dependent upon certain valuations and other studies that have yet to progress to a stage where there is sufficient information for a definitive measurement. Therefore, these preliminary estimates and assumptions are subject to change during the measurement period as we finalize the valuations of the net intangible and tangible assets. The final allocation may include changes to (1) the fair values of property and equipment; (2) the fair values of customer relationships and off-market components of certain contracts; (3) the recognized amounts of contingencies and liabilities for unrecognized tax benefits; and (4) assets and liabilities, as more information becomes available.

These final valuations may change significantly from our preliminary estimates. Differences between these preliminary estimates and the final acquisition accounting could have a material impact on these consolidated financial statements and our consolidated future results of operations and financial position. We expect to finalize the purchase price allocation during the second quarter ended June 30, 2021.

The accompanying notes are an integral part of these consolidated financial statements.

F-30

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

The following table summarizes the estimated preliminary purchase price:

Consideration:
Fair value of purchase price payable on October 1, 2023		8,642
Fair value of contingent consideration payable on October 1, 2024		1,526
Total consideration as of acquisition date	$	10,168
Recognized amounts of assets acquired and liabilities assumed:
Cash and cash equivalents		5,404
Restricted cash		2,763
Trade accounts receivable, net of credit expected loss		9,122
Related party receivable		2,337
Lease right-of-use assets		7,415
Property and equipment, net		8,836
Intangible assets, net		51,758
Deferred tax assets		12,851
Seller indemnification		11,814
Other assets and prepaid expenses		33,446
Total assets acquired	$	145,746
Accounts payable and accrued expenses		7,948
Travel accounts payable		82,170
Related party payable		266
Short-term and long-term debt		10,618
Lease liabilities		7,955
Contingent liabilities (1)		22,436
Deferred revenue		775
Taxes payable (2)		29,573
Deferred tax liabilities		11,015
Promissory notes issued (3)		13,928
Other liabilities		16,534
Total liabilities assumed	$	203,218
Total net liabilities assumed	$	57,472
Goodwill	$	67,640

(1) Includes $17,933 of identified acquisition-date probable contingencies related to non-income tax and $4,503 of identified acquisition-date probable contingencies related to social security and other matters. Amount reflects the best estimate of probable outcome. See Note 21.

(2) Includes a liability of $28,955 for acquisition-date unrecognized tax benefits related to uncertain tax positions taken by the acquiree prior to our acquisition. See Note 19.

(3) As part of the Acquisition Agreement, we legally assumed a debt that the acquired companies had with its previous shareholders. We issued four promissory notes for an aggregate nominal amount of $14,323 (which fair value was $13,928 as of the date of acquisition). The notes accrue interest at a fixed rate of 5% per annum and will be payable in cash on October 1, 2023.

Intangible assets acquired consisted of the following:

	Amount		Estimated useful life (years)
Trademarks		13,299		20
Domains		204		20
Developed technology		8,206		2.5
Licenses		634		1.3
Customer relationships		29,415		7
Total intangible assets acquired	$	51,758

The useful lives of the intangible assets for amortization purposes was determined considering the period of expected cash flows used to measure the fair value of the intangible assets adjusted as appropriate for the entity-specific factors including legal, regulatory, contractual, competitive, economic or other factors that may limit the useful life of intangible assets.

The accompanying notes are an integral part of these consolidated financial statements.

F-31

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

We used an income approach to measure the fair value of trademarks based on the relief-from-royalty method. The relief-from-royalty valuation method estimates the benefit of ownership of the intangible asset as the “relief” from the royalty expense that would need to be incurred in absence of ownership.

We used a market approach to measure the fair value of domains.

We used a cost approach to measure the fair value of developed technology based on the reproduction cost method, adjusted by a functional obsolescence factor. An additional cross-check analysis based on income approach has also been performed.

We used a replacement cost method to measure the fair value of licenses.

We used an income approach to measure the fair value of customer relationships based on the Multi-Period Excess Earnings Method. The excess earnings look at projected discounted cash flows of the customer relationships, considering estimated attrition rates. These fair value measurements were based on significant inputs not observable in the market and thus represent Level 3 measurements under the fair value hierarchy.

We used a replacement cost method or a market approach, as appropriate, to measure the fair value of fixed assets.

We measure the fair value of the earnout payment using a series of “digital options”. We believe this methodology can be applied because our earnout payment provides for a fixed payment to the sellers if our stock price exceeds a predetermined strike price during the earnout measurement period. In the application of this methodology, we performed a valuation in a risk neutral framework, using a Black-Scholes-Merton Digital call option formula. The significant inputs used were our share price as of the valuation date, our share price historical volatility, U.S. risk free rate, estimated term and credit-risk adjustment spread.

All other net tangible assets were valued at their respective carrying amounts, as we believe that these amounts approximate their current fair values.

A decrease in the fair value of assets acquired, or an increase in the fair value of liabilities assumed, from those preliminary valuations would result in a dollar-for-dollar corresponding increase in the amount of goodwill that will result from the Acquisition. In addition, if the value of the acquired assets is higher than the preliminary values above, it may result in higher depreciation and amortization expense.

Goodwill was primarily attributable to the synergistic value created from the opportunity for additional expansion in Mexico and other businesses where we did not have a presence and is non-deductible for tax purposes.

We incurred $2,856 and $617 of acquisition-related expenses which were included in “General and administrative” expenses in our consolidated statements of income for the years ended December 31, 2020 and 2019, respectively. We report the results of operations of the acquired business within our two reportable segments.

The accompanying notes are an integral part of these consolidated financial statements.

F-32

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

The following table summarizes the revenue and net loss (including purchase accounting amortization and the impact of intercompany eliminations) of the Best Day Group included in our consolidated statements of income for the year ended December 31, 2020 since October 1, 2020, the date of acquisition:

	Period from the date of acquisition to December 31, 2020
Revenue	$	14,125
Net loss	$	(14,983	)

The following pro forma summary presents certain consolidated information as if the acquisition of the Best Day Group had occurred on January 1, 2019:

	For the years ended December 31,
	2020			2019
Revenue	$	165,122		$	658,147
Net loss	$	(242,261	)	$	(38,241	)

These pro forma results include adjustments for purposes of consolidating the historical financial results of the Best Day Group for the periods indicated. These pro forma results also include $5,034 and $6,712 for the years ended December 31, 2020 and 2019, respectively, to reflect the incremental depreciation and amortization as a result of recording property and equipment and intangible assets at fair value. These pro forma results do not represent financial results that would have been realized had the acquisition actually occurred on January 1, 2019, nor are they intended to be a projection of future results.

Acquisition of Koin

On August 20, 2020, we completed the acquisition of an 84% equity interest in Koin Administradora de Cartões e Meios de Pagamentos S.A., a company incorporated under the laws of Brazil (“Koin”). Koin is a payment fintech which offers a financing solution to merchants’ customers, predominantly in the travel sector in Brazil.

We effected the acquisition through conversion of an outstanding trade receivable we had with Koin for $977 as of the acquisition date. The former owners remained as non-controlling shareholders of a 16% equity interest in Koin.

As part of the acquisition, we and the non-controlling shareholders entered into a Shareholders’ Agreement under which we have the option, but not the obligation, to purchase the non-controlling interest during a period of 36 months as from the acquisition date at a fixed price of $4,320. In addition, the non-controlling shareholders have the option, but not the obligation, to sell their shares back to us during a period commencing on February 20, 2022 and ending August 21, 2023 for a fixed price in cash of $2,880.

The accompanying notes are an integral part of these consolidated financial statements.

F-33

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

We allocated the purchase price to identifiable tangible and intangible assets acquired and liabilities assumed, and redeemable non-controlling interest based on their fair values at acquisition date. Goodwill was recognized as the excess of the aggregate of the fair values of consideration transferred and the redeemable non-controlling interest over the fair value of assets acquired and liabilities assumed. The acquisition date fair value of the redeemable non-controlling interest was estimated at $2,655, which was calculated using an option pricing model and generally reflected the net present value of the expected future fixed redemption amount. Intangible assets include $593 allocated to trademarks and $150 allocated to developed technology.

In determining the fair value of assets acquired and liabilities assumed, we primarily used discounted cash flow analyses. Inputs to the discounted cash flow analyses and other aspects of the allocation of purchase price require judgment. The more significant inputs used in the discounted cash flow analyses and other areas of judgment include projected revenues, costs and expenses, working capital, capital expenditures and discount rate.

Goodwill was primarily attributable to the assembled workforce of Koin and synergistic value created from the opportunity for additional expansion and is not deductible for tax purposes.

The following table presents the final purchase price allocation as of December 31, 2020:

Consideration:
Fair value of purchase price	$	977
Redeemable non-controlling interest:	$	2,655
Recognized amounts of assets acquired and liabilities assumed:
Cash and cash equivalents		322
Restricted cash		4
Trade accounts receivable, net of credit expected loss		1,194
Lease right-of-use assets		177
Property and equipment, net		99
Intangible assets, net		743
Other assets and prepaid expenses		66
Total assets acquired	$	2,605
Accounts payable and accrued expenses		1,721
Short-term debt		1,250
Lease liabilities		178
Contingent liabilities		19
Taxes payable		684
Deferred tax liabilities		253
Other liabilities		479
Total liabilities assumed	$	4,584
Total net liabilities assumed	$	1,979
Goodwill	$	5,611

We report the results of operations of the acquired business within our two reportable segments. Transaction related expenses during the year ended December 31, 2020 associated with the completion of the acquisition totaled $279 and were charged to “General and administrative” expenses in our consolidated statements of income.

The accompanying notes are an integral part of these consolidated financial statements.

F-34

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

The pro forma effects of this acquisition would not materially impact our reported results for any period presented, and as a result no pro forma financial information is presented. During the period from acquisition through December 31, 2020, the business contributed revenue of $138 and a net loss of $1,786.

2019 Acquisition Activity

During the year ended December 31, 2019, we completed one business combination, as follows:

Acquisition of Viajes Falabella

On June 7, 2019, we obtained the regulatory approvals and obtained control of the outstanding capital stock of Viajes Falabella Argentina, Viajes Falabella Chile and Viajes Falabella Peru. The acquisition of Viajes Falabella Colombia was completed on July 31, 2019, after the regulatory approvals were obtained. We refer to the acquired entities collectively as “Viajes Falabella”. We acquired the Viajes Falabella entities from Grupo Falabella. The Viajes Falabella entities are engaged in the travel agency business through their online and offline presence. The acquisition purchase price totaled $23,000, of which we paid $11,500 in cash at the acquisition date, $5,750 in June 2020 and $5,750 will be paid in June 2021.

Concurrent with the acquisition, we entered into a 10-year commercial agreement with Grupo Falabella which provides for several marketing and promotional activities and other activities to promote future business. The agreement also provides for the use of the Viajes Falabella brand in Argentina, Chile, Peru and Colombia for an initial period of 4 years, renewable for one-year periods at our option. We account for the use of the brand as a prepaid asset and amortizes it under the straight-line basis over the term of the contract.

We acquired Viajes Falabella and entered into the commercial agreement to enhance our position as a leading travel agency providing customers with an enhanced travel and tourism product and service offerings through online, call center and physical stores.

We allocated the purchase price to identifiable tangible and intangible assets acquired and liabilities assumed based on their fair values. Goodwill was recognized as the excess of the aggregate of the fair values of consideration transferred over the fair value of assets acquired and liabilities assumed. In determining the fair value of assets acquired and liabilities assumed, we primarily used discounted cash flow analyses. Inputs to the discounted cash flow analyses and other aspects of the allocation of purchase price required judgment. The more significant inputs used in the discounted cash flow analyses and other areas of judgment include (i) future revenue growth or attrition rates (ii) projected margins (iii) discount rates used to present value future cash flows (iv) the amount of synergies expected from the acquisition and (v) the economic useful life of assets, among others.

The accompanying notes are an integral part of these consolidated financial statements.

F-35

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

The following table presents the final purchase price allocation as of December 31, 2019 and the reconciliation with “Payments for acquired business, net of cash acquired” line item in our consolidated statements of cash flows for the year ended December 31, 2019:

Consideration:
Fair value of purchase price	$	22,196
Recognized amounts of assets acquired and liabilities assumed:
Cash and cash equivalents		11,272
Trade accounts receivable, net of credit expected loss		11,828
Other assets and prepaid expenses		34,611
Property and equipment, net		2,420
Intangible assets, net		3,663
Total assets acquired	$	63,794
Travel accounts payable		36,656
Other liabilities		15,807
Total liabilities assumed	$	52,463
Total net assets acquired	$	11,331
Goodwill	$	10,865

Intangible assets primarily consisted of customer relationships, with a weighted average useful life of 3.7 years.

Goodwill was primarily attributable to the synergistic value created from the opportunity for additional expansion in the off-line channel and is not deductible for tax purposes.

We incurred $464 of acquisition-related expenses which were included in “General and administrative” expenses in our consolidated statements of income for the year ended December 31, 2019. We report the results of operations of the acquired business within our two reportable segments.

The following table summarizes the revenues and net loss (including purchase accounting amortization and the impact of intercompany eliminations) of Viajes Falabella included in our consolidated statements of income for the year ended December 31, 2019 since the date of acquisition:

	Period from the date of acquisition to December 31, 2019
Net revenue	$	20,710
Net loss	$	(3,060	)

The following pro forma summary presents certain consolidated information as if the acquisition of Viajes Falabella had occurred on January 1, 2018:

	For the years ended December 31,
	2019			2018
Net revenue	$	532,710		$	584,986
Net (loss) / income	$	(20,872	)	$	19,770

The accompanying notes are an integral part of these consolidated financial statements.

F-36

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

These pro forma results include adjustments for purposes of consolidating the historical financial results of Viajes Falabella for the periods indicated. These pro forma results also include $757 and $757 for the years ended December 31, 2019 and 2018, respectively, to reflect the incremental depreciation and amortization as a result of recording property and equipment and intangible assets at fair value. These pro forma results do not represent financial results that would have been realized had the acquisition actually occurred on January 1, 2018, nor are they intended to be a projection of future results.

2018 Acquisition Activity

We have not completed any business combinations during the year ended December 31, 2018.

5. Redeemable non-controlling interest

In connection with the acquisition of the 84% controlling interest in Koin on August 20, 2020 (see Note 4 for details), we recognized $2,655 for the 16% redeemable non-controlling interest held by the former owners. The terms of the agreement provide us with the right to call the former owners’ non-controlling interest in Koin, and the former owners the right to put their non-controlling interests in Koin back to us, assuming we do not exercise our call right, at dates and prices defined in the agreement. The put price is fixed at $2,880.

The non-controlling interest is not currently redeemable, but it is probable of becoming redeemable (the redemption depends solely on the passage of time). Accordingly, we record the non-controlling interest at the greater of (i) its acquisition date fair value as adjusted for its share (if any) of earnings, losses, or dividends or (ii) an accreted value from the date of the acquisition to the earliest redemption date, February 20, 2022. The accretion of the non-controlling interest to the earliest redemption value is recorded using an interest method. We adopted a policy to charge the carrying value adjustment to retained earnings or, absent retained earnings, additional paid-in capital and will reduce net income available to our common shareholders in the calculation of earnings per share in accordance with the two-class method. We record the non-controlling interest amount in the “mezzanine” section of our consolidated balance sheet as of December 31, 2020, outside of shareholders’ equity.

During the period from acquisition through December 31, 2020 there was a $78 adjustment to reflect a redemption value in excess of carrying value. See Note 24.

Reconciliation of changes in redeemable non-controlling interests

Beginning balance as of January 1, 2020	$	—
Initial fair value of redeemable non-controlling interest of acquired businesses		2,655
Comprehensive loss adjustments:
Net loss attributable to redeemable non-controlling interest		(282	)
Other comprehensive loss attributable to redeemable non-controlling interest		170
Additional paid-in-capital adjustments:
Adjustment to redemption value		78
Ending balance as of December 31, 2020	$	2,621

The accompanying notes are an integral part of these consolidated financial statements.

F-37

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

6. Preferred Stock and Warrants

Non-Convertible Redeemable Series A Preferred Shares and Warrants

On September 18, 2020 (the “Catterton Closing Date”), we completed the issuance and sale of our Series A Preferred Shares (as defined below) and warrants (the “Warrants”) to purchase our common stock (“Common Stock”) to LCLA Daylight LP, an affiliate of L Catterton Latin America III, L.P. (the “L Catterton Purchaser”) pursuant to our previously announced Investment Agreement, dated as of August 20, 2020, with the L Catterton Purchaser (the “L Catterton Investment Agreement”).

We issued and sold to the L Catterton Purchaser, pursuant to the L Catterton Investment Agreement, 150,000 shares of our newly created Series A Preferred Shares, no par value per share (the “Series A Preferred Shares”) and Warrants to purchase 11,000,000 shares of our Common Stock, no par value, for an aggregate purchase price of $150,000.

At closing, we paid certain fees in an aggregate amount of $2,250 to the L Catterton Purchaser.

On the terms and subject to the conditions set forth in the L Catterton Investment Agreement, from and after September 18, 2020, LCLA Daylight LP is entitled to appoint one director to our Board of Directors (the “Board”) and one non-voting observer to the Board, in each case until such time as LCLA Daylight LP and its permitted transferees no longer hold (a) (i) at least 50% of the Series A Preferred Shares purchased by LCLA Daylight LP under the L Catterton Investment Agreement and (ii) Warrants and/or Common Stock for which the Warrants were exercised that represent, in the aggregate and on an as-exercised basis, at least 50% of the shares underlying the Warrants purchased by LCLA Daylight LP under the L Catterton Investment Agreement or (b) if the Company has redeemed the Series A Preferred Shares in full (pursuant to the Company’s redemption right with respect thereto), Warrants and/or Common Stock for which the Warrants were exercised that represent, in the aggregate and on an as-exercised basis, at least 50% of the shares underlying the Warrants purchased by LCLA Daylight LP under the L Catterton Investment Agreement.

The L Catterton Investment Agreement (including the forms of our amended Memorandum of Association and Articles of Association, the terms of the Series A Preferred Shares, Warrants and Registration Rights Agreement) contains other customary covenants and agreements, including certain transfer restrictions, standstill and voting provisions and preemptive rights.

In connection with and concurrently with the closing of the transactions contemplated by the L Catterton Investment Agreement, we issued to LCLA Daylight LP Warrants to purchase 11,000,000 shares of our Common Stock at an exercise price of $0.01 per share, subject to certain customary anti-dilution adjustments provided under the Warrants, including for stock splits, reclassifications, combinations and dividends or distributions made by us on the Common Stock. The Warrants expire on September 18, 2030.

In connection with and concurrently with the closing of the transactions contemplated by the L Catterton Investment Agreement, we and LCLA Daylight LP entered into a Registration Rights Agreement (the “Registration Rights Agreement”), pursuant to which LCLA Daylight LP is entitled to customary registration rights with respect to the Common Stock for which the Warrants may be exercised.

The accompanying notes are an integral part of these consolidated financial statements.

F-38

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

Principal Terms of the Series A Preferred Shares

Dividends:

Dividends on each Series A Preferred Share accrue daily at a rate of 10.0% per annum and are payable semi-annually in arrears on September 30 and March 31, beginning on March 31, 2021. Dividends are payable, either in cash or through an accrual of unpaid dividends (“Dividend Accrual”), at the Company’s option. Dividends on each Series A Preferred Share accrue whether or not declared and whether or not we have assets legally available to make payment thereof. To the extent that any dividends are declared but unpaid, or any dividends are not declared in any given year, (i) such accrued and unpaid dividends and/or (ii) an amount equal to the dividend entitlement, shall compound semi-annually at the rate of 10.0% per annum (“Accumulating Dividends”). All Accumulating Dividends shall be paid in full prior to any distribution, dividend or other payment in respect of any equity securities junior to the Series A Preferred Shares.

Ranking:

The Series A Preferred Shares rank senior to the Common Stock with respect to dividend rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company.

Company’s Redemption Rights:

At any time on or after the third anniversary of the Catterton Closing Date but prior to the fourth anniversary of the Catterton Closing Date, we may redeem all or any portion of the Series A Preferred Shares in cash at a price equal to 105.0% of the sum of the liquidation preference of $1,000 per Series A Preferred Share plus any Dividend Accruals per Series A Preferred Share (the “Liquidation Preference”), plus, without duplication, accrued and unpaid distributions to, but excluding, the redemption date. At any time on or after the fourth anniversary of the Catterton Closing Date but prior to the fifth anniversary of the Catterton Closing Date, we may redeem all or any portion of the Series A Preferred Shares in cash at a price equal to 102.5% of the Liquidation Preference, plus, without duplication, accrued and unpaid distributions to, but excluding, the redemption date. At any time after the fifth anniversary of the Catterton Closing Date, we may redeem all or any portion of the Series A Preferred Shares in cash at a price equal to the Liquidation Preference plus, without duplication, accrued and unpaid distributions to, but excluding, the redemption date.

Holders’ Redemption Rights:

At any time on or after the fifth anniversary of the Catterton Closing Date, each holder of Series A Preferred Shares may, at its election, cause the Company to redeem all or part of such holder’s then outstanding Series A Preferred Shares in cash at a price equal to the Liquidation Preference, plus, without duplication, accrued and unpaid distributions to, but excluding, the redemption date. In addition, if the Company undergoes a qualifying change of control, each holder of Series A Preferred Shares may, at its election, cause the Company to redeem all of such holder’s then outstanding Series A Preferred Shares in cash at a price equal to 110.0% of the Liquidation Preference, plus, without duplication, accrued and unpaid distributions to, but excluding, the redemption date.

The accompanying notes are an integral part of these consolidated financial statements.

F-39

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

Conversion Rights:

The Series A Preferred Shares are not convertible into Common Stock.

Voting Rights:

Each holder of Series A Preferred Shares will have one vote per share on any matter on which holders of Series A Preferred Shares are entitled to vote separately as a class, whether at a meeting or by written consent. The holders of Series A Preferred Shares do not otherwise have any voting rights at any meetings of the Company’s shareholders or on any resolution of the Company’s shareholders.

The prior written approval of the holders of a majority of the Series A Preferred Shares outstanding at such time, acting together as a separate class, is required in order for the Company to (i) amend the Memorandum and Articles of Association in a manner that adversely affects the holders of Series A Preferred Shares, (ii) create or issue any shares, or any securities convertible or exchangeable into, or exercisable for shares, ranking senior or pari passu to the Series A Preferred Shares or issue any additional Series A Preferred Shares or increase the authorized number of Series A Preferred Shares, other than an additional financing meeting certain requirements, (iii) declare or pay any dividend or distribution, or repurchase or redeem any shares, subject to certain exceptions, including with respect to the Series A Preferred Shares, (iv) make any fundamental change in the nature of the business in which the Company is primarily engaged, (v) initiate, engage in or permit to occur (to the extent within our control), any liquidation, dissolution or winding up of the Company, (vi) continue or re-domicile the Company in any jurisdiction other than the British Virgin Islands, or (vii) take or permit certain of the foregoing with respect to our significant subsidiaries.

So long as the Catterton Purchaser holds any Series A Preferred Shares, the prior written consent of the Catterton Purchaser is required in order for us to (i) incur any indebtedness for borrowed money in excess of the greater of $60,000, and an amount equal to 1.0x the Company’s consolidated Adjusted EBITDA for the twelve month period ending at the end of the last quarter for which we have publicly reported financial results, (ii) sell, dispose of or enter into any exclusive license for any material asset (or group of related assets) of the Company or with a fair market value equal or greater to 10% of our consolidated total assets and (iii) enter into certain affiliate transactions, in each case subject to certain exceptions.

Pursuant to the L Catterton Investment Agreement, on September 18, 2020, Mr. Dirk Donath was appointed as a member of the Board and Mr. Ramiro Lauzan was appointed as a non-voting observer. Mr. Donath has also been appointed to serve on the Strategy Committee and Nomination and Compensation Committee of the Board.

Principal Terms of the Warrants to Purchase Common Stock

Pursuant to the L Catterton Investment Agreement, we issued to the Catterton Purchaser Warrants to purchase 11,000,000 Common Shares at an exercise price of $0.01 per share (“Penny Warrants”), subject to certain customary anti-dilution adjustments provided under the Warrants, including for stock splits, reclassifications, combinations and dividends or distributions made by the Company on the Common Shares. The Penny Warrants expire ten years after the Catterton Closing Date.

The Penny Warrants vest and are exercisable as of the issuance date.

The accompanying notes are an integral part of these consolidated financial statements.

F-40

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

The Penny Warrants also include customary anti-dilution adjustments.

Initial and Subsequent Accounting:

The Series A Preferred Shares are classified within temporary equity on our consolidated balance sheet as of December 31, 2020 due to the provisions that could cause the equity to be redeemable at the option of the holder and the terms of the Series A Preferred Shares which do not include an unconditional obligation to redeem at a specified or determinable date, or upon an event certain to occur. The Penny Warrants qualify for classification in stockholders’ equity and are included in our consolidated balance sheet as of December 31, 2020 within “Additional paid-in capital”.

As indicated above, if a qualifying change of control occurs, then each holder of Series A Preferred Shares may, at its election, cause the Company to redeem all of such holder’s then outstanding Series A Preferred Shares in cash at a price equal to 110.0% of the Liquidation Preference, plus, without duplication, accrued and unpaid distributions to, but excluding, the redemption date (the “Change of Control Put”). There is a substantial premium as the Company is required to pay 110.0% upon a change of control. The Change of Control Put requires bifurcation. However, it is uncertain whether or when a qualifying change of control would occur that would obligate the Company to pay the substantial premium liquidation preference to holders of the Series A Preferred Shares and at the balance sheet date, these circumstances were not probable. Thus, no value was assigned at inception. A subsequent adjustment to the carrying value of the Series A Preferred Shares may be made only when it becomes probable that such a change of control event will occur.

The gross proceeds received from the issuance of the Series A Preferred Shares were allocated to the Series A Preferred Shares and Warrants on a relative fair value basis.

In determining the fair value of the Series A Preferred Shares, we primarily used discounted cash flow analyses. Inputs to the discounted cash flow analyses and other aspects of the valuation require judgment. The more significant inputs used in the discounted cash flow analyses and other areas of judgment include assumptions on term, cash flows, and market yield.

In determining the fair value of the Warrants, we primarily used the Black Scholes Option Pricing Model (“BSOPM”). Inputs to the BSOPM and other aspects of the valuation require judgment. The more significant inputs used in the BSOPM and other areas of judgment include the starting stock price or value of the underlying assets, the strike price, the time to expiration, and volatility and risk-free rate. In order to consider the two-year transfer restriction of the Warrants, considered to be security specific, we applied a Discount for Lack of Marketability with the Finnerty Method.

Therefore, the Series A Preferred Shares were initially recognized at an allocated amount on a fair value basis of $84,643, net of $5,415 in initial discount and issuance costs. The Penny Warrants were recognized at an allocated amount on a fair value basis of $56,339, net of $3,604 in issuance costs. Penny Warrants were recorded as additional paid-in capital.

The accompanying notes are an integral part of these consolidated financial statements.

F-41

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

The Series A Preferred Shares are not redeemable at December 31, 2020; however, they will become redeemable on September 18, 2025. Since only the passage of time is needed to occur in order for the Series A Preferred Shares to become redeemable, it is considered to be probable that it will be redeemable. As such, we elected to accrete the difference between the initial value of $84,643 and the redemption value of $150,000 over the five-year period from the date of issuance through September 18, 2025 (the date at which the holder has the unconditional right to redeem the shares, deemed to be the earliest likely redemption date) using the effective interest method. The accretion to the carrying value of the redeemable preferred shares is treated as a deemed dividend, recorded as a charge to additional paid-in-capital (since there is a deficit in retained earnings) and deducted in computing earnings per share (analogous to the treatment for stated dividends paid on the redeemable preferred shares). The accumulated accretion as of December 31, 2020 is $2,831 resulting in an adjusted redeemable preferred share balance of $91,686.

The Series A Preferred Shares accumulated $4,212 of total accrued dividends from issuance date through December 31, 2020 recorded as a charge to additional paid-in-capital.

Convertible Redeemable Series B Preferred Shares

On September 21, 2020 (the “Waha Closing Date”), we completed the issuance and sale of our Series B Preferred Shares (as defined below) to Waha LATAM Investments Limited, an affiliate of Waha Capital PJSC (the “Waha Purchaser”) pursuant to our previously announced Investment Agreement, dated as of August 20, 2020, with the Waha Purchaser (the “Waha Investment Agreement”).

We issued and sold to the Waha Purchaser, pursuant to the Waha Investment Agreement, 50,000 shares of our newly created Series B Preferred Shares, no par value per share (the “Series B Preferred Shares”) for an aggregate purchase price of $50,000.

At closing, we paid certain fees in an aggregate amount of $1,000 to affiliates of the Waha Purchaser.

On the terms and subject to the conditions set forth in the Waha Investment Agreement, from and after September 21, 2020, the Waha Purchaser is entitled to appoint one director to our Board and one non-voting observer to the Board, in each case until such time as (i) the Waha Purchaser no longer holds at least 50% of the Series B Preferred Shares purchased by the Waha Purchaser under the Waha Investment Agreement and (ii) in the event that the Waha Purchaser or the Company converts the Series B Preferred Shares to Common Shares in full, the Waha Purchaser will be entitled to appoint one director to the Board and one non-voting observer to the Board, in each case, until such time as the Waha Purchaser no longer holds at least 50% of the issued and outstanding Common Shares issued to the Waha Purchaser at the conversion date. 

The Waha Investment Agreement (including the forms of our amended Memorandum of Association and Articles of Association, the terms of the Series B Preferred Shares and the Waha Shelf Registration Rights Agreement) contains other customary covenants and agreements, including certain transfer restrictions, standstill and voting provisions and preemptive rights.

Pursuant to the Waha Investment Agreement, we and the Waha Purchaser entered into a Shelf Registration Rights Agreement (the “Waha Shelf Registration Rights Agreement”), pursuant to which the Company filed a Registration Statement on Form F-3 covering the resale of the Common Shares for which the Series B Preferred Shares may be converted. The issuance of the Series B Preferred Shares pursuant to the Waha Investment Agreement is intended to be exempt from registration under the Securities Act, by virtue of the exemption provided by Section 4(a)(2) of the Securities Act.

The accompanying notes are an integral part of these consolidated financial statements.

F-42

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

Principal Terms of the Series B Preferred Shares

Dividends:

Dividends on each Series B Preferred Share accrue daily from and including the Waha Closing Date at a rate of 4.0% per annum and are payable quarterly in arrears commencing on December 31, 2020. Dividends on each Series B Preferred Share accrue whether or not declared and whether or not the Company has assets legally available to make payment thereof.

Dividends are payable, at the Company’s option, either (i) in cash or (ii) by increasing the amount of Accrued Dividends in an amount equal to the amount of the dividend to be paid. If the Company does not declare and pay in cash a full dividend on each Series B Preferred Share on any dividend payment date, then the amount of such unpaid dividend shall automatically be added to the amount of accrued dividends on such share on the applicable dividend payment date without any action on the part of the Company.

In addition, the Series B Preferred Shares are entitled to participate in dividends and other distributions declared and made on the Common Stock on an as-converted basis.

Ranking:

The Series B Preferred Shares rank on a parity basis to the Series A Preferred Shares and senior to the Common Stock with respect to dividend rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company.

Liquidation Rights:

In the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company, the holders of the Series B Preferred Shares shall be entitled, out of assets legally available therefor, before any distribution or payment out of the assets of the Company may be made to or set aside for the holders of any Common Shares, and subject to the rights of the holders of any Senior Shares or Parity Shares and the rights of the Company’s existing and future creditors, to receive in full a liquidating distribution in cash and in the amount per Series B Preferred Share equal to the Liquidation Preference with respect to such Series B Preferred Share.

Conversion Rights:

The Series B Preferred Shares are convertible, at the option of the holder, at any time into Common Stock at an initial conversion price of $9.251 (the “Initial Conversion Price) per share and an initial conversion rate of 108.1081 Common Shares per Series B Preferred Share, subject to certain anti-dilution adjustments. As of December 31, 2020, there were no conversions of the Series B Preferred Shares.

Each holder of Series B Preferred Shares has the right, at such holder’s option, to convert all or a part of such holder’s Series B Preferred Shares at any time into (i) the number of Common Shares per Series B Preferred Share equal to the quotient of (A) the sum of the Stated Value plus, without duplication, any accrued and unpaid Dividends with respect to such Series B Preferred Share as of the applicable Conversion Date (to the extent such accrued and unpaid Dividend is not included in the Stated Value already) (such sum, the “Conversion Amount”) divided by (B) the Conversion Price as of the applicable Conversion Date.

The accompanying notes are an integral part of these consolidated financial statements.

F-43

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

At any time from the third to the fifth anniversary of the Waha Closing Date, if the volume weighted average price (“VWAP”) of the Common Shares exceeds $13.88 (150% of the Initial Conversion Price) as may be adjusted pursuant to the Memorandum and Articles of Association, for at least 10 consecutive trading days, the Company may convert all of the Series B Preferred Shares into the number of Common Shares equal to the quotient of (1) 105% of the conversion amount as of the conversion date divided by (2) the conversion price of such share in effect as of the conversion date.

At any time from the fifth to the seventh anniversary of the Waha Closing Date, if the VWAP of the Common Shares exceeds $12.49 (135% of the Initial Conversion Price), as may be adjusted pursuant to the Memorandum and Articles of Association, for at least 10 consecutive trading days, the Company may convert all of the Series B Preferred Shares into the number of Common Shares equal to the quotient of (1) 105% of the conversion amount as of the conversion date divided by (2) the conversion price of such share in effect as of the conversion date.

In addition, at any time from the seventh anniversary of the Waha Closing Date, if the VWAP of the Common Shares exceeds the Initial Conversion Price, as may be adjusted pursuant to the Memorandum and Articles of Association, for at least 10 consecutive trading days, the Company may convert all of the Series B Preferred Shares into the number of Common Shares equal to the conversion amount divided by the lower of (1) the VWAP per Common Share on the 15 trading days immediately preceding the conversion date or (2) the price per Common Share on the trading day immediately preceding the conversion date.

Redemption Rights:

At any time on or after the seventh anniversary of the Waha Closing Date, the Company may redeem all of the Series B Preferred Shares in cash at a price equal to the sum of (i) (x) the initial stated value of $1,000 per Series B Preferred Shares plus (y) any Dividend Accruals (such sum, the “Stated Value”) plus (ii), without duplication, any accrued and unpaid distributions to, but excluding, the redemption date.

Change of Control Redemption:

If the Company undergoes a qualifying change of control prior to the seventh anniversary of the Waha Closing Date, the Company must redeem, subject to the right of each holder to convert its then outstanding Series B Preferred Shares into Common Shares, all of the then outstanding Series B Preferred Shares for a cash price per share equal to the greater of (x) 110.0% of the Stated Value plus, without duplication, any accrued and unpaid distributions to, but excluding, the redemption date, and (y) the amount such holder would have received in respect of the number of Common Shares that would be issuable upon conversion thereof.

If the Company undergoes a qualifying change of control on or following the seventh anniversary of the Waha Closing Date, the Company must redeem, subject to the right of each holder to convert its then outstanding Series B Preferred Shares into Common Shares, all of the then outstanding Series B Preferred Shares for a cash price per share equal to the greater of (x) 100.0% of the Stated Value plus, without duplication, any accrued and unpaid distributions to, but excluding, the redemption date, and (y) the amount such holder would have received in respect of the number of Common Shares that would be issuable upon conversion thereof, subject to certain conditions.

The accompanying notes are an integral part of these consolidated financial statements.

F-44

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

Voting Rights:

The Series B Preferred Shares will vote on all matters together with the Common Shares on an as-converted basis. Until such time as the Waha Purchaser no longer holds at least 50% of the Series B Preferred Shares purchased by the Waha Purchaser under the Waha Investment Agreement, the prior written consent of the Waha Purchaser is required in order for the Company to (i) authorize, create or issue any shares senior to or on parity with the Series B Preferred Shares, excluding an additional financing meeting certain requirements; (ii) amend, modify or repeal any provision of the Memorandum and Articles of Association in a manner adverse to the Series B Preferred Shares; (iii) change the authorized number of directors of the Company; (iv) enter into certain affiliate transactions; (v) declare or pay any dividend or distribution with respect to any shares; (vi) redeem, purchase or otherwise acquire any Common Shares; (vii) liquidate, dissolve or wind up the affairs of the Company or any of its subsidiaries, effect a recapitalization or reorganization, or reincorporate the Company under the laws of a jurisdiction other than the British Virgin Islands; (viii) effect a conversion of the Company into a different legal form; and (ix) enter into any exclusive license for all or substantially all of the Company’s products or technologies to a third party, in each case subject to certain exceptions.

Pursuant to the Waha Investment Agreement, on September 21, 2020, Mr. Aseem Gupta was appointed as a member of the Board.

Initial and Subsequent Accounting:

The Series B Preferred Shares are classified within temporary equity on our consolidated balance sheet as of December 31, 2020 due to the provisions that cause the equity to be redeemable upon the occurrence of a change of control. The terms of the Series B Preferred Shares do not include an unconditional obligation to redeem at a specified or determinable date, or upon an event certain to occur.

The Series B Preferred Shares were determined to have characteristics more akin to equity than debt. As a result, the conversion at holder’s option or at the Company’s option prior to the seventh anniversary of the Waha Closing Date were determined to be clearly and closely related to the Series B Preferred Shares and therefore do not need to be bifurcated and classified as a derivative liability.

The Company’s conversion option after the seventh anniversary of the Waha Closing Date was not determined to be clearly and closely related to the Series B Preferred Shares as the feature is in-substance a put option as it is designed to provide the investor with a fixed monetary amount, settleable in shares. Put (call) options embedded in equity hosts are not considered clearly and closely related. However, the embedded feature does not meet the definition of a derivative. It has an underlying, a notional amount and a settlement provision, little to no initial net investment but it is not net settled. Therefore, the feature does not need to be bifurcated and classified as a derivative liability.

We also evaluated whether a beneficial conversion feature (“BCF”) should be bifurcated and separately recognized. A convertible instrument contains a BCF when the conversion price is less than the fair value of the shares into which the instrument is convertible at the commitment date. As the conversion price is above the share price and the conversion option is not priced “in-the-money”, we concluded that the Series B Preferred Shares did not contain a BCF and no accounting entry was required.

The accompanying notes are an integral part of these consolidated financial statements.

F-45

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

All of the other embedded features in the Series B Preferred Shares do not need to be bifurcated.

Accordingly, the Series B Preferred Shares were recognized at fair value of $50,000 (the proceeds on the date of issuance) less issuance costs of $3,300 resulting in an initial value of $46,700.

The Series B Preferred Shares were not currently redeemable at December 31, 2020. Also, the events that could cause the Series B Preferred Shares to become redeemable are not considered probable of occurring as of December 31, 2020. Accordingly, accretion from the initial carrying amount to the redemption amount was not required. Dividends were accrued, approved and paid in cash for $553 and as of December 31, 2020 there were no undeclared dividends.

7. Debt

The following table sets forth our outstanding short-term and long-term debt:

	Book Value December 31,				Fair Value December 31,
	2020		2019		2020		2019
Loan with HSBC Mexico, S.A. principal amount 100,000,000 Mexican Pesos		5,026		—		5,026		—
Loan with Bank Sabadell Mexico S.A. principal amount 83,831,941 Mexican Pesos		3,833		—		3,833		—
Loan with Bank Sabadell Mexico S.A. principal amount 20,000,000 Mexican Pesos		1,005		—		1,005		—
Loan with Banco de Crédito e Inversiones principal amount 500,000,000 Chilean Pesos		699		—		694		—
Long-term debt, including current maturities	$	10,563		—	$	10,558		—
Less current maturities of long-term debt		196		—		196		—
Long-term debt, excluding current maturities	$	10,367		—	$	10,362		—
Short-term debt, including current maturities of long-term debt		8,949		19,209		8,949		19,209
Total short-term and long-term debt	$	19,316		19,209	$	19,311		19,209

The accompanying notes are an integral part of these consolidated financial statements.

F-46

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

The changes in the balance of the total debt as of December 31, 2020 and December 31, 2019 consist of the following:

	As of December 31, 2020			As of December 31, 2019
Balance, beginning of year	$	19,209		$	31,162
Acquisitions		9,335			—
Borrowings obtained		640			—
Payment of borrowings		(375	)		—
Accrued interest		196			—
Interest paid		(195	)		—
Foreign currency translation adjustment		962			—
Short-term loans, net		(10,456	)		(11,953	)
Balance, end of year	$	19,316		$	19,209

The following table shows the details of the long-term debt outstanding as of December 31, 2020:

Loan	Issuance date	Maturity date	Currency	Principal amount in original currency		Principal amount in U.S. dollars		Interest rate	Interest payment
HSBC Mexico, S.A.	February 2020	March 2023	Mexican Pesos		100,000,000		5,100	TIIE(1)+3.25%		Monthly
Bank Sabadell Mexico S.A.	January 2020	March 2023	Mexican Pesos		83,831,941		4,433	TIIE(1)+2.5%		Monthly
Bank Sabadell Mexico S.A.	January 2020	January 2022	Mexican Pesos		20,000,000		1,058	TIIE(1)+3.2%		Monthly
Banco de Crédito e Inversiones	June 2020	May 2024	Chilean Pesos		500,000,000		640	3.50		Monthly

(1) TIIE represents an interbank interest rate in Mexico. As of December 31, 2020, interest rates for HSBC Mexico, S.A. loan, Bank Sabadell I loan and Bank Sabadell II loan were 7.5%, 6.75% and 7.45%, respectively.

The weighted average interest rate on short-term borrowings outstanding as of December 31, 2020 and 2019 was 3.4% and 4.3%, respectively.

The accompanying notes are an integral part of these consolidated financial statements.

F-47

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

8. Cash and cash equivalents and restricted cash

Cash and cash equivalents

Cash and cash equivalents consist of the following:

	As of December 31, 2020		As of December 31, 2019
Cash on hand		121		42
Bank deposits		201,217		118,933
Time deposits		45,031		153,838
Money market funds		88,061		36,374
	$334,430		$309,187

Restricted cash

We place collateralized amounts related to operations with our travel suppliers and service providers and the International Air Transport Association (“IATA”). We are required to be accredited by IATA to sell international airlines tickets of IATA-affiliated airlines. We, therefore, as part of our operations, maintain restricted cash in the form of time deposits or bank or insurance guarantees aggregating $16,055 and $4,457 as of December 31, 2020 and 2019.

The following table reconciles our cash and cash equivalents and restricted cash as reported in our consolidated balance sheets to the total amount shown in our consolidated statements of cash flows:

	As of December 31, 2020		As of December 31, 2019		As of December 31, 2018
As included in our consolidated balance sheets:
Cash and cash equivalents		334,430		309,187		346,480
Restricted cash		16,055		4,457		5,709
Total cash and cash equivalents and restricted cash as shown in our consolidated statements of cash flows:	$	350,485	$	313,644	$	352,189

9. Measurement of credit losses on financial instruments

On January 1, 2020, we adopted ASU 2016-13 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASC 326”) which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost.

As of the date of adoption, January 1, 2020 and as of December 31, 2020, substantially all our financial assets under the scope of the standard corresponded to trade accounts receivable as a result of revenue transactions recognized in accordance with ASC 606.

We adopted ASC 326 using the modified retrospective method for all financial assets measured at amortized cost. Results for reporting periods beginning after January 1, 2020 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP. We recorded a net increase to accumulated losses of $1,076 as of January 1, 2020 for the cumulative effect of adopting ASC 326.

The accompanying notes are an integral part of these consolidated financial statements.

F-48

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

The following table illustrates the impact of adopting ASC 326 as of January 1, 2020:

	As of January 1, 2020
	As reported under previous GAAP		Impact of ASC 326 adoption		As reported under ASC 326
Allowance for credit expected losses:		3,205		1,076		4,281

Trade receivables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method, less an allowance for expected credit losses.

Upon adoption of ASC 326, we grouped our trade receivables by country of origin and type (i.e. facilitation services, incentives, advertising, transportation and tour services and others) based on similar risk characteristics.

Payment terms for receivables vary depending on type and jurisdiction, generally less than one year.

As it relates to trade receivables with credit card processors which represent the majority of our trade receivables as of any given date, payment terms vary but typically are received within 30 days after booking except in those cases where transactions are effected through financing installment plans offered by banks. When travelers pay in installments, we receive payment from credit card processors at the time each installment is due generally within 12 months after booking depending on installment plan selected. However, we typically enter into factoring arrangements to cash these receivables thereby reducing days outstanding exposures. Receivables from back-end incentives and advertising transactions typically do not have stated payment terms, although we generally receive payment within 12 months.

Generally, we utilized a loss rate method to calculate the allowance for expected credit losses. We compiled information for a period of time before adoption and tracked historical loss information for our trade receivables by type and geography using their contractual lives. We believe that use of a period of 12 months or more prior to adoption was reasonable based on the nature and term of our receivables. We applied the historical credit loss percentages to our outstanding balances as of adoption and as of December 31, 2020. We determined that historical loss information is a reasonable basis on which to determine expected credit losses for trade receivables held at the reporting date because their composition at the reporting date is consistent with that used in developing the historical credit-loss percentages.

Historically the default or delinquency rates of our trade receivables have been low even during recessions or distressed economic periods. Recessions or other poor economic conditions had historically affected the amount of bookings by travelers and therefore generation of revenue and corresponding receivables, but they generally did not affect the collection behavior of receivables from confirmed bookings. A booking is not confirmed if credit card information is not validated by the credit card processors’ systems. Therefore, due to the nature of our receivables and counterparties, losses have been historically limited to very specific events at the counterparty level such as bankruptcy or financial difficulties.

The accompanying notes are an integral part of these consolidated financial statements.

F-49

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

During the year ended December 31, 2020, we recorded $7,199 of incremental allowance for expected uncollectible amounts, including estimated future losses in consideration of the impact of COVID-19 pandemic on our operations and the economy. Actual future bad debt could differ materially from this estimate resulting from changes in our assumptions of the duration and severity of the impact of the COVID-19 pandemic.

Our exposure to credit risk takes the form of a loss that would be recognized if counterparties failed to, or were unable to, meet their payment obligations. We are also exposed to political and economic risk events, which may cause non-payment of foreign currency obligations to us.

Generally, the counterparties to our trade receivables are major well-recognized and externally-credit rated credit card companies, such as MasterCard, Visa, Diners and other local or regional credit card processors; major GDS providers, such as Travelport, Amadeus and Sabre, individual major airlines; and to a lesser extent hotel chains and operators. We may seek cash collateral, letter of credit or parent company guarantees, as considered appropriate. We have not experienced significant credit problems with these customers to date. Most of these entities or their parent companies are externally credit-rated. We review these external ratings from credit agencies. Certain airlines have been severely affected by the COVID-19 pandemic and entered into Chapter 11 protection in the United States. We have recognized incremental allowances for expected uncollectible amounts. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in our consolidated balance sheet after deducting the expected credit loss allowance.

The following table shows the activity on the expected credit loss allowance for trade receivables during the years ended December 31, 2020 and 2019:

	As of December 31, 2020			As of December 31, 2019
Balance, beginning of year	$	3,205		$	2,065
Impact of adoption of ASC 326		1,076			—
Provisions		12,270			4,294
Recoveries and write-off		(7,369	)		(3,050	)
Foreign currency translation adjustment		1,613			(104	)
Balance, end of year	$	10,795		$	3,205

10. Other assets and prepaid expenses

Other current assets and prepaid expenses consist of the following:

	As of December 31, 2020		As of December 31, 2019
Tax credits		34,465		37,067
Prepaid expenses and advance to suppliers		15,664		29,083
Prepaid advertising		175		1,483
Others		1,991		2,061
	$	52,295	$	69,694

The accompanying notes are an integral part of these consolidated financial statements.

F-50

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

Other non-current assets consist of the following:

	As of December 31, 2020		As of December 31, 2019
Deferred tax assets		57,742		25,351
Seller indemnification		14,053		—
	$	71,795	$	25,351

11. Property and equipment, net

Property and equipment, net consists of the following:

	As of December 31, 2020			As of December 31, 2019
Computer hardware and software		48,895			31,966
Office furniture and fixtures		17,909			21,882
Buildings		3,128			2,086
Vans		1,571			—
Land		266			41
Total property and equipment	$	71,769		$	55,975
Accumulated depreciation (1)		(49,036	)		(34,770	)
Impairment charge		(271	)		—
Total property and equipment, net	$	22,462		$	21,205

(1)  Accumulated depreciation as of December 31, 2020 comprised of $37,171, $10,169, $852 and $844 for computer hardware and software, office furniture and fixtures, buildings and vans, respectively. Accumulated depreciation as of December 31, 2019 comprised of $23,955, $10,345 and $470 for computer hardware and software, office furniture and fixtures and buildings, respectively.

The changes in the balance of property and equipment for the years ended December 31, 2020 and 2019 consist of the following:

	As of December 31, 2020			As of December 31, 2019
Balance, beginning of year	$	21,205		$	19,716
Additions		3,458			5,942
Disposals		—			(597	)
Write-off of leasehold improvements		(3,661	)		—
Acquisitions (1)		8,935			2,420
Depreciation		(7,981	)		(6,659	)
Impairment charge		(271	)		—
Foreign currency translation adjustment		777			383
Balance, end of year	$	22,462		$	21,205

(1)  Acquired property and equipment was comprised mainly of computer hardware and software, office furniture and fixtures and a fleet of dedicated vans.

The accompanying notes are an integral part of these consolidated financial statements.

F-51

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

Depreciation expense for the years ended December 31, 2020, 2019 and 2018 was classified as follows:

	For the year ended December 31, 2020		For the year ended December 31, 2019		For the year ended December 31, 2018
Technology and product development		4,351		4,001		1,036
General and administrative		3,377		2,658		3,949
Selling and marketing		253		—		—
Total depreciation expense	$	7,981	$	6,659	$	4,985

Due to the COVID-19 impact on the global travel industry and our business and results of operations, we concluded that sufficient indicators existed to require us to perform interim impairment testing of our property and equipment. During the second quarter of 2020, we recognized impairment charges of $271. The impairment charges were primarily related to office assets.

The full duration and total impact of COVID-19 remains uncertain and it is difficult to predict how the recovery will unfold for global economies, the travel industry or our business. As a result, we may continue to record impairment charges in the future due to the potential long-term economic impact and near-term financial impacts of the COVID-19 pandemic.

12. Intangible assets, net

Indefinite-lived and definite-lived intangible assets, net consists of the following:

	As of December 31, 2020			As of December 31, 2019
Indefinite-lived intangible assets:
Trademarks and domains		13,882			13,882
Definite-lived intangible assets:
Trademarks and domains		14,296			—
Developed technology		91,107			72,532
Licenses		9,823			1,795
Customer relationships		35,706			3,663
Total intangible assets	$	164,814		$	91,872
Accumulated amortization (1)		(67,266	)		(42,253	)
Impairment charge		(1,053	)		—
Total intangible assets, net	$	96,495		$	49,619

(1)  Accumulated amortization as of December 31, 2020 comprised of $56,770, $7,751 and $2,745 for developed technology, licenses and customer relationships, respectively. Accumulated amortization as of December 31, 2019 comprised of $41,605, $154 and $494 for developed technology, licenses and customer relationships, respectively.

The accompanying notes are an integral part of these consolidated financial statements.

F-52

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

The changes in the balance of intangible assets, net as of December 31, 2020 and December 31, 2019 consist of the following:

	As of December 31, 2020			As of December 31, 2019
Balance, beginning of year	$	49,619		$	37,512
Additions		14,028			24,614
Acquisitions (1)		52,501			3,663
Amortization		(21,699	)		(16,137	)
Impairment charge		(1,053	)		—
Foreign currency translation adjustment		3,099			(33	)
Balance, end of year	$	96,495		$	49,619

(1) Acquired intangible assets was comprised mainly of customer relationships, trademarks and developed technology.

Amortization expense for the years ended December 31, 2020, 2019 and 2018 was classified as follows:

	For the year ended December 31, 2020		For the year ended December 31, 2019		For the year ended December 31, 2018
Technology and product development		17,190		14,198		9,495
General and administrative		3,753		1,523		645
Selling and marketing		756		416		—
Total amortization expense	$	21,699	$	16,137	$	10,140

The estimated future amortization expense related to intangible assets with definite lives as of December 31, 2020, assuming no subsequent impairment of the underlying assets, is as follows:

Year	Amount
2021		16,794
2022		16,652
2023		16,641
2024		6,445
2025		6,259
2026 and thereafter		19,822
Total	$	82,613

Impairment Assessments

We perform our annual assessment of possible impairment of indefinite-lived intangible assets as of December 31, 2020, or more frequently if events and circumstances indicate that an impairment may have occurred. As of December 31, 2020, we had no impairments of intangible assets with indefinite-lives. Due to the COVID-19 pandemic and its impact on our business, we conducted interim impairment assessments during the year ended December 31, 2020. We had no impairments of intangible assets with indefinite lives during the interim periods.

The accompanying notes are an integral part of these consolidated financial statements.

F-53

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

In addition, due to the COVID-19 impact, we concluded that sufficient indicators existed to require us to perform interim impairment testing of our definite-lived intangible assets. We conducted interim impairment assessments during the year ended December 31, 2020. We recognized impairment charges of $1,053 related to customer relationship assets during the second quarter ended June 30, 2020. The assets, classified as Level 3 measurements, were written down to $815 based on valuation using the Income Approach, specifically the Multi-Period Excess Earnings Method, which includes unobservable inputs, including projected revenues, costs and expenses, contributory asset charges (i.e. fixed assets, working capital and assembled workforce), and discount rate.

The full duration and total impact of COVID-19 remains uncertain and it is difficult to predict how the recovery will unfold for global economies, the travel industry or our business. As a result, we may continue to record impairment charges in the future due to the potential long-term economic impact and near-term financial impacts of the COVID-19 pandemic.

13. Goodwill

Goodwill consists of the following:

	As of December 31, 2020		As of December 31, 2019
Goodwill	$	123,217	$	46,956

The following table presents the changes in goodwill by reportable segment:

	Air			Packages, Hotels and Other Travel Products			Total
Balance as of January 1, 2019	$	36,207		$	—		$	36,207
Additions		2,772			8,093			10,865
Foreign currency translation adjustment		(96	)		(20	)		(116	)
Balance as of December 31, 2019	$	38,883		$	8,073		$	46,956
Additions		2,328			70,923			73,251
Impairment charge		(593	)		—			(593	)
Foreign currency translation adjustment		(2,677	)		6,280			3,603
Balance as of December 31, 2020	$	37,941		$	85,276		$	123,217

Impairment Assessments

We perform our annual assessment of possible impairment of goodwill as of December 31, 2020, or more frequently if events and circumstances indicate that an impairment may have occurred. As of December 31, 2020, we recognized impairments charges of $593 related to the goodwill of Viajes Falabella attributable to the air segment. Due to the COVID-19 pandemic and its impact on our business, we conducted interim impairment assessments of goodwill during the year ended December 31, 2020. We had no impairments of goodwill during the interim periods.

The accompanying notes are an integral part of these consolidated financial statements.

F-54

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

We compared the fair value of the reporting units to their carrying values. The fair value estimates for all reporting units were based on a weighted-probability analysis of the present value of future discounted cash flows, Level 3 inputs. The significant estimates used in the discounted cash flows model included our weighted average cost of capital, projected cash flows and the long-term rate of growth. Our assumptions were based on the actual historical performance of the reporting unit and took into account the recent severe and continued weakening of operating results as well as the anticipated rate of recovery, and implied risk premiums based on market prices of our equity and debt as of the assessment dates.

The full duration and total impact of COVID-19 remains uncertain and it is difficult to predict how the recovery will unfold for global economies, the travel industry or our business. As a result, we may record impairment charges in the future due to the potential long-term economic impact and near-term financial impacts of the COVID-19 pandemic.

14. Accounts payable and accrued expenses

Accounts payable and accrued expenses consist of the following:

	As of December 31, 2020		As of December 31, 2019
Marketing suppliers		7,706		29,957
Unbilled suppliers		15,360		10,742
Other suppliers		9,095		18,974
	$	32,161	$	59,673

15. Travel accounts payable

Travel accounts payable consist of the following:

	As of December 31, 2020		As of December 31, 2019
Hotels and other travel service suppliers (1)		131,744		179,397
Cancelled reservations pending payment to travelers		90,764		—
Airlines		6,927		27,557
	$	229,435	$	206,954

(1) Includes $76,603 and $140,987 as of December 31, 2020 and December 31, 2019, respectively, for deferred merchant bookings which will be due after the traveler has checked out.

The accompanying notes are an integral part of these consolidated financial statements.

F-55

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

16. Other liabilities

Other current liabilities consist of the following:

	As of December 31, 2020		As of December 31, 2019
Taxes payable		32,955		10,958
Salaries payable		14,444		25,196
Seller financing Viajes Falabella (1)		5,624		5,477
Other		3,086		5,091
	$	56,109	$	46,722

Other non-current liabilities consist of the following:

	As of December 31, 2020		As of December 31, 2019
Seller financing Viajes Falabella		—		5,219
Taxes payable		598		1,427
Deferred tax liabilities		11,111		—
Purchase price payable for Best Day Group (2)		8,768		—
Accrued earnout liability (3)		3,765		—
Promissory notes issued (4)		14,490		—
Equity method investments		2,059		—
Other		4,122		—
	$	44,913	$	6,646

(1)  As of December 31, 2020, this amount corresponds to the last installment due June 2021.

(2)  We will pay the purchase price on October 1, 2023. See Note 4 for details.

(3)  Under the terms of the acquisition of the Best Day Group, we may be required to pay an earnout amount up to a maximum of $20,000 on October 1, 2024. The amount represents the fair value of the earnout consideration as of December 31, 2020. Changes in the fair value of the earnout consideration are charged to earnings in the period incurred. See Note 21 for details of the earnout consideration.

(4)  Under the terms of the acquisition of the Best Day Group, we legally assumed a debt that Best Day Group had with their prior shareholders. We issued four promissory notes for an aggregate nominal amount of $14,323 which accrue interest at a fixed rate of 5% and are payable on October 1, 2023. The fair value of this debt as of December 31, 2020 was $14,341.

17. Derivative financial instruments

As of December 31, 2020, and 2019, derivative financial instruments consist of foreign currency forward contracts of a short-term nature. The following table shows the derivative financial position as of the end of each year:

	Local currency	Notional amount		Type	Maturity	Fair value
2020
	Brazilian reais	$	10,500	Sell	Jan / Feb 21		77
	Mexican pesos	$	15,000	Sell	Jan 21		395
	Mexican pesos	$	10,000	Sell	Jan 21		262
	Mexican pesos	$	5,000	Sell	Jan 21		51
	Mexican pesos	$	10,000	Sell	Feb 21		166
	Mexican pesos	$	10,000	Sell	Feb 21		103
	Mexican pesos	$	10,000	Sell	Feb 21		103

The accompanying notes are an integral part of these consolidated financial statements.

F-56

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

	Local currency		Notional amount	Type	Maturity	Fair value
2019
	Argentinian pesos	$	15,000	Purchase	Jan - 20	(360	)
	Chile pesos	$	24,500	Purchase	Jan / Feb / Mar - 20	(848	)
	Colombian pesos	$	2,000	Purchase	Jan - 20	(63	)
	Argentinian pesos	$	6,000	Sell	Jan - 20	335
	Mexican pesos	$	7,000	Sell	Jan / Feb - 20	119

18. Restructuring and related reorganization charges

Due to the impact of the COVID-19 pandemic on the global travel industry and our business and results of operations, we committed to several actions intended to simplify our business structure and improve operational efficiencies. These actions were aimed at reducing non-critical expenditures and readjusting structural costs to deliver savings and preserve cash, including (i) temporarily reducing salaries of our senior and middle management; (ii) suspending bonuses to all employees; (iii) reducing part of our workforce and implementing a hiring freeze and limiting inflation salary increases; (iv) reducing working hours and implementing unpaid leave in certain locations; (v) accelerating synergies from acquisitions; (vi) renegotiating supplier payment terms and conditions; (vii) reviewing and renegotiating, to the extent possible, all contracts and commitments; (viii) reducing marketing expenses and (ix) deferring non-critical capital expenditures.

As a result, we recognized $12,961 in headcount reduction benefits during the year ended December 31, 2020, which were fully paid as of period end. Based on current plans, we expect total severance benefits in 2021 to decrease. However, we continue to actively evaluate additional cost reduction efforts, and should we make decisions in future periods to take further actions we will incur additional reorganization charges.

We also engaged in certain smaller scale restructure actions during the year ended December 31, 2020 to centralize and migrate certain operational functions and systems, for which we recognized $399 in reorganization charges during the year ended December 31, 2020, which were primarily related to anticipated termination of several office rent contracts.

The following table summarizes the restructuring and related reorganization activity for the year ended December 31, 2020:

	Employee severance and benefits			Other			Total
Accrued liability as of January 1, 2020	$	—		$	—		$	—
Charges		12,961			399			13,360
Payments		(12,961	)		(248	)		(13,209	)
Accrued liability as of December 31, 2020	$	—		$	151		$	151

We allocated the total employee severance and benefit expenses of $12,961 to “Cost of revenue” ($2,662), “Selling and marketing” expenses ($3,851), “General and administrative” expenses ($3,239) and “Technology and product development” expenses ($3,209) in our consolidated statements of income based on the departmental assignment of terminated employees. The remaining total reorganization charges of $399 were allocated to “General and administrative” expenses in our consolidated statements of income based on departmental use of terminated leased asset contract. Restructuring and related reorganization charges are included in the “Unallocated” segment.

The accompanying notes are an integral part of these consolidated financial statements.

F-57

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

19. Income taxes

The Company is organized as a British Virgin Islands corporation. However, under the “anti-inversion” rules of Section 7874 of the U.S. Internal Revenue Code, the Company is treated as a U.S. corporation for U.S. federal tax purposes. Accordingly, the Company is subject to U.S. federal income tax on its worldwide income. On December 22, 2017, the United States enacted the Tax Cuts and Jobs Act (“Tax TCJA Act”) that significantly changed U.S. tax law by, among other things, lowering U.S. corporate income tax rates, implementing a territorial tax system, and imposing a one-time transition tax on deemed repatriated earnings of foreign subsidiaries. The Tax Act reduced the U.S. corporate income tax rate from 35% to 21%, effective January 1, 2018.

The following table summarizes our U.S. and foreign (loss) / income before income taxes for the years ended December 31, 2020, 2019 and 2018:

	Year ended December 31,
	2020			2019			2018
U.S.		(15,510	)		1,942			17,296
Foreign		(148,797	)		(28,077	)		8,927
Total	$	(164,307	)	$	(26,135	)	$	26,223

Provision for Income Taxes

The following table summarizes our provision for income taxes for the years ended December 31, 2020, 2019 and 2018:

	Year ended December 31,
	2020			2019			2018
Current income tax expense:
U.S. Federal		1,424			1,035			(1,608	)
Foreign		(4,440	)		(8,235	)		(14,210	)
Total current income tax expense		(3,016	)		(7,200	)		(15,818	)
Deferred income tax expense:
U.S. Federal		2,653			—			—
Foreign		21,801			12,425			8,749
Total deferred income tax expense		24,454			12,425			8,749
Income tax benefit / (expense)	$	21,438		$	5,225		$	(7,069	)

The accompanying notes are an integral part of these consolidated financial statements.

F-58

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

Deferred Income Taxes

As of December 31, 2020 and 2019, the significant components of our deferred tax assets and deferred tax liabilities were as follows:

	As of December 31, 2020			As of December 31, 2019
Non-current deferred tax assets		66,768			36,700
Total deferred tax assets		66,768			36,700
Less valuation allowance		(9,026	)		(11,349	)
Net deferred tax assets		57,742			25,351
Non-current tax liabilities		(11,111	)		—
Total deferred tax liabilities		(11,111	)		—
Total deferred tax	$	46,631		$	25,351

The following table summarizes the composition of deferred tax assets and deferred tax liabilities as of December 31, 2020 and 2019:

	As of December 31, 2020			As of December 31, 2019
Tax loss carryforwards		33,036			25,717
Allowance for credit expected losses		4,161			462
Royalties		533			69
Provisions and other assets		22,978			11,319
Property and equipment		268			(438	)
Intangible assets		(9,377	)		—
Others		4,058			(429	)
Total deferred tax assets, net before valuation allowance	$	55,657		$	36,700
Less valuation allowance		(9,026	)		(11,349	)
Total deferred tax assets, net after valuation allowance	$	46,631		$	25,351

As of December 31, 2020, we have both foreign and U.S. net operating loss carryforwards (“NOLs”) of $143,823. If not utilized, the NOLs will begin to expire, as follows:

	As of December 31, 2020
Expiration date	U.S.		Foreign
Expires 2021		—		536
Expires 2022		—		977
Expires 2023		—		31,162
Expires 2024 and thereafter		—		58,464
Without expiration dates		1,305		51,379
Total NOLs (1)	$	1,305	$	142,518

(1) A partial valuation allowance is booked as of December 31, 2020 in order to reserve $58,765 of the tax loss carryforwards detailed above.

The accompanying notes are an integral part of these consolidated financial statements.

F-59

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

The following table shows the breakdown of our NOLs by country of origin as of December 31, 2020:

Country	NOL gross amount		Expiration terms
Brazil		48,584	No expiration. Offset limitation to 30% of taxable income
Mexico		47,824	10 years
Argentina		35,408	5 years
Colombia		7,559	12 years
Others		4,448
Total NOLs	$	143,823

In the aggregate, we have foreign and U.S NOLs amounting to $52,684 which may be carried forward indefinitely but subject to certain percentage limitations of taxable income each year.

As of December 31, 2020, we had a valuation allowance of $8,742 related to certain NOL carryforwards for which it is more likely than not the tax benefits will not be realized. The valuation allowance decreased by $2,323 from the amount recorded as of December 31, 2019 primarily due to the reduction of a portion of valuation allowances of the Brazil subsidiary. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period change, or if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence such as our projections for growth.

The following table presents the changes in our valuation allowance for the years ended December 31, 2020, 2019 and 2018:

	Valuation allowance
Balance as of January 1, 2018	$	42,584
Increases		997
Decreases		(25,574	)
Balance as of December 31, 2018	$	18,007
Increases		5,892
Decreases		(12,550	)
Balance as of December 31, 2019	$	11,349
Increases		754
Decreases		(3,077	)
Balance as of December 31, 2020	$	9,026

The accompanying notes are an integral part of these consolidated financial statements.

F-60

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

Deferred tax assets and liabilities are recognized for the future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to reverse. We have foreign subsidiaries with aggregated undistributed earnings of $27,506 as of December 31, 2020. We have not provided deferred income taxes on taxable temporary differences related to investments in certain foreign subsidiaries where the foreign subsidiary has or will invest undistributed earnings indefinitely outside of the United States. In the event we distribute such earnings in the form of dividends or otherwise, we may be subject to income taxes. Further, a sale of these subsidiaries may cause these temporary differences to become taxable. Due to complexities in tax laws, uncertainties related to the timing and source of any potential distribution of such earnings, and other important factors such as the amount of associated foreign tax credits, it is not practicable to estimate the amount of unrecognized deferred taxes on these taxable temporary differences. We consider the earnings of our foreign subsidiaries to be indefinitely reinvested, other than certain earnings the distributions of which do not imply withholdings or state income taxes, and for that reason we have not recorded a deferred tax liability.

Reconciliation of Statutory Income Tax Rate to Effective Income Tax Rate

A reconciliation of the provision for income taxes computed by applying the weighted average income tax rate for the years ended December 31, 2020, 2019 and 2018 to total income tax expense is as follows:

	Year ended December 31,
	2020			2019			2018
Net (loss) / income before income tax	$	(164,307	)	$	(26,135	)	$	26,223
Weighted average income tax rate (3)		27	%		29	%		39	%
Income tax (benefit) / expense at weighted average income tax rate	$	(43,651	)	$	(7,474	)	$	10,273
Permanent differences:
Non-taxable income (1)		7,959			(469	)		(1,448	)
Foreign non-creditable withholding tax (2)		1,471			4,439			4,193
Non-deductible expenses		12,161			1,054			1,346
Currency translation adjustment		1,289			1,891			1,902
Tax credits recovery		12			(157	)		—
Others		20			553			540
Provisions and contingencies		1,747			—			—
True up		849			(2,693	)		1,204
Change in valuation allowance		(3,367	)		(5,010	)		(10,941	)
Change in tax rate		72			2,641			—
Income tax (benefit) / expense	$	(21,438	)	$	(5,225	)	$	7,069

(1) Includes tax (benefits) / losses generated by operations located in the Uruguayan “Free Trade Zone”.

(2)  Includes foreign withholding taxes on royalties and services.

(3) We use a weighted average rate for the income tax reconciliation, since the majority of our operations are outside the U.S. The calculation is performed based on an average between the enacted tax rates of the foreign jurisdictions.

Our effective tax rate for the year ended December 31, 2020 was 13%, lower than the weighted average rate of 27% due primarily to the changes in tax rate related to the Promotional Regime enacted in Argentina, which reduced the income tax rate to 15% as from the following year and the reversal of valuation allowances.

The accompanying notes are an integral part of these consolidated financial statements.

F-61

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

Our effective tax rate for the year ended December 31, 2019 was 20%, lower than the weighted average rate of 29% due to the decrease in non-taxable income and the changes in valuation allowances related to our Brazilian subsidiary.

Uncertain tax positions

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits and interest is as follows:

	Year ended December 31,
	2020		2019		2018
Balance, beginning of year		—		—		—
Increases to tax positions related to current year		—		—		—
Increases to tax positions related to prior years (1)		31,778		—		—
Decreases to tax positions related to prior years		—		—		—
Reductions due to lapsed statute of limitations		—		—		—
Settlements during current year		—		—		—
Interest and penalties		1,128		—		—
Balance, end of year	$	32,906	$	—	$	—

(1) Corresponds to uncertain tax positions recognized as part of the acquisition of the Best Day Group. See Note 4.

As of December 31, 2020, we had $32,906 of gross unrecognized tax benefits, if recognized, would affect the effective tax rate. As of December 31, 2019, and 2018, we did not have gross unrecognized tax benefits that would have affected the effective tax rate.

As of December 31, 2020, total gross interest and penalties accrued was $18,879. During the year ended December 31, 2020 we recognized interest expense of $1,128 in connection with our unrecognized tax benefits.

We evaluate the tax positions and establish liabilities for uncertain tax positions that may be challenged by local authorities and may not be fully sustained, despite our belief that the underlying tax positions are fully supportable. Uncertain tax positions are reviewed on an ongoing basis and are adjusted in light of changing facts and circumstances, including progress of tax audits, developments in case law, and closing of statute of limitations. Such adjustments are reflected in the income tax provision as appropriate.

We are routinely audited by U.S. federal and foreign income tax authorities. At any point in time, we may have tax audits underway at various stages of completion. These audits include questioning the timing and the amount of income and deductions, and the allocation of income and deductions among various tax jurisdictions. The Mexican Tax Authority is currently examining the income tax returns for the 2014, 2015 and 2017 tax years of our subsidiary Viajes Beda. The Mexican Tax Authority has already issued a notice of observations for fiscal year 2014. We are currently preparing the information requested in order to submit a response and reject any adjustment related to the issues raised during the tax audit.

The accompanying notes are an integral part of these consolidated financial statements.

F-62

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

During the third quarter of 2020, the Internal Revenue Service (“IRS”) issued final adjustments related to foreign tax credits allocation criteria taken during our fiscal year 2017. We recognized a tax assessment of $1,649 as income tax provision. Tax liability is expected to be offset with net operating losses and the final payment could be refunded by the IRS.

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act)

On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, a relief package comprising a combination of tax provisions and other stimulus measures. The CARES Act broadly provides entities tax payment relief and significant business incentives and makes certain technical corrections to the Tax Act. The tax relief measures for entities include a five-year net operating loss carry back, increases interest expense deduction limits, acceleration of alternative minimum tax credit refunds, payroll tax relief, and a technical correction to allow accelerated deductions for qualified improvement property. The CARES Act also provides other non-income tax benefits, including federal funding for a range of stabilization measures and emergency funding to assist those impacted by the COVID-19 pandemic.

Under the Tax Act, NOL deductions arising in tax years beginning after December 31, 2017, can offset only up to 80% of future taxable income. The Tax Act also prohibits NOL carrybacks for NOLs arising in tax years ending after December 31, 2017 but allows indefinite carryforwards.

On the contrary, the CARES Act provides that NOLs arising in tax years beginning after December 31, 2017, and ending before January 1, 2021, may be carried back for five years. Generally, any NOL carried back must be carried back to the earliest applicable tax year. Further, the 80% limitation enacted under the Act is temporarily suspended for tax years beginning before 2021 and will be reinstated beginning in 2021. Under these conditions, NOLs arising in 2018, 2019 or 2020 could be carried back to years before 2018, in order to maximize the potential cash refund associated with carryback claims.

We could be allowed to apply for this benefit and the current NOLs could be carried back to compensate potential claims of the IRS. We continue to assess the effect of the CARES Act and ongoing government guidance related to COVID-19 that may be issued.

20. Segment information

We organize our business into two reportable segments: (1) “Air” and (2) “Packages, Hotels and Other Travel Products”.

Our “Air” segment primarily consists of facilitation services for the sale of airline tickets on a stand-alone basis and excludes airline tickets that are packaged with other non-airline flight products.

Our “Packages, Hotels and Other Travel Products” segment primarily consists of facilitation services for the sale of travel packages (which can include airline tickets and hotel rooms), as well as stand-alone sales of hotel rooms (including vacation rentals), car rentals, bus tickets, cruise tickets, travel insurance and destination services.

Both segments also include sale of advertisements and, to a lesser extent, incentives earned from suppliers and interest revenue.

The accompanying notes are an integral part of these consolidated financial statements.

F-63

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

For the year ended December 31, 2020, we have changed our calculation of Adjusted Segment EBITDA reported to the Chief Operating Decision Maker (“CODM”) to exclude restructuring charges and acquisition costs. We have effected this change retroactively to all years presented. However, we did not have restructuring charges in either the years ended December 31, 2019 or 2018. We did not engage in acquisition activity in the year ended December 31, 2018.

We measure our segment’s performance by our Adjusted Segment EBITDA. We use Adjusted Segment EBITDA for purposes of making decisions about allocating resources to our segments and to internally evaluate their financial performance because we believe Adjusted Segment EBITDA reflects current core operating performance of each segment and provides an indicator of each segment’s ability to generate cash.

Adjusted Segment EBITDA is calculated, with respect to each segment, as net loss adjusted for (1) provision for income taxes; (2) total financial results, net; (3) stock-based compensation expense; (4) acquisition transaction costs; (5) depreciation and amortization; (6) impairment charges; and (7) restructuring charges.

Adjusted Segment EBITDA includes allocations of certain expenses based on transaction volumes and other usage metrics. Our allocation methodology is periodically evaluated and may change.

There are no intersegment revenues in any of the periods presented.

As depreciation and amortization are not included in our segment’s performance measure, we do not report assets by segment as it would not be meaningful. Our CODM does not regularly use this information.

The following tables present our segment information for the years ended December 31, 2020, 2019 and 2018:

	Year ended December 31, 2020
	Air			Packages, Hotels and Other travel products			Unallocated			Total Consolidated
Revenue	$	62,713		$	68,621		$	—		$	131,334
Adjusted EBITDA	$	(32,890	)	$	(82,377	)	$	(6,546	)	$	(121,813	)
Depreciation and amortization		(9,784	)		(9,784	)		(10,112	)		(29,680	)
Stock-based compensation expense		—			—			(7,312	)		(7,312	)
Impairment charges		—			—			(1,917	)		(1,917	)
Restructuring charges		—			—			(13,360	)		(13,360	)
Acquisition transaction costs		—			—			(3,135	)		(3,135	)
Operating loss	$	(42,674	)	$	(92,161	)	$	(42,382	)	$	(177,217	)
Financial income, net		—			—			—			12,910
Loss before income tax		—			—			—		$	(164,307	)
Income tax benefit		—			—			—			21,438
Net loss for the year		—			—			—		$	(142,869	)
Net loss attributable to redeemable non-controlling interest		—			—			—			282
Net loss attributable to Despegar.com, Corp.		—			—			—		$	(142,587	)

The accompanying notes are an integral part of these consolidated financial statements.

F-64

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

	Year ended December 31, 2019
	Air			Packages, Hotels and other travel products			Unallocated			Total Consolidated
Revenue	$	201,638		$	323,238		$	—		$	524,876
Adjusted EBITDA	$	3,346		$	36,546		$	(13,249	)	$	26,643
Depreciation and amortization		(7,716	)		(7,716	)		(7,364	)		(22,796	)
Stock-based compensation expense		—			—			(11,686	)		(11,686	)
Impairment charges		—			—			—			—
Restructuring charges		—			—			—			—
Acquisition transaction costs		—			—			(1,081	)		(1,081	)
Operating (loss) / income	$	(4,370	)	$	28,830		$	(33,380	)	$	(8,920	)
Financial expense, net		—			—			—			(17,215	)
Loss before income tax		—			—			—		$	(26,135	)
Income tax benefit		—			—			—			5,225
Net loss for the year		—			—			—		$	(20,910	)

	Year ended December 31, 2018
	Air			Packages, Hotels and other travel products			Unallocated			Total Consolidated
Revenue	$	214,804		$	315,810		$	—		$	530,614
Adjusted EBITDA	$	27,790		$	37,739		$	2,115		$	67,644
Depreciation and amortization		(4,630	)		(4,582	)		(5,913	)		(15,125	)
Stock-based compensation expense		—			—			(6,766	)		(6,766	)
Impairment charges		—			—			(363	)		(363	)
Restructuring charges		—			—			—			—
Acquisition transaction costs		—			—			—			—
Operating income / (loss)	$	23,160		$	33,157		$	(10,927	)	$	45,390
Financial expense, net		—			—			—			(19,167	)
Income before income tax		—			—			—		$	26,223
Income tax expense		—			—			—			(7,069	)
Net income for the year		—			—			—		$	19,154

The accompanying notes are an integral part of these consolidated financial statements.

F-65

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

Revenue by Business Model, Type and Country

The following table presents our revenues by business model, revenue type and country for the years ended December 31, 2020, 2019 and 2018:

	Year ended December 31,
	2020		2019		2018
Business Model:
Prepay/Merchant Model		102,591		407,258		415,812
Pay-at-Destination/Agency Model		1,305		13,130		20,143
Others (1)		27,438		104,488		94,659
Total Revenue	$	131,334	$	524,876	$	530,614
Revenue Type:
Commissions and service fees		100,908		426,082		428,722
Incentive fees		17,040		72,912		80,710
Advertising		5,040		15,063		15,170
Others (2)		8,346		10,819		6,012
Total Revenue	$	131,334	$	524,876	$	530,614
Country:
Argentina		16,112		98,946		122,656
Brazil		45,289		159,676		165,688
Uruguay		9,240		131,160		142,902
Mexico		30,801		39,500		38,243
Other countries (3)		29,892		95,594		61,125
Total Revenue	$	131,334	$	524,876	$	530,614

(1) Others includes incentive fees, advertising, breakage, loyalty and interest revenue.

(2) Others includes breakage, loyalty, destination services and interest revenue.

(3) Other countries include Chile, Peru, Colombia, Ecuador and United States.

Assets by Country​​​​​​​

The following table presents our main assets by country:

	As of December 31, 2020		As of December 31, 2019
Goodwill:
Argentina		2,455		3,048
Brazil		14,132		10,508
Mexico		81,137		7,543
Uruguay		16,839		16,839
Other countries (1)		8,654		9,018
	$	123,217	$	46,956
Intangible assets:
Argentina		28,104		28,487
Uruguay		28,500		14,859
Mexico		36,546		—
Other countries (2)		3,345		6,273
	$	96,495	$	49,619

The accompanying notes are an integral part of these consolidated financial statements.

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Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

	As of December 31, 2020		As of December 31, 2019
Property and equipment:
Argentina		9,661		7,067
Brazil		2,056		3,779
Mexico		3,538		—
Uruguay		499		929
United States		3,304		4,357
Other countries (3)		3,404		5,073
	$	22,462	$	21,205

(1) Other countries include Chile, Peru and Colombia

(2) Other countries include Chile, Peru, Colombia, Brazil and United States.

(3) Other countries include Chile, Peru, Colombia and Ecuador.

21. Commitments and contingencies

Commitments:

Operating leases

Our commitments include operating lease commitments. Generally, our property and equipment, including a fleet of dedicated vans to provide transportation services, office and retail space, and others are supplied through operating leases. The future contractual aggregate minimum lease payments under non-cancellable operating leases and other commitments are disclosed in Note 28.

Employment Agreements

In the ordinary course of business, we entered into employment agreements with certain of our key employees which provide for compensation guidelines. Generally, we pay compensation to our executive officers in the form of (i) cash paid on a monthly basis and (ii) an annual bonus subject to the fulfillment of certain performance targets. We recognize compensation in “Other liabilities” in our consolidated balance sheets and in “General and administrative” expenses in our consolidated statements of income.

As mentioned in Note 18, due to the COVID-19 impact on the global travel industry and our business and results of operations, we temporarily reduced salaries of our senior and middle management and suspended bonuses to all employees.

Best Day Earnout Provision

The Acquisition Agreement provides for an earnout for the benefit of certain sellers ranging from $0 to $20,000 based solely on the performance of our share price during a measurement period of six months (the “earnout measurement period”) prior to the fourth anniversary of the Closing Date. The earnout, if any, will be payable in cash on October 1, 2024.

We will pay no earnout to the sellers if our average share price is below $10 during the earnout measurement period. We will pay $5,000 to the sellers if our average share price is between $10 and $15 during the earnout measurement period. We will pay $10,000 to the sellers if our average share price is between $15 and $20 during the earnout measurement period. We will pay $15,000 to the sellers if our average share price is between $20 and $25 during the earnout measurement period. And we will pay $20,000 to the sellers if our average share price is above $25 during the earnout measurement period.

As of the date of acquisition, we estimated an additional consideration of $1,526 will be paid. We remeasured the contingent consideration as of December 31, 2020 and adjusted it to $3,765. We recognized the change in the fair value of the earnout liability under “General and administrative” expenses in our consolidated statements of income. See Note 4 for additional information on the acquisition.

The accompanying notes are an integral part of these consolidated financial statements.

F-67

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

Services Agreement with Mr. Julián Balbuena Alonso and BD Operadora de Servicios, S.A. de C.V. (“BOS”)

Our subsidiary, Viajes Beda, entered into a services agreement (the “Services Agreement”) with Mr. Julián Balbuena Alonso (“JBA”) and BD Operadora de Servicios, S.A. de C.V. (“BOS”) (collectively herein referred to as the “Service Providers”) pursuant to which the Service Providers provide consulting services to Viajes Beda for a limited period of 120 days commencing on October 1, 2020. Under the terms of the Services Agreement, the Service Providers are encouraged to renegotiate more beneficial terms and conditions with travel suppliers in consideration for a fee ranging from $0 to $5,000.

We accrued $1,819 towards the completion of the services as of December 31, 2020. The amount was recognized in “General and administrative” expenses in our consolidated statements of income for the year ended December 31, 2020.

Contingencies:

Legal Proceedings

We are a party to various lawsuits and claims arising out of the ordinary course of business. We estimate the range of our liability related to pending litigation when we believe the amount or range of loss can be estimated. We record our best estimate of a loss when the loss is considered probable. When a liability is probable and there is a range of estimated loss with no best estimate in the range, we record the minimum estimated liability related to the lawsuits or claims. As additional information becomes available, we assess the potential liability related to our pending litigation and claims and revise our estimates. Due to uncertainties related to the resolution of lawsuits and claims, the ultimate outcome may differ significantly from our estimates. In the opinion of management and based on liability accruals provided, our ultimate exposure with respect to these pending lawsuits and claims is not expected to have a material adverse effect on our consolidated financial position or cash flows, although they could have a material adverse effect on our results of operations for a particular reporting period.

As of December 31, 2020, we have provided an amount of $9,990 to cover for probable losses.

Labor, Social Security and Non-Income Tax Contingencies

We have reserved for certain foreign labor, social security and non-income tax contingencies based on the likelihood of an obligation in accordance with accounting guidance for probable loss contingencies. Loss contingency provisions are recorded for probable losses at management’s best estimate of a loss, or when a best estimate cannot be made, a minimum loss contingency amount is recorded.

As of December 31, 2020, we have provided an amount of $23,357 related to labor, social security and non-income tax contingencies. While we believe that the assumptions and estimates used to determine contingent liabilities are reasonable, the ultimate outcome of these matters cannot presently be determined.

The accompanying notes are an integral part of these consolidated financial statements.

F-68

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

Tax Audits

We are involved in various tax matters, with respect to some of which the outcome is uncertain. We establish reserves to remove some or all of the tax benefit of any of our tax positions at the time we determine that it becomes uncertain based upon one of the following conditions: (1) the tax position is not “more likely than not” to be sustained, (2) the tax position is “more likely than not” to be sustained, but for a lesser amount, or (3) the tax position is “more likely than not” to be sustained, but not in the financial period in which the tax position was originally taken. For purposes of evaluating whether or not a tax position is uncertain, (1) we presume the tax position will be examined by the relevant taxing authority that has full knowledge of all relevant information; (2) the technical merits of a tax position are derived from authorities such as legislation and statutes, legislative intent, regulations, rulings and case law and their applicability to the facts and circumstances of the tax position; and (3) each tax position is evaluated without consideration of the possibility of offset or aggregation with other tax positions taken. A number of years may elapse before a particular uncertain tax position is audited and finally resolved or when a tax assessment is raised. The number of years subject to tax assessments varies depending on the tax jurisdiction. The tax benefit that has been previously reserved because of a failure to meet the “more likely than not” recognition threshold would be recognized in our income tax expense in the first interim period when the uncertainty disappears under any one of the following conditions: (1) the tax position is “more likely than not” to be sustained, (2) the tax position, amount, and/or timing is ultimately settled through negotiation or litigation, or (3) the statute of limitations for the tax position has expired. See Note 19 for details.

22. Related party transactions

Balances and operations with Expedia

Expedia, Inc. (“Expedia”), a subsidiary of Expedia Group, Inc., a Delaware corporation, is a shareholder of record of the Company.

In March 2015, we entered into an outsourcing agreement (the “Expedia Lodging Outsourcing Agreement”) pursuant to which all hotel and other lodging reservations for countries outside of Latin America offered through our platforms were provided by Expedia on an exclusive basis. The Expedia Lodging Outsourcing Agreement was amended in November 2019 (hereinafter referred to as the “Expedia Amended and Restated Lodging Outsourcing Agreement”) to allow us to contract 10% of lodging inventory directly without using Expedia. Under the Expedia Amended and Restated Lodging Outsourcing Agreement, Expedia is also the preferred provider of hotel and other lodging reservations in Latin America. The term of the Expedia Amended and Restated Lodging Outsourcing Agreement renews annually automatically unless terminated in accordance with its terms. We lastly renewed the Expedia Amended and Restated Lodging Outsourcing Agreement in November 2020.

Under the Expedia Amended and Restated Lodging Outsourcing Agreement, we are required to reach certain marketing fee thresholds during specified periods. Failure to reach the minimum marketing fee thresholds may require us to pay a $125,000 termination fee. Expedia may also unilaterally terminate the Expedia Amended and Restated Lodging Outsourcing Agreement in the event of a change of control of the Company. Beginning March 2022, we may unilaterally terminate the Expedia Amended and Restated Lodging Outsourcing Agreement upon payment of a $125,000 termination fee. As noted in more detail below, in connection with the COVID-19 pandemic, Expedia has agreed to waive its termination right relating to minimum marketing fee thresholds for any period through December 31, 2021.

In August 2016, we entered into another outsourcing agreement with Expedia (the “Despegar Outsourcing Agreement”) pursuant to which we are required to make our hotel reservations inventory available to certain affiliates of Expedia. The Despegar Outsourcing Agreement has a three-year term that renews automatically for one-year periods unless either party elects not to renew. We lastly renewed the Despegar Outsourcing Agreement in August 2020 for an additional one-year term.

The accompanying notes are an integral part of these consolidated financial statements.

F-69

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

As a result of the impact of the COVID-19 pandemic on the global travel industry and our business in particular, on August 20, 2020, we entered into an amendment to the Expedia Amended and Restated Lodging Outsourcing Agreement. Expedia agreed to waive its termination rights under the Expedia Amended and Restated Lodging Outsourcing Agreement relating to minimum marketing fee thresholds for any period through December 31, 2021, subject to certain conditions. Additionally, we have entered into a Nominating Agreement with Expedia, pursuant to which Expedia has the right to designate one individual to be a nominee for election to our Board of Directors and we shall cause such Expedia designee to be included in the slate of directors approved and recommended by the Board for election at each meeting of shareholders at which the term of an Expedia designee will expire. According to the Nominating Agreement, Mr Adam Jay was appointed as a member of the Board.

Under the Expedia Amended and Restated Lodging Outsourcing Agreement and the Despegar Outsourcing Agreement, we maintained a net payable position with Expedia of $11,177 and $67,047 recognized under “Related party receivable” and “Related party payable” in our consolidated balance sheet as of December 31, 2020 and 2019, respectively. We generated revenue of $7,066, $38,760 and $43,975 for the years ended December 31, 2020, 2019 and 2018, respectively. Revenue from Expedia represented 5%, 7% and 8% of our total consolidated revenues for the years ended December 31, 2020, 2019 and 2018, respectively.

23. Fair value measurements

Items measured at fair value on a recurring basis

Financial assets and liabilities carried at fair value at December 31, 2020 are classified in the categories described in the table below:

	Level 1		Level 2		Level 3			Total
Assets
Cash equivalents
Money market funds		88,061		—		—			88,061
Time deposits		45,031		—		—			45,031
Derivatives
Foreign currency forwards		—		725		—			725
Total assets at fair value	$	133,092	$	725	$	—		$	133,817
Liabilities
Accrued earnout liability		—		—		(3,765	)		(3,765	)
Total liabilities at fair value	$	—	$	—	$	(3,765	)	$	(3,765	)

The accompanying notes are an integral part of these consolidated financial statements.

F-70

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

Financial assets and liabilities carried at fair value at December 31, 2019 are classified in the categories described in the table below:

	Level 1		Level 2			Level 3		Total
Assets
Cash equivalents
Money market funds		36,374		—			—		36,374
Time deposits		153,838		—			—		153,838
Derivatives
Foreign currency forwards		—		454			—		454
Total assets at fair value	$	190,212	$	454		$	—	$	190,666
Liabilities
Derivatives
Foreign currency forwards		—		(1,271	)		—		(1,271	)
Total liabilities at fair value	$	—	$	(1,271	)	$	—	$	(1,271	)

We value our derivative instruments using pricing models. Pricing models consider the contract terms as well as multiple inputs where applicable, such as interest rate yield curves, option volatility and foreign currency exchange rates. Derivatives are considered “Level 2” fair value measurements. Our derivative instruments are typically short-term in nature.

We measure the fair value of the earnout payment using a series of “digital options”. We believe this methodology can be applied because our earnout payment provides for a fixed payment to the sellers if our stock price exceeds a predetermined strike price during the earnout measurement period. In the application of this methodology, we performed a valuation in a risk neutral framework, using a Black-Scholes-Merton Digital call option formula. The significant inputs used were our share price as of the valuation date, our share price historical volatility, U.S. risk free rate, estimated term and credit-risk adjustment spread.

We classify our cash equivalents and investments within Level 1 as we value our cash equivalents and investments using quoted market prices.

We hold term deposit investments with financial institutions. Term deposits with original maturities of less than three months are classified as cash equivalents and those with remaining maturities of less than one year are classified within short-term investments.

As of December 31, 2020, and 2019, our cash and cash equivalents consisted primarily of term deposits with maturities of three months or less and bank account balances.

Items measured at fair value on a non-recurring basis

Our non-financial assets, such as goodwill, intangible assets and property and equipment, as well as equity method investments, are adjusted to fair value only when an impairment charge is recognized, or the underlying investment is sold. Such fair value measurements are based predominately on Level 3 inputs. During the fourth quarter ended December 31, 2020, we recorded an impairment of $593 to carry goodwill to fair value. During the third quarter ended September 30, 2020, we recorded an impairment of $271 to carry office assets to fair value. During the second quarter ended June 30, 2020, we recorded an impairment of $1,053 to carry customer relationship intangibles to fair value. See Notes 11, 12 and 13 for details.

The accompanying notes are an integral part of these consolidated financial statements.

F-71

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

24. Earnings per share

The following table presents our basic and diluted earnings per share for the years ended December 31, 2020 and 2019:

	Year ended December 31,
	2020			2019
Basic and diluted earnings per share
Net loss for the year		(142,869	)		(20,910	)
Less: Net loss for the year attributable to redeemable non-controlling interest		282			—
Net loss for the year attributable to Despegar.com, Corp.		(142,587	)		(20,910	)
Accretion of redeemable non-controlling interest to redemption value		(78	)		—
Accretion of redeemable Series A preferred stock to redemption value		(2,831	)		—
Accrued dividends of redeemable Series A preferred stock		(4,212	)		—
Dividends of redeemable Series B preferred stock		(553	)		—
Net loss for the year attributable to Despegar.com, Corp. common shareholders		(150,261	)		(20,910	)
Numerator of basic and diluted earnings per share		(150,261	)		(20,910	)
Weighted average common shares outstanding—basic and diluted		73,001			69,465
Denominator of basic and diluted earnings per share		73,001			69,465
Basic and diluted earnings per share		(2.06	)		(0.30	)

For the year ended December 31, 2020, we excluded 1,680 of outstanding stock awards and 5,405 convertible preferred stock from the calculations of diluted earnings per share attributable to common stockholders because their effect would have been antidilutive.

For the year ended December 31, 2019, we excluded 1,150 of outstanding stock awards from the calculations of diluted earnings per share attributable to common stockholders because their effect would have been antidilutive.

Basic and diluted earnings per share is presented using the two-class method required for participating securities. We consider that our Series B preferred stock to be participating securities and, in accordance with the two-class method, earnings allocated to participating securities and the related number of outstanding shares of participating securities are excluded from the computation of basic and diluted net loss per common share. If a dividend is paid on common stock, the holders of Series B preferred stock are entitled to a proportionate share of any such dividend as if they were holders of common stock (on an if-converted basis). As the holders of our Series B preferred stock do not have contractual obligation to share in the losses of the Company, the net loss attributable to common stockholders for each period is not allocated between common stock and participating securities. Accordingly, preferred stock is excluded from the calculation of basic and diluted net loss per share as the effect would have been antidilutive.

The accompanying notes are an integral part of these consolidated financial statements.

F-72

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

25. Shareholders’ equity and mezzanine equity

In connection with our issuances of non-convertible redeemable Series A preferred shares and warrants to L Catterton Latin America III, L.P. and convertible redeemable Series B preferred shares to Waha LATAM Investments Limited, on September 18, 2020, we amended our Memorandum of Association and Articles of Association to establish the terms of the Series A Preferred Shares and Series B Preferred Shares. See Note 6 for a description of the terms of the Series A Preferred Shares and Series B Preferred Shares.

Common Stock

We are authorized to issue an unlimited number of common shares without par value. Common stock is entitled to 1 vote per share. Common stock qualifies for dividends, when and if declared by our Board of Directors.

Preferred Stock

We are authorized to issue 150,000 series A preferred shares without par value (the “Series A Preferred Shares”) and 50,000 series B preferred shares without par value (the “Series B Preferred Shares”). Both Series A Preferred Shares and Series B Preferred Shares are not part of our shareholders’ equity, rather they are classified as mezzanine equity due to their redemption features. See Note 6 for a description of the rights attaching to the Series A Preferred Shares and Series B Preferred Shares.

The Series A Preferred Shares are classified within the mezzanine equity section on our consolidated balance sheet as of December 31, 2020 due to the provisions that could cause the equity to be redeemable at the option of the holder. The Series B Preferred Shares are classified within the mezzanine equity section on our consolidated balance sheet as of December 31, 2020 due to the provisions that cause the equity to be redeemable upon the occurrence of a change of control.

As of December 31, 2020, and 2019, we have no preferred stock outstanding as part of our shareholders’ equity.

Warrants

Pursuant to the L Catterton Investment Agreement, we agreed to issue to the Catterton Purchaser, Warrants to purchase 11,000,000 Common Shares at an exercise price of $0.01 per share (“Penny Warrants”), subject to certain customary anti-dilution adjustments provided under the Warrants, including for stock splits, reclassifications, combinations and dividends or distributions made by the Company on the Common Shares. The Penny Warrants expire ten years after the Catterton Closing Date. The Penny Warrants vest and are exercisable as of the issuance date.

We classified our warrants in our shareholders’ equity and are included in our consolidated balance sheet as of December 31, 2020 within “Additional paid-in capital”.

Treasury Stock

As of both December 31, 2020, and 2019, our treasury stock was comprised of $68,267 and 5,008,307 shares of common stock.

The accompanying notes are an integral part of these consolidated financial statements.

F-73

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

Share Repurchases

During the years ended December 31, 2018 and 2019, our Board of Directors approved share repurchase programs under which we were authorized to repurchase up to $75,000 and $100,000 of common stock, respectively, and were active for a period of one year as from authorization. These share repurchases could be made through a variety of methods, including in the open market, a 10b5-1 program and through privately negotiated transactions. The timing and number of common stocks repurchased depended on a variety of factors, including price, general business and market conditions, and alternative investment opportunities. We were not obligated to purchase any specific number of common stock and the share repurchase program may be suspended, terminated or modified at any time for any reason.

Shares repurchased under the authorized programs were as follows:

	Year ended December 31,
	2020		2019		2018
Number of shares repurchased		—		3,463,832		1,544,475
Average price per share		—		12.17		16.84
Total cost of repurchases (1)		—		42,167		25,999

(1) Amount excludes transaction costs.

We have no share repurchase program outstanding as of December 31, 2020.

Dividends on our Common Stock

During the years ended December 31, 2020, 2019 and 2018, we neither declared nor paid any dividends.

Dividends on our Preferred Stock

During the year ended December 31, 2020, we paid $553 of dividends to our Series B preferred shareholders.

Accumulated Other Comprehensive Income / (Loss)

The balance of accumulated other comprehensive income / (loss) as of December 31, 2020 and 2019 was comprised of foreign currency translation adjustments. These translation adjustments include foreign currency translation losses for the years ended December 31, 2020, 2019 and 2018 of $13,190, $2,441 and $13,272, respectively.

The accompanying notes are an integral part of these consolidated financial statements.

F-74

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

26. Financial income / (expense), net

The following table presents the components of financial income / (expense), net:

	Year ended December 31,
	2020			2019			2018
Foreign exchange gains / (losses)		11,131			(6,982	)		(10,511	)
Gains / (losses) on derivative financial instruments		10,648			3,648			45
Interest income		3,857			7,944			7,415
Interest expense		(5,471	)		(5,767	)		(4,370	)
Factoring expense		(2,194	)		(15,379	)		(12,368	)
Bank expenses		(1,371	)		(481	)		(434	)
Others		(3,690	)		(198	)		1,056
Total financial income / (expense), net	$	12,910		$	(17,215	)	$	(19,167	)

27. Stock-based compensation

Pursuant to the Amended and Restated 2016 Stock Incentive Plan, we may grant restricted stock units (“RSUs”) and stock options to directors, officers and/or employees. As of December 31, 2020, we had 1,919,099 shares of common stock reserved for new stock-based awards under the Amended and Restated 2016 Stock Incentive Plan. We issue new shares to satisfy the exercise or release of stock-based awards.

Our employee stock options consist of service-based awards. The majority of our stock options vest over 6 years. During the year ended December 31, 2020, we started issuing RSUs as our primary form of stock-based compensation, which vest 33% or 25% after one year and will then vest quarterly over the following three or four years, respectively.

The following table presents a summary of our RSU activity:

	RSUs			Weighted average grant-date fair value
Balance as of January 1, 2018		90,626		$	7.47
Granted		1,394,159		$	12.48
Vested (1)		(164,814	)	$	10.88
Balance as of December 31, 2018		1,319,971		$	12.33
Granted		340,565		$	11.49
Vested		(362,577	)	$	12.23
Cancelled		(148,215	)	$	12.64
Balance as of December 31, 2019		1,149,744		$	12.08
Granted		1,409,680		$	7.89
Vested		(419,367	)	$	10.95
Cancelled		(460,851	)	$	10.32
Balance as of December 31, 2020		1,679,206		$	9.33

(1) 90,626 vested RSU pertained to the former 2015 Stock Incentive Plan. There is no more activity under this plan.

The total market value of shares vested during the years ended December 31, 2020, 2019 and 2018 was $3,648, $5,707 and $1,548, respectively.

The accompanying notes are an integral part of these consolidated financial statements.

F-75

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

The following table presents a summary of our stock option activity:

	Options			Weighted average exercise price		Remaining contractual life (in years)		Aggregate intrinsic value
Balance as of January 1, 2018		3,496,058		$	26.02		—		—
Granted		1,174,489		$	23.50		—		—
Exercised		(4,973	)	$	12.00		—		—
Forfeited / Cancelled		(1,873,213	)	$	26.43		—		—
Balance as of December 31, 2018		2,792,361		$	17.50		—		—
Granted		225,903		$	17.50		—		—
Exercised		(44,096	)	$	12.00		—		—
Forfeited / Cancelled		(436,280	)	$	17.50		—		—
Balance as of December 31, 2019		2,537,888		$	17.50		—		—
Exercised		(33,133	)	$	11.31		—		—
Forfeited / Cancelled		(1,685,242	)	$	17.05		—		—
Balance as of December 31, 2020		819,513		$	9.11		2	$	10.50
Exercisable as of December 31, 2020		423,644		$	6.03		2	$	5.43
Vested and expected to vest after December 31, 2020		819,513		$	12.41		2	$	5.07

The aggregate intrinsic value of outstanding options shown in the stock option activity table above represents the total pretax intrinsic value at December 31, 2020, based on our closing stock price of $12.81 as of the last trading date in 2020. The total intrinsic value of stock options exercised was $10,498, $34,211 and $34,653 for the years ended December 31, 2020, 2019 and 2018.

We did not grant options during the year ended December 31, 2020. The fair value of stock options granted during the years ended December 31, 2019 and 2018 were estimated at the date of grant using appropriate valuation techniques, including the Black-Scholes and Monte Carlo option-pricing models, assuming the following weighted average assumptions:

	2020		2019			2018
Risk-free interest rate		—		1.95	%		2.48	%
Expected volatility		—		39.21	%		41.52	%
Expected life (in years)		—		10			10
Weighted-average estimated fair value of options granted during the year		—		2.91			13.47

During the years ended December 31, 2020, 2019 and 2018, we recognized total stock-based compensation expense of $7,312, $11,686 and $6,766, respectively, within “General and administrative” expenses in our consolidated statements of income. Cash received from stock-based award exercises for the years ended December 31, 2020, 2019 and 2018 was $370, $564 and $136, respectively.

The accompanying notes are an integral part of these consolidated financial statements.

F-76

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

As of December 31, 2020, there was $20,391 of unrecognized stock-based compensation expense related to unvested stock-based awards, which is expected to be recognized in expense over a weighted-average period of 3 years.

28. Leases

We have operating leases for office space, customer centers and a fleet of dedicated vans. Our leases have remaining lease terms of 1 year to 15 years, some of which include options to extend the leases for up to 5 years, and some of which include options to terminate the leases within one year.

As of December 31, 2020, our weighted-average discount rate and weighted-average remaining lease term were approximately 6% and 2 to 12 years, respectively. As of December 31, 2019, our weighted-average discount rate and weighted-average remaining lease term were approximately 9% and 12 years, respectively.

We had no finance leases as of any of years presented. We had not entered into leases that had not yet commenced as of any of the years presented.

As a result of the impact of COVID-19 to the travel industry and our business and results of operations, we renegotiated some of our lease contracts which included anticipated termination, payment forgiveness and deferral of payments, and in some cases the negotiation is still open to new amendments as new events evolve.

Supplemental cash flow information related to leases were as follows:

	Year ended December 31, 2020		Year ended December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating lease payments	$	10,348	$	6,748

As of December 31, 2020, the operating lease liabilities will mature over the following periods:

	As of December 31, 2020
2021		8,650
2022		6,026
2023		4,930
2024		4,276
2025		4,331
2026 and thereafter		18,331
Total remaining lease payments	$	46,544
Less imputed interest		(9,259	)
Total operating lease liabilities:	$	37,285
Current operating lease liability		8,591
Non-current operating lease liability	$	28,694

The accompanying notes are an integral part of these consolidated financial statements.

F-77

Despegar.com, Corp.

Notes to the Consolidated Financial Statements (Continued)

(in thousands of U.S. dollars, except per share data in U.S. dollars)

Operating lease costs were $10,348 and $6,748 for the years ended December 31, 2020 and 2019. Under the lease accounting guidance in effect for the year ended December 31, 2018, rent expense was $4,354, which included operating lease costs as well as expense for non-lease components such as common area maintenance.

Lease Agreements

As of December 31, 2020, we have operating leases outstanding for office space with Inmobiliaria Buenaventuras, S.A. de C.V., an entity related to JBA, member of the board of Viajes Beda.

As of December 31, 2020, our weighted-average discount rate and weighted-average remaining lease term under these agreements were approximately 5.1% and 3 years, respectively. Operating lease costs under these agreements were $1,071 for the year ended December 31, 2020.

Supplemental consolidated balance sheet information related to these lease agreements were as follows:

	As of December 31, 2020
Operating lease right-of-use assets	$	692
Current lease liabilities		378
Non-current lease liabilities		341
Total operating lease liabilities	$	719

29. Valuation and qualifying accounts

The following table presents the changes in our valuation and qualifying accounts:

	Balance, beginning of year		Charges to earnings		Charges to other accounts			Deductions			Balance, end of year
2018
Allowance for credit expected losses		3,164		1,062		(1,098	)		(1,063	)		2,065
2019
Allowance for credit expected losses		2,065		4,294		(104	)		(3,050	)		3,205
2020
Allowance for credit expected losses		3,205		12,270		2,689			(7,369	)		10,795

The accompanying notes are an integral part of these consolidated financial statements.

F-78

EX-4.5

Exhibit 4.5

Execution Version

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into as of September 18, 2020 by and among Despegar.com, Corp, a business company incorporated in the British Virgin Islands with company number 1936519 and whose registered office is at Commerce House, Wickhams Cay 1, P.O. Box 3140, Road Town, Tortola, British Virgin Islands VG1110 (the “Company”), and the person and entities listed as “Holders” on the signature pages hereto (each, a Holder and, collectively, the “Holders”).

RECITALS

WHEREAS, the Company has entered into an Investment Agreement, dated as of August 20, 2020 (as may be amended from time to time, the “Investment Agreement”), with each of the Holders, pursuant to which the Company has sold to the Holders, and the Holders have purchased from the Company, an aggregate of 150,000 Series A Preferred Shares of the Company and warrants entitling the Holders to purchase up to 11,000,000 shares of the Company’s ordinary shares, no par value (“Common Shares”), exercisable at a price per share of US$0.01 (the “Warrants”).

WHEREAS, as agreed under the Investment Agreement, the Company and the Holders will enter into this Agreement for the purpose of granting certain registration rights to the Holders.

NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, the Company and the Holders agree as follows:

1. Definitions.

1.1 Defined Terms. Capitalized terms used, but not defined elsewhere in this Agreement, will have the meanings set forth in this Section 1.1 for all purposes of this Agreement.

“Affiliate” means, as to any Person, any other Person that, directly or indirectly, controls, or is controlled by, or is under common control with, such Person; provided that (i) the Company and its Affiliates shall not be deemed to be Affiliates of any Holder or any of its Affiliates, and (ii) portfolio companies of any Holder or any Affiliate thereof shall not be deemed to be Affiliates of any Holder solely to the extent that any such portfolio company has not received any Confidential Information (as defined in the Confidentiality Agreement between the Company and the Holders) pertaining to the Company from any holder (provided that no Person will be deemed to be in receipt of any Confidential Information solely because any such person serves as a director, officer or employee of such portfolio company). For this purpose, “control” (including, with its correlative meanings, “controlled by” and “under common control with”) shall mean the possession, directly or indirectly, of the power to direct or cause the direction of management or policies of a Person, whether through the ownership of securities or partnership or other ownership interests, by contract or otherwise.

“Board of Directors” or “Board” means the board of directors of the Company.

“Business Day” means any day except a Saturday, a Sunday or other day on which the SEC or banks in the City of New York or in the British Virgin Islands are authorized or required by Law to be closed.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Form F-3” and “Form S-3” means such form under the Securities Act as in effect on the date hereof or any registration form under the Securities Act subsequently adopted by the SEC that permits inclusion or incorporation of substantial information by reference to other documents filed by the Company with the SEC.

“Holder” means any Person owning or having the right to acquire Registrable Securities or any assignee thereof in accordance with Section 2.10 hereof.

“Law” means any federal, state, local, municipal or foreign law (including common law) statute, constitution, code, ordinance, rule, regulation or other requirement or guideline, or any award, decision, decree, injunction, judgment, order, ruling, subpoena, or verdict entered, issued, made, or rendered by any Governmental Body.

“Liquidation Event” shall include (A) the closing of the sale, transfer or other disposition of all or substantially all of the Company’s assets, (B) the consummation of the merger or consolidation of the Company with or into another entity (except a merger or consolidation in which the holders of capital stock of the Company immediately prior to such merger or consolidation continue to hold more than 50% of the voting or economic power of the outstanding capital stock of the Company (or the surviving or acquiring entity), (C) the closing of the transfer (whether by merger, consolidation or otherwise), in one transaction or a series of related transactions, to a Person or “group” (within the meaning of Section 13(d)(3) of the Exchange Act) (other than an underwriter of the Company’s securities), of the Company’s securities if, after such closing, such Person or “group” (within the meaning of Section 13(d)(3) of the Exchange Act) would own more than 50% of voting or economic power of the outstanding capital stock of the Company (or the surviving or acquiring entity) or (D) a liquidation, dissolution or winding up of the Company; provided that a transaction shall not constitute a Liquidation Event if its sole purpose is to change the jurisdiction of the Company’s incorporation or to create a holding company that will be owned in the same proportions by the Persons who held the Company’s securities immediately prior to such transaction.

“Person” means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a Governmental Body.

“register,” “registered,” and “registration” refer to a registration effected by preparing and filing a registration statement or similar document in compliance with the Securities Act, and the declaration or ordering of effectiveness of such registration statement or document.

“Registrable Securities” means (i) the Common Shares issued to the Holders upon the exercise of the Warrants, and (ii) any Common Shares of the Company issued as (or issuable upon the conversion or exercise of any warrant, right or other security that is issued as) a dividend or other distribution with respect to, or in exchange for, or in replacement of, the shares referenced in (i) above. The number of shares of Registrable Securities outstanding shall be determined by

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the number of Common Shares outstanding that are, and the number of Common Shares issuable pursuant to then exercisable or convertible securities that are, Registrable Securities; provided that any such Registrable Securities shall cease to be Registrable Securities to the extent: (i) a Registration Statement with respect to the sale of such Registrable Securities has been declared effective under the Securities Act and such Registrable Securities have been disposed of in accordance with the plan of distribution set forth in such Registration Statement, (ii) such Registrable Securities then owned by a Holder and its Affiliates could be sold in their entirety pursuant to Rule 144 without restriction as to volume or manner of sale during any three-month period, (iii) such Registrable Securities are otherwise transferred, in a transaction in which the Holder’s rights under Section 2 hereof are not assigned; or (iv) the Registrable Securities have ceased to be outstanding

“Representative” means, with respect to any Person, its directors, officers, partners, managers, members, shareholders, employees, independent contractors, agents, advisors (including accountants and financial and legal advisors) and other representatives.

“Rule 144” means Rule 144 under the Securities Act.

“SEC” means the United States Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended.

“Subsidiaries” means, with respect to any Person, any Person of which the first Person (either alone or through or together with any other Subsidiary) either (a) has ordinary voting power to elect a majority of the board of directors or other individuals performing similar functions or (b) owns 50% or more of the outstanding equity interests. Unless otherwise required by the context, “Subsidiary” shall refer to a Subsidiary of the Company.

2. Registration Rights. The Company covenants and agrees as follows:

2.1 Request for Registration.

(a) Subject to the conditions of this Section 2.1, if the Company shall receive at any time after September 18, 2022, a written request from a majority in interest of the Holders of the Registrable Securities then outstanding that the Company file a registration statement under the Securities Act covering the registration of Registrable Securities with an anticipated aggregate offering price of at least $25,000,000 (a “Demand Registration”), then the Company shall, within twenty (20) days of the receipt thereof, use all commercially reasonable efforts to effect, as soon as practicable, the registration under the Securities Act of all Registrable Securities that the Holders request to be registered. The parties acknowledge that, if the Company receives such written request, it shall notify the holders of any other securities of the Company entitled to any applicable registration rights.

(b) If the Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to this Section 2.1 and the Company shall include such information in the written notice referred to in Section 2.1(a). In such event the right of any Holder to include its Registrable Securities in such registration shall be conditioned upon such Holder’s participation in such

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underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting (unless otherwise mutually agreed by the Holders) to the extent provided herein. The Holders initiating such registration shall select the underwriter or underwriters (which underwriter or underwriters shall be reasonably acceptable to the Company) and shall determine the pricing of the Registrable Securities offered pursuant to any registration statement in connection with the Holders’ demand, applicable underwriting discount and other financial terms (including the material terms of the applicable underwriting agreement) and determine the timing of any such registration and sale. All Holders proposing to distribute their securities through such underwriting shall enter into an underwriting agreement in customary form. Notwithstanding any other provision of this Section 2.1, if the underwriter advises the Company that marketing factors require a limitation on the number of securities underwritten (including Registrable Securities), then the Company shall so advise all Holders of Registrable Securities that would otherwise be underwritten pursuant hereto, and the number of shares of Holders of Registrable Securities that may be included in the underwriting shall be allocated: (i) first, to Registrable Securities, together with the holders of any other securities of the Company entitled to inclusion in such registration, that are requested to be included in such registration, pro rata on the basis of the relative number of Registrable Securities owned at such time by each Holder seeking to participate in the registration; and (ii) second, after all such securities requested to be included in clause (i) are included, the shares of the Company that can be sold without having the adverse effect referred to above. Any Registrable Securities excluded or withdrawn from such underwriting shall be withdrawn from the registration.

(c) Notwithstanding the foregoing, the Company shall not be required to effect a registration pursuant to this Section 2.1:

(i) in any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration, unless the Company is already subject to service in such jurisdiction and except as may be required under the Securities Act; or

(ii) after the Company has effected three registrations pursuant to this Section 2.1, and such registrations have been declared or ordered effective; or

(iii) during the period starting with the date sixty (60) days prior to the Company’s good faith estimate of the date of the filing of and ending on a date ninety (90) days following the effective date of a Company-initiated registration subject to Section 2.2 below, provided that the Company is actively employing in good faith all commercially reasonable efforts to cause such registration statement to become effective; or

(iv) if the Holders propose to dispose of Registrable Securities that may be or have been registered on Form S-3 or Form F-3 pursuant to Section 2.3 hereof; or

(v) if the Company shall furnish to Holders requesting a registration statement pursuant to this Section 2.1 a certificate signed by an executive officer of the Company stating that in the good faith judgment of the Board of Directors, it would be materially detrimental to the Company and its Shareholders for such registration statement to be effected at such time, in which event the Company shall have the right to defer such filing for a period of not more than one hundred twenty (120) days after receipt of the request of the Holders, provided that such right

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shall be exercised by the Company not more than once in any twelve (12)-month period and provided further that the Company shall not register any securities for the account of itself or any other shareholder during such one hundred twenty (120) day period (other than a registration relating solely to the sale of securities of participants in a Company stock plan, a registration relating to a corporate reorganization, merger or acquisition or transaction under Rule 145 of the Securities Act, or a registration in which the only Common Shares being registered is Common Shares issuable upon conversion of debt securities).

(d) Each Holder shall keep confidential the fact that a notice for Demand Registration was made and, if applicable, that the Company suspended a Demand Registration pursuant to clause (c) above and the contents of the certificate referred to in clause (c)(iv) above, if any, unless and until otherwise notified by the Company, except (A) for disclosure to such Holder’s directors, officers, employees, agents and professional advisers who reasonably need to know such information for purposes of assisting the Holder with respect to its investment in the Common Shares and agree to keep it confidential, (B) for disclosures to the extent required in order to comply with reporting obligations to its limited partners or other direct or indirect investors who have agreed to keep such information confidential, (C) if and to the extent such matters are publicly disclosed by the Company or any of its Subsidiaries or any other Person that, to the actual knowledge of such Holder, was not subject to an obligation or duty of confidentiality to the Company and its Subsidiaries, (D) as required by law, rule or regulation, provided that the Holder takes commercially reasonable efforts to limit such disclosure and gives prior written notice to the Company of such requirement and the contents of the proposed disclosure to the extent it is permitted to do so under applicable Law, and (E) for disclosure to any other Holder.

2.2 Piggyback Registration.

(a) If, following September 18, 2022 (but without any obligation to do so) the Company proposes to register (including for this purpose a registration effected by the Company for shareholders other than the Holders) any of its stock or other securities under the Securities Act in connection with the public offering of such securities (other than a registration statement pursuant to Section 2.3 (or any other shelf registration statement filed by the Company on behalf of any other holder of securities of the company pursuant to a registration rights agreement), registration relating solely to the sale of securities of participants in a Company stock plan, a registration relating to a corporate reorganization, merger or acquisition or transaction under Rule 145 of the Securities Act, or a registration in which the only Common Shares being registered is Common Shares issuable upon conversion of debt securities), the Company shall, at such time, promptly give each Holder written notice of such registration. Upon the written request of each Holder given within twenty (20) days after mailing of such notice by the Company in accordance with Section 3.7, the Company shall, subject to the provisions of Section 2.2(c) and subject to applicable Law, use all commercially reasonable efforts to cause to be registered under the Securities Act (and make any applicable qualification under any state Blue Sky laws) all of the Registrable Securities that each such Holder requests to be registered.

(b) Right to Terminate Registration. The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2.2 prior to the effectiveness of such registration whether or not any Holder has elected to include securities in such registration. The expenses of such withdrawn registration shall be borne by the Company in accordance with Section 2.6 hereof.

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(c) Underwriting Requirements. In connection with any offering involving an underwriting of shares of the Company, the Company shall not be required under this Section 2.2 to include any of the Holders’ securities in such underwriting unless they accept the terms of the underwriting as agreed upon between the Company and the underwriters selected by the Company (or by other Persons entitled to select the underwriters) and enter into an underwriting agreement in customary form with such underwriters, and then only in such quantity as the underwriters determine in their sole discretion will not jeopardize the success of the offering by the Company. If the total amount of securities, including Registrable Securities, requested by the Holders to be included in such offering exceeds the amount of securities sold other than by the Company that the underwriters determine in their sole discretion is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of such securities, including Registrable Securities, that the underwriters determine in their sole discretion will not jeopardize the success of the offering. In the event that the underwriters determine that less than all of the securities requested to be registered can be included in such offering, then the aggregate number of securities to be included in such offering shall be: (i) first, all of the securities that the Company proposes to sell, and (ii) second, the number of Registrable Securities, together with the holders of any other securities of the Company entitled to inclusion in such registration that, that, in the good-faith opinion of such managing underwriter or underwriters, can be sold without exceeding the maximum offering size.

2.3 Form S-3 or Form F-3 Registration. In case the Company shall receive at any time from the Holders of the Registrable Securities a written request or requests that the Company effect a registration on Form S-3 or Form F-3 pursuant to Rule 415 promulgated under the Securities Act (or any successor rule) and any related qualification or compliance with respect to all or a part of the Registrable Securities owned by such Holder or Holders, the Company shall:

(a) promptly give written notice of the proposed registration, and any related qualification or compliance, to all other Holders; and

(b) use all commercially reasonable efforts to effect, as soon as practicable, such registration and all such qualifications and compliances as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Holders’ Registrable Securities as are specified in such request, provided that the Company shall not be obligated to effect any such registration, qualification or compliance, pursuant to this Section 2.3:

(i) if the Company is not eligible to file a shelf registration statement on Form S-3 or Form F-3 pursuant to Rule 415 of the Securities Act (or any successor rule);

(ii) if the Holders, together with the holders of any other securities of the Company entitled to inclusion in such registration that propose to register Registrable Securities and such other securities (if any) at an aggregate price to the public (net of any underwriters’ discounts or commissions) of less than US$25,000,000;

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(iii) if the Company shall furnish to Holders requesting a registration statement pursuant to this Section 2.3 a certificate signed by an executive officer of the Company stating that in the good faith judgment of the Board of Directors, it would be materially detrimental to the Company and its shareholders for such registration statement to be effected at such time, in which event the Company shall have the right to defer such filing for a period of not more than one hundred twenty (120) days after receipt of the request of the Holders, provided that such right shall be exercised by the Company not more than once in any twelve (12)-month period and provided, further that the Company shall not register any securities for the account of itself or any other shareholder during such one hundred twenty (120) day period (other than a registration relating solely to the sale of securities of participants in a Company stock plan, a registration relating to a corporate reorganization, merger or acquisition or transaction under Rule 145 of the Securities Act, or a registration in which the only Common Shares being registered is Common Shares issuable upon conversion of debt securities);

(iv) if the Company has already effected three shelf registrations on Form S-3 or Form F-3 for any Holders pursuant to this Section 2.3; or

(v) in any particular jurisdiction in which the Company would be required to qualify to do business or to execute a general consent to service of process in effecting such registration, qualification or compliance.

(c) If the Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to this Section 2.3 and the Company shall include such information in the written notice referred to in Section 2.3(a). The provisions of Section 2.1(b) shall be applicable to such request (with the substitution of Section 2.3 for references to Section 2.1).

(d) Subject to the foregoing, the Company shall file a registration statement covering the Registrable Securities and other securities so requested to be registered as soon as practicable after receipt of the request or requests of the Holders. Registrations effected pursuant to this Section 2.3 shall not be counted as requests for registration effected pursuant to Section 2.1.

2.4 Obligations of the Company. Whenever required under this Section 2 to effect the registration of any Registrable Securities, the Company shall use its commercially reasonable efforts to, as expeditiously as reasonably possible:

(a) prepare and file with the SEC a registration statement with respect to such Registrable Securities and use all commercially reasonable efforts to cause such registration statement to become effective within seventy-five (75) days after the initial filing thereof with the SEC, and, upon the request of the Holders of the Registrable Securities registered thereunder, keep such registration statement effective for a period of up to one hundred and eighty (180) days or, if earlier, until the distribution contemplated in the registration statement has been completed;

(b) prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement;

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(c) provide the Holders and their respective counsel with a reasonable opportunity to review and comment on such registration statement and each prospectus included therein (and each amendment or supplement thereto) prior to filing with the SEC, as well as any related correspondence responding to comments from the SEC;

(d) furnish to the Holders, without charge, such number of copies of a prospectus, including a preliminary prospectus and any free writing prospectus, in conformity with the requirements of the Securities Act, including any amendments or supplements thereto, and other documents incident thereto, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them;

(e) use all commercially reasonable efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holders, provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions;

(f) in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter of such offering;

(g) notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, and, at the request of any Holder, prepare and furnish to such seller a reasonable number of copies of a supplement to or an amendment of such prospectus or free writing prospectus (to the extent prepared by or on behalf of the Company) as may be necessary so that, as thereafter delivered to the purchasers of such shares, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading or incomplete in the light of the circumstances then existing;

(h) notify each Holder and its counsel of the issuance by the SEC or any state securities authority of any stop order suspending the effectiveness of a registration statement or the initiation of any proceedings for that purpose and take all reasonable action required to prevent the entry of such stop order or similar notice or to remove it if entered;

(i) cause all such Registrable Securities registered pursuant to this Section 2 to be listed on a national exchange or trading system and on each securities exchange and trading system on which similar securities issued by the Company are then listed; and

(j) provide a transfer agent and registrar for all Registrable Securities registered pursuant to this Agreement and a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration.

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Notwithstanding the provisions of this Section 2, the Company shall be entitled to postpone or suspend, for a reasonable period of time, the filing, effectiveness or use of, or trading under, any registration statement if the Board of Directors shall determine in their good faith judgment that any such filing or the sale of any securities pursuant to such registration statement would:

(i) materially impede, delay or interfere with any material pending or proposed financing, acquisition, sale, merger, corporate reorganization or other similar transaction involving the Company for which the Board of Directors has authorized negotiations;

(ii) materially adversely impair the consummation of any pending or proposed material offering or sale of any class of securities by the Company; or

(iii) require disclosure of material nonpublic information that, if disclosed at such time, would be materially harmful to the interests of the Company and its shareholders; provided that during any such period all executive officers and directors of the Company are also prohibited from selling securities of the Company (or any security of any of the Company’s subsidiaries or Affiliates).

In the event of the suspension of effectiveness of any registration statement pursuant to this Section 2.4, the applicable time period during which such registration statement is to remain effective shall be extended by that number of days equal to the number of days the effectiveness of such registration statement was suspended. Each Holder shall keep confidential the fact that a the Company has suspended the effectiveness of any registration statement unless and until otherwise notified by the Company, except (A) for disclosure to such Holder’s directors, officers, employees, agents and professional advisers who reasonably need to know such information for purposes of assisting the Holder with respect to its investment in the Common Shares and agree to keep it confidential, (B) for disclosures to the extent required in order to comply with reporting obligations to its limited partners or other direct or indirect investors who have agreed to keep such information confidential, (C) if and to the extent such matters are publicly disclosed by the Company or any of its Subsidiaries or any other Person that, to the actual knowledge of such Holder, was not subject to an obligation or duty of confidentiality to the Company and its Subsidiaries, (D) as required by law, rule or regulation, provided that the Holder takes commercially reasonable efforts to limit such disclosure and gives prior written notice to the Company of such requirement and the contents of the proposed disclosure to the extent it is permitted to do so under applicable Law, and (E) for disclosure to any other Holder.

2.5 Information from Holder. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section 2 with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as shall be reasonably required to effect the registration of such Holder’s Registrable Securities.

2.6 Expenses of Registration. All expenses, other than underwriting discounts and commissions, incurred in connection with registrations, filings or qualifications pursuant to Sections 2.1, 2.2 and 2.3, including (without limitation) (i) all registration, filing and qualification fees, printers’ and accounting fees, fees and disbursements of counsel for the Company, and (ii) the reasonable fees and disbursements of one U.S. securities counsel and one local counsel for

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the selling Holders up to a maximum amount of $50,000, shall be borne by the Company. Notwithstanding the foregoing, the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Section 2.1 or Section 2.3 if the registration request is subsequently withdrawn at the request of the Holders of the Registrable Securities to be registered (in which case all participating Holders shall bear such expenses pro rata based upon the number of Registrable Securities that were to be included in the withdrawn registration), unless, in the case of a registration requested under Section 2.1, the Holders of the Registrable Securities agree to forfeit their right to one demand registration pursuant to Section 2.1 and provided that, if at the time of such withdrawal, the Holders have learned of a material adverse change in the condition, business or prospects of the Company from that known to the Holders at the time of their request and have withdrawn the request with reasonable promptness following disclosure by the Company of such material adverse change, then the Holders shall not be required to pay any of such expenses and shall retain their rights pursuant to Sections 2.1 and 2.3.

2.7 Delay of Registration. No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2.

2.8 Indemnification. In the event any Registrable Securities are included in a registration statement under this Section 2:

(a) To the extent permitted by law, the Company will indemnify and hold harmless each Holder, the partners, officers, directors and shareholders of each Holder, any underwriter (as defined in the Securities Act) for such Holder and each Person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any expenses, losses, claims, damages or liabilities (joint or several) to which they may become subject under the Securities Act, the Exchange Act, any state securities laws or any rule or regulation promulgated under the Securities Act, insofar as such expenses, losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively, a “Violation”): (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state in such registration statement a material fact required to be stated therein, or necessary to make the statements therein not misleading or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities laws or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities laws, and the Company will reimburse each such Holder, each of its officers, directors, partners, underwriter, controlling Person or other aforementioned Person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred; provided that the indemnity agreement contained in this Section 2.8(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation that occurs in reliance upon and in conformity with written information furnished expressly for use in connection

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with such registration by any such Holder, underwriter, controlling Person or other aforementioned Person; provided further that the foregoing indemnity agreement with respect to any preliminary prospectus shall not inure to the benefit of any Holder or underwriter or other aforementioned Person, or any Person controlling such Holder or underwriter, from whom the Person asserting any such losses, claims, damages or liabilities purchased shares in the offering, if a copy of the most current prospectus was not sent or given by or on behalf of such Holder or underwriter or other aforementioned Person to such Person, if required by law to have been so delivered, at or prior to the written confirmation of the sale of the shares to such Person, and if the prospectus (as so amended or supplemented) would have cured the defect giving rise to such loss, claim, damage or liability.

(b) To the extent permitted by law, each selling Holder will indemnify and hold harmless the Company, each of its directors, each of its officers who has signed the registration statement, each Person, if any, who controls the Company within the meaning of the Securities Act, legal counsel and accountants for the Company, any underwriter, any other Holder selling securities in such registration statement and any controlling Person of any such underwriter or other Holder, against any losses, claims, damages or liabilities (joint or several) to which any of the foregoing Persons may become subject, under the Securities Act, the Exchange Act, any state securities laws or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities laws, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Holder expressly for use in connection with such registration; and each such Holder will reimburse any Person intended to be indemnified pursuant to this Section 2.8(b) for any legal or other expenses reasonably incurred by such Person in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred; provided that the indemnity agreement contained in this Section 2.8(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder (which consent shall not be unreasonably withheld), and provided that in no event shall any indemnity under this Section 2.8(b) exceed the net proceeds from the offering received by such Holder.

(c) Promptly after receipt by an indemnified party under this Section 2.8 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 2.8, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided that an indemnified party (together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such indemnifying party of liability to the indemnified party under this Section 2.8, but the

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omission to so deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 2.8. No indemnifying party, in the defense of any such claim or litigation, shall, except with the consent of each indemnified party, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.

(d) If the indemnification provided for in this Section 2.8 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, damage or expense referred to herein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, claim, damage or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and the indemnified party on the other hand in connection with the statements or omissions that resulted in such loss, liability, claim, damage or expense, as well as any other relevant equitable considerations; provided that no contribution by any Holder, when combined with any amounts paid by such Holder pursuant to Section 2.8(b), shall exceed the net proceeds from the offering received by such Holder. The relative fault of the indemnifying party and the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

(e) Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control.

(f) The obligations of the Company and Holders under this Section 2.8 shall survive the completion of any offering of Registrable Securities in a registration statement under this Section 2.

2.9 Reports Under the Exchange Act. With a view to making available to the Holders the benefits of Rule 144 and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration or pursuant to a registration on Form S-3 or Form F-3, the Company agrees to use commercially reasonable efforts to:

(a) make and keep public information available, as those terms are understood and defined in Rule 144, from and after the date hereof;

(b) file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act; and

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(c) furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith upon request (i) a written statement by the Company that it has complied with the reporting requirements of Rule 144, the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 or Form F-3 (at any time after it so qualifies), (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested to avail any Holder of any rule or regulation of the SEC that permits the selling of any such securities without registration or pursuant to such form.

2.10 Assignment of Registration Rights. (a) The rights to cause the Company to register Registrable Securities pursuant to this Section 2 may be assigned (but only with all related obligations) by a Holder to (i) a Person that is a “Permitted Transferee” (as defined in the Investment Agreement), or to (ii) any other Person who purchases all Registrable Securities held by the Holder and is an Affiliate of the Company or becomes one as a result of such purchase, provided, in each case,: (a) the Company is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being assigned; (b) such transferee or assignee agrees in writing to be bound by and subject to the terms and conditions of this Agreement; and (c) such assignment shall be effective only if immediately following such transfer the further disposition of such securities by the transferee or assignee is restricted under the Securities Act. The Company may assign its rights and obligations under this agreement to any successor entity.

(b) Each Holder agrees that a legend reading substantially as follows shall be placed on all certificates representing all Registrable Securities of each Holder (and the shares or securities of every other Person subject to the restriction contained in this Section 2.12):

THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS.

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO TRANSFER AND OTHER RESTRICTIONS SET FORTH IN AN INVESTMENT AGREEMENT, DATED AS OF AUGUST 20, 2020, COPIES OF WHICH ARE ON FILE WITH THE SECRETARY OF THE ISSUER.

2.11 Termination of Registration Rights. No Holder shall be entitled to exercise any right provided for in this Section 2 (i) after September 18, 2030, (ii) as to such Holder, such earlier time at which (A) all of the Registrable Securities held by such Holder have been registered or (B) all of the Registrable Securities held by such Holder (together with any Affiliate of the Holder with whom such Holder must aggregate its sales under Rule 144) can be sold in any three (3)-month period without registration under Rule 144 or (iii) after the consummation of a Liquidation Event.

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3. Miscellaneous.

3.1 Amendments; Waivers. Subject to compliance with applicable Law, this Agreement may be amended or supplemented in any and all respects only by written agreement signed by the Company and the Holders of a majority in interest of the Registrable Securities; provided that no such amendment shall be valid without the written consent of Catterton Latin America Management Co. for so long as any affiliate thereof holds any Registrable Securities; provided further that, that no such amendment shall materially and adversely affect the rights of any Holder hereunder without the consent of such Holder..

3.2 Extension of Time, Waiver, Etc. The Company and the Holders representing a majority of Registrable Securities outstanding may, subject to applicable Law, (a) waive any inaccuracies in the representations and warranties of the other party contained herein or in any document delivered pursuant hereto, (b) extend the time for the performance of any of the obligations or acts of the other party or (c) waive compliance by the other party with any of the agreements contained herein applicable to such party or, except as otherwise provided herein, waive any of such party’s conditions. Notwithstanding the foregoing, no failure or delay by the Company or the Holders in exercising any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right hereunder. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party.

3.3 Counterparts. This Agreement may be executed in one or more counterparts (including by facsimile or electronic mail), each of which shall be deemed to be an original but all of which taken together shall constitute one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the parties hereto and delivered to the other parties hereto. Counterparts of this Agreement, and any documents delivered pursuant hereto or in connection herewith, may be delivered via facsimile, electronic mail (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

3.4 Entire Agreement; No Third-Party Beneficiaries; No Recourse. (a) This Agreement constitutes the entire agreement and supersedes all other prior agreements and understandings, both written and oral, among the parties and their Affiliates, or any of them, with respect to the subject matter hereof and thereof.

(b) No provision of this Agreement (other than Section 2.8 hereof) shall confer upon any Person other than the parties hereto and their permitted assigns any rights or remedies hereunder. This Agreement may only be enforced against, and any claims or causes of action that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement may only be made against the entities that are expressly identified as parties hereto, including entities that become parties hereto after the date hereof (to the extent permitted by Section 2.10) and that agree in writing for the benefit of the Company to be bound by the terms of this Agreement applicable to the Holders, and no former, current or future

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equityholders, controlling persons, directors, officers, employees, agents or Affiliates of any party hereto or any former, current or future equityholder, controlling person, director, officer, employee, general or limited partner, member, manager, advisor, agent or Affiliate of any of the foregoing (each, a “Non-Recourse Party”) shall have any liability for any obligations or liabilities of the parties to this Agreement or for any claim (whether in tort, contract or otherwise) based on, in respect of, or by reason of, the transactions contemplated hereby or in respect of any representations made or alleged to be made in connection herewith. Without limiting the rights of any party against the other parties hereto, in no event shall any party or any of its Affiliates seek to enforce this Agreement against, make any claims for breach of this Agreement against, or seek to recover monetary damages from any Non-Recourse Party.

3.5 Governing Law; Jurisdiction. (a) This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York applicable to contracts executed in and to be performed entirely within that State, regardless of the laws that might otherwise govern under any applicable conflict of Laws principles.

(b) All actions arising out of or relating to this Agreement shall be heard and determined in the U.S. federal and New York state courts in the Borough of Manhattan in New York City and the parties hereto hereby irrevocably submit to the exclusive jurisdiction and venue of such courts in any such action and irrevocably waive the defense of an inconvenient forum or lack of jurisdiction to the maintenance of any such action. The consents to jurisdiction and venue set forth in this Section 3.5 shall not constitute general consents to service of process in the State of New York and shall have no effect for any purpose except as provided in this paragraph and shall not be deemed to confer rights on any Person other than the parties hereto. Each party hereto agrees that service of process upon such party in any action arising out of or relating to this Agreement shall be effective if notice is given by overnight courier at the address set forth in Section 3.8 of this Agreement. The parties hereto agree that a final judgment in any such action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable Law; provided that nothing in the foregoing shall restrict any party’s rights to seek any post-judgment relief regarding, or any appeal from, a final trial court judgment.

3.6 WAIVER OF JURY TRIAL. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, (C) IT MAKES SUCH WAIVER VOLUNTARILY AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS IN THIS SECTION 3.6.

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3.7 Notices. All notices, requests and other communications to any party hereunder shall be in writing and shall be deemed given if delivered personally, by facsimile (which is confirmed), emailed (which is confirmed) or sent by overnight courier (providing proof of delivery) to the parties at the following addresses:

(a) If to the Company, to it at:

Despegar.com, Corp.

Av. Jujuy 2013, Ciudad Autónoma de Buenos Aires, Argentina

Attn: Mariano Scagliarini, General Counsel

Email:

with a copy (which shall not constitute notice) to:

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

Attn: Juan Francisco Mendez

Fax:

Email:

(b) If to a Holder, at:

c/o Catterton Latin America Management Co.

30 Rockefeller Plaza, Suite 5405

New York, NY 10112 Attn: Shari Miller

Email:

with a copy to (which copy alone shall not constitute notice):

Proskauer Rose LLP

Eleven Times Square

New York, NY 10036

Attn: Daniel Forman

          Lily Desmond

Phone:

Fax:

Email:

or such other address, email address or facsimile number as such party may hereafter specify by like notice to the other parties hereto. All such notices, requests and other communications shall be deemed received on the date of actual receipt by the recipient thereof if received prior to 5:00 p.m. local time in the place of receipt and such day is a Business Day in the place of receipt.

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Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding Business Day in the place of receipt.

3.8 Severability. If any term, condition or other provision of this Agreement is determined by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced by any rule of Law or public policy, all other terms, provisions and conditions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that any term, condition or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible to the fullest extent permitted by applicable Law.

3.9 Interpretation. (a) When a reference is made in this Agreement to an Article, a Section, Exhibit or Schedule, such reference shall be to an Article of, a Section of, or an Exhibit or Schedule to this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement unless the context requires otherwise. The words “date hereof” when used in this Agreement shall refer to the date of this Agreement. The terms “or,” “any” and “either” are not exclusive. The word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” The words “made available to the Holders” and words of similar import refer to documents (A) posted to a diligence website by or on behalf of the Company and made available to the Holders or their respective Representatives or (B) delivered in Person or electronically to the Holders or their respective Representatives. All terms defined in this Agreement shall have the defined meanings when used in any document made or delivered pursuant hereto unless otherwise defined therein. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term. Any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein. Unless otherwise specifically indicated, all references to “dollars” or “$” shall refer to the lawful money of the United States. References to a Person are also to its permitted assigns and successors. When calculating the period of time between which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded (unless otherwise required by Law, if the last day of such period is not a Business Day, the period in question shall end on the next succeeding Business Day).

(b) The parties hereto have participated jointly in the negotiation and drafting of this Agreement, and in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as jointly drafted by the parties hereto and no presumption or burden

of proof shall arise favoring or disfavoring any party hereto by virtue of the authorship of any provision of this Agreement.

[Remainder of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first above written.

DESPEGAR.COM, CORP.
By:	/s/ Alberto López Gaffney
Name: Alberto López Gaffney
Title: Chief Financial Officer

[Signature Page to Registration Rights Agreement (Catterton)]

LCLA DAYLIGHT LP
By: CALA2 Managers, Ltd, its General Partner
By:	/s/ Dirk Donath
Name: Dirk Donath
Title: Director

[Signature Page to Registration Rights Agreement]

EX-4.6

Exhibit 4.6

Execution Version

SHELF REGISTRATION RIGHTS AGREEMENT

THIS SHELF REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into as of September 21, 2020 by and among Despegar.com, Corp, a business company incorporated in the British Virgin Islands with company number 1936519 and whose registered office is at Commerce House, Wickhams Cay 1, P.O. Box 3140, Road Town, Tortola, British Virgin Islands VG1110 (the “Company”), and the person and entities listed as “Holders” on the signature pages hereto (each, a Holder and, collectively, the “Holders”).

RECITALS

WHEREAS, the Company has entered into an Investment Agreement, dated as of August 20, 2020 (as may be amended from time to time, the “ Investment Agreement”), with each of the Holders, pursuant to which the Company has sold to the Holders, and the Holders have purchased from the Company, an aggregate of 50,000 Series B Convertible Preferred Shares of the Company (the “Purchased Shares”), convertible into ordinary shares of the Company, no par value (“Common Shares”).

WHEREAS, as a condition to each of the Holders’ obligations under the Investment Agreement, the Company and the Holders will enter into this Agreement for the purpose of granting certain registration rights to the Investors.

NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, the Company and the Holders agree as follows:

Section 1. Definitions. Capitalized terms used, but not defined elsewhere in this Agreement, will have the meanings set forth in this Section 1 for all purposes of this Agreement.

“Affiliate” means, as to any Person, any other Person that, directly or indirectly, controls, or is controlled by, or is under common control with, such Person; provided, however, that (i) the Company and its Affiliates shall not be deemed to be Affiliates of any Holder or any of its Affiliates, and (ii) portfolio companies of any Holder or any Affiliate thereof shall not be deemed to be Affiliates of any Holder solely to the extent that any such portfolio company has not received any Confidential Information (as defined in the Confidentiality Agreement between the Company and the Holders) pertaining to the Company from any holder (provided that no Person will be deemed to be in receipt of any Confidential Information solely because any such person serves as a director, officer or employee of such portfolio company). For this purpose, “control” (including, with its correlative meanings, “controlled by” and “under common control with”) shall mean the possession, directly or indirectly, of the power to direct or cause the direction of management or policies of a Person, whether through the ownership of securities or partnership or other ownership interests, by contract or otherwise.

“Board of Directors” or “Board” means the board of directors of the Company.

“ Business Day” means any day except a Saturday, a Sunday or other day on which the SEC or banks in the City of New York, in the British Virgin Islands or in the United Arab Emirates are authorized or required by Law to be closed.

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“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“FINRA” shall mean the Financial Industry Regulatory Authority.

“Form F-3” and “Form S-3” means such form under the Securities Act as in effect on the date hereof or any registration form under the Securities Act subsequently adopted by the SEC that permits inclusion or incorporation of substantial information by reference to other documents filed by the Company with the SEC.

“Governmental Authority” means any government, court, regulatory or administrative agency, commission, arbitrator or authority or other legislative, executive or judicial governmental entity (in each case including any self-regulatory organization), whether federal, state or local, domestic, foreign or multinational.

“Law” means any federal, state, local, municipal or foreign law (including common law) statute, constitution, code, ordinance, rule, regulation or other requirement or guideline, or any award, decision, decree, injunction, judgment, order, ruling, subpoena, or verdict entered, issued, made, or rendered by any Governmental Authority.

“Liquidation Event” shall include (A) the closing of the sale, transfer or other disposition of all or substantially all of the Company’s assets, (B) the consummation of the merger or consolidation of the Company with or into another entity (except a merger or consolidation in which the holders of capital stock of the Company immediately prior to such merger or consolidation continue to hold more than 50% of the voting or economic power of the outstanding capital stock of the Company (or the surviving or acquiring entity), (C) the closing of the transfer (whether by merger, consolidation or otherwise), in one transaction or a series of related transactions, to a Person or “group” (within the meaning of Section 13(d)(3) of the Exchange Act) (other than an underwriter of the Company’s securities), of the Company’s securities if, after such closing, such Person or “group” (within the meaning of Section 13(d)(3) of the Exchange Act) would own more than 50% of voting or economic power of the outstanding capital stock of the Company (or the surviving or acquiring entity) or (D) a liquidation, dissolution or winding up of the Company; provided that a transaction shall not constitute a Liquidation Event if its sole purpose is to change the jurisdiction of the Company’s incorporation or to create a holding company that will be owned in the same proportions by the Persons who held the Company’s securities immediately prior to such transaction.

“ Person” means an individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization or other entity or organization, including a Governmental Authority.

“register,” “registered,” and “registration” refer to a registration effected by preparing and filing a registration statement or similar document in compliance with the Securities Act, and the declaration or ordering of effectiveness of such registration statement or document.

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“Registrable Securities” means (i) the Common Shares issued to the Holders upon the conversion of the Purchased Shares in accordance with the terms thereof, and (ii) any Common Shares of the Company issued as (or issuable upon the conversion or exercise of any warrant, right or other security that is issued as) a dividend or other distribution with respect to, or in exchange for, or in replacement of, the shares referenced in (i) above. The number of shares of Registrable Securities outstanding shall be determined by the number of Common Shares outstanding that are, and the number of Common Shares issuable pursuant to then exercisable or convertible securities that are, Registrable Securities; provided that any such Registrable Securities shall cease to be Registrable Securities to the extent: (i) a registration statement with respect to the sale of such Registrable Securities has been declared effective under the Securities Act and such Registrable Securities have been disposed of in accordance with the plan of distribution set forth in such registration statement, (ii) such Registrable Securities then owned by a Holder and its Affiliates could be sold in their entirety pursuant to Rule 144 without restriction as to volume or manner of sale during any three-month period, (iii) such Registrable Securities are otherwise transferred, in a transaction in which the Holder’s rights under Section 2 hereof are not assigned; or (iv) the Registrable Securities have ceased to be outstanding.

“Representative” means, with respect to any Person, its directors, officers, principals, partners, managers, members, employees, consultants, agents, advisors (including accountants and financial and legal advisors), attorneys, accountants, other advisors and other representatives.

“Rule 144” means Rule 144 under the Securities Act.

“SEC” means the United States Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Subsidiaries” when used with respect to any Person, means any corporation, limited liability company, partnership, association, trust or other entity of which (x) securities or other ownership interests representing 50% or more of the ordinary voting power (or, in the case of a partnership, 50% or more of the general partnership interests) or (y) sufficient voting rights to elect at least a majority of the board of directors or other governing body are, as of such date, owned by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person.

Section 2. Registration. The Company covenants and agrees as follows:

2.1 Mandatory Registration.

(a) The Company shall prepare and file with the SEC a registration statement on Form S-3 or Form F-3 pursuant to Rule 415 promulgated under the Securities Act (or any successor rule, “Rule 415”) so as to permit the resale of such Registrable Securities by the Holders, and shall use its commercially reasonable efforts to (a) cause such registration statement to be declared effective within the date that is six (6) months following the date hereof and (b) cause such registration statement to remain effective and to be supplemented and amended to the extent necessary to ensure that such registration statement is available or, if not available, that another registration statement is available, for the resale of all the Registrable Securities held by the Holders at all times until the earlier of (i) the date on which the Holders shall have sold, either publicly pursuant to such registration statement or pursuant to Rule 144, all the Registrable Securities or (ii) the date on which the Holders can sell all of its Registrable Securities under

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Rule 144 without restriction as to volume or manner of sale during any three-month period. A registration statement filed pursuant to this Section 2.1 shall provide for the resale pursuant to any method or combination of methods legally available to, and requested by, the Holders. As soon as practicable following the effective date of a registration statement filed pursuant to this Section 2.1, but in any event within three (3) Business Days of such date, the Company shall notify the Holders of the effectiveness of such registration statement.

(b) If the Holders of at least 50.0% of the then outstanding number of Registrable Securities held by the Holders (the “Underwritten Demand Holders”) elect to distribute the Registrable Securities by means of an underwriting and reasonably expect aggregate gross proceeds in excess of $25,000,000 (the “Holders’ Minimum Amount”) from such underwritten offering, they shall so advise the Company promptly and the Company shall enter into an underwriting agreement in a form as is customary in underwritten offerings of securities by the Company with the underwriters selected by the Underwritten Demand Holders and reasonably satisfactory to the Company and shall take all such other reasonable actions as are requested by the managing underwriter or underwriters in order to expedite or facilitate the disposition of such Registrable Securities; provided, however, that the Company shall have no obligation to facilitate or participate in more than two (2) underwritten offerings pursuant to this Section 2.1. In connection with any underwritten offering contemplated in this Section 2.1, the underwriting agreement into which each Holder and the Company shall enter shall contain such representations, covenants, indemnities and other rights and obligations as are customary in underwritten offerings of securities by the Company; provided, that no Holder shall be required to make any representations or warranties to or agreements with the Company or the underwriters other than representations, warranties or agreements regarding such Holder’s authority to enter into such underwriting agreement and to sell, and its ownership of, the securities being registered on its behalf, its intended method of distribution, the accuracy of information provided by a Holder specifically for use in such registration statement or prospectus, and any other representation required by law. The Holders shall determine the pricing of the Registrable Securities offered pursuant to the registration statement, applicable underwriting discount and other financial terms (including the material terms of the applicable underwriting agreement) and determine the timing of any such registration and sale. Notwithstanding any other provision of this Section 2.1, if the underwriter advises the Company that marketing factors require a limitation on the number of securities underwritten (including Registrable Securities), then the Company shall so advise all Holders of Registrable Securities that would otherwise be underwritten pursuant hereto, and the number of shares of Holders of Registrable Securities that may be included in the underwriting shall be allocated: (i) first, to Registrable Securities, together with the holders of any other securities of the Company entitled to inclusion in such registration, that are requested to be included in such registration, pro rata on the basis of the relative number of Registrable Securities owned at such time by each Holder seeking to participate in the registration; and (ii) second, after all such securities requested to be included in clause (i) are included, the shares of the Company that can be sold without having the adverse effect referred to above. Any Registrable Securities excluded or withdrawn from such underwriting shall be withdrawn from the registration.

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2.2 Obligations of the Company. In connection with the filing of any registration statement or sale of any Registrable Securities as provided in this Agreement, the Company shall use its commercially reasonable efforts to, as expeditiously as reasonably possible:

(a) prepare and file with the SEC the registration statement, within the relevant time period specified in Section 2.1, on the appropriate form under the Securities Act, which form, subject to Section 2.1, (1) shall be selected by the Company, (2) shall be available for the registration and sale of the Registrable Securities by the selling Holders thereof, (3) shall comply as to form in all material respects with the requirements of the applicable form and include or incorporate by reference all financial statements required by the SEC to be filed therewith or incorporated by reference therein, (4) shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and (5) shall comply in all respects with the requirements of Regulation S-T under the Securities Act, and otherwise comply with its obligations set forth herein;

(b) prepare and file with the SEC such amendments (including post-effective amendments) and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement in accordance with the intended method(s) of distribution by the selling Holders thereof; provided, that should the Company file a post-effective amendment to any registration statement, the Company will use its commercially reasonable efforts to have such filing declared effective by the SEC within thirty (30) day consecutive Business Days following the date of filing, which such period shall be extended for an additional thirty (30) Business Days if the Company receives a comment letter from the SEC in connection therewith;

(c) provide the Holders and their respective counsel with a reasonable opportunity to review and comment on such registration statement and each prospectus included therein (and each amendment or supplement thereto) prior to filing with the SEC, as well as any related correspondence responding to comments from the SEC;

(d) (i) notify each Holder, within three (3) Business Days after filing, that a registration statement with respect to the Registrable Securities has been filed and advise such Holders that the distribution of Registrable Securities will be made in accordance with any method or combination of methods legally available by the Holders of any and all Registrable Securities, (ii) furnish to the Holders, without charge, (x) at least one copy of any registration statement and any amendment(s) thereto, including all financial statements and schedules, all documents incorporated therein by reference and all exhibits, (y) upon the effectiveness of any amendment(s) to a registration statement, such reasonable number of copies of a prospectus, including a preliminary prospectus and any free writing prospectus, in conformity with the requirements of the Securities Act, including any amendments or supplements thereto, and other documents incident thereto, and (z) such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them, and (iii) hereby consent to the use of the prospectus or any amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by the prospectus or any amendment or supplement thereto;

(e) use all commercially reasonable efforts to (i) register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holders, (ii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times, and (iii) take all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions, provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions;

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(f) in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter of such offering;

(g) notify each Holder of Registrable Securities covered by such registration statement as promptly as reasonably practicable after becoming aware of such event or facts in writing (i) when any post-effective amendments and supplements thereto become effective, (ii) of any request by the SEC or any state securities authority for post-effective amendments and supplements to a registration statement and prospectus or for additional information after such registration statement has become effective, (iii) of the issuance by the SEC or any state securities authority of any stop order suspending the effectiveness of a registration statement or the initiation of any proceedings for that purpose, (iv) if, between the effective date of a registration statement and the closing of any sale of Registrable Securities covered thereby, the representations and warranties of the Company contained in any underwriting agreement, securities sales agreement or other similar agreement, if any, relating to the offering cease to be true and correct in all material respects, (v) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities, for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, or (vi) of the filing of a post-effective amendment to such registration statement;

(h) notify each Holder of Registrable Securities covered by such registration statement at any time in writing when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, and, at the request of any Holder, prepare and furnish to such Holder a reasonable number of copies of a supplement to or an amendment of such prospectus or free writing prospectus (to the extent prepared by or on behalf of the Company) as may be necessary so that, as thereafter delivered to the purchasers of such shares, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading or incomplete in the light of the circumstances then existing;

(i) notify each Holder and its counsel of the issuance by the SEC or any state securities authority of any stop order or other actions suspending the effectiveness of a registration statement or the qualification of any Registrable Securities for sale in any jurisdiction or the initiation of any proceedings for that purpose and the resolution thereof and take all reasonable action required to prevent the entry of such stop order or similar notice or to remove it if entered;

(j) cause all such Registrable Securities registered pursuant to this Section 2 to be listed on a national exchange or trading system and on each securities exchange and trading system on which similar securities issued by the Company are then listed for which the Company shall pay all fees and expenses in connection with satisfying its obligation thereunder;

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(k) cooperate with the Holder to facilitate the timely preparation and delivery of the Registrable Securities in book-entry form or with certificates (not bearing any restrictive legend) representing the Registrable Securities disposed of pursuant to any registration statement and enable such certificates to be in such denominations or amounts as the Holder may reasonably request and registered in such names as the Holder may request;

(l) if reasonably requested by the Holder, the Company shall promptly incorporate in a prospectus supplement or post-effective amendment to any Registration Statement such information as the Holder believes should be included therein relating to the sale and distribution of Registrable Securities, including, without limitation, information with respect to the number of Registrable Securities being sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities;

(m) if reasonably requested by the Holder at any time, the Company shall deliver to the Holder a written confirmation from the Company’s counsel of whether or not the effectiveness of any registration statement has lapsed at any time for any reason (including, without limitation, the issuance of a stop order) and whether or not such registration statement is currently effective and available to the Company for sale of all of the Registrable Securities;

(n) cooperate and assist in any filings required to be made with FINRA and in the performance of any due diligence investigation by any underwriter and its counsel (including any “qualified independent underwriter” that is required to be retained in accordance with the rules and regulations of FINRA); and

(o) provide a transfer agent and registrar for all Registrable Securities registered pursuant to this Agreement and a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration.

Notwithstanding the provisions of this Section 2, the Company shall be entitled to postpone or suspend, for a reasonable period of time, the filing, effectiveness or use of, or trading under, any registration statement if the Board of Directors shall determine in their good faith judgment that any such filing or the sale of any securities pursuant to such registration statement would:

(p) materially impede, delay or interfere with any material pending or proposed financing, acquisition, sale, merger, corporate reorganization or other similar transaction involving the Company for which the Board of Directors has authorized negotiations;

(q) materially adversely impair the consummation of any pending or proposed material offering or sale of any class of securities by the Company; or

(r) require disclosure of material nonpublic information that, if disclosed at such time, would be materially harmful to the interests of the Company and its shareholders; provided that during any such period all executive officers and directors of the Company are also prohibited from selling securities of the Company (or any security of any of the Company’s Subsidiaries or Affiliates).

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In the event of the suspension of effectiveness of any registration statement pursuant to this Section 2.2, the applicable time period during which such registration statement is to remain effective shall be extended by that number of days equal to the number of days the effectiveness of such registration statement was suspended. Each Holder shall keep confidential the fact that a the Company has suspended the effectiveness of any registration statement unless and until otherwise notified by the Company, except (A) for disclosure to such Holder’s directors, officers, employees, agents and professional advisers who reasonably need to know such information for purposes of assisting the Holder with respect to its investment in the Common Shares and agree to keep it confidential, (B) for disclosures to the extent required in order to comply with reporting obligations to its limited partners or other direct or indirect investors who have agreed to keep such information confidential, (C) if and to the extent such matters are publicly disclosed by the Company or any of its Subsidiaries or any other Person that, to the actual knowledge of such Holder, was not subject to an obligation or duty of confidentiality to the Company and its Subsidiaries, (D) as required by law, Rule or regulation, provided that the Holder takes commercially reasonable efforts to limit such disclosure and gives prior written notice to the Company of such requirement and the contents of the proposed disclosure to the extent it is permitted to do so under applicable Law, and (E) for disclosure to any other Holder.

2.3 Information from Holder. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section 2 with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as shall be reasonably required to effect the registration of such Holder’s Registrable Securities (which, for the avoidance of doubt, shall consist solely of the such Holder’ name, the number of shares to be sold by such Holder pursuant to such registration statement, and the expected plan of distribution (such information, the “Holder Information”)).

2.4 Expenses of Registration. All expenses, other than underwriting discounts and commissions, incurred in connection with registrations, filings or qualifications pursuant to Section 2.1, including (without limitation) all registration, filing and qualification fees, printers’ and accounting fees, fees and disbursements of counsel for the Company and the reasonable fees and disbursements of one counsel for the selling Holders, not to exceed $50,000 in the aggregate for any registration, shall be borne by the Company.

2.5 Delay of Registration. No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2.

2.6 Indemnification. In the event any Registrable Securities are included in a registration statement under this Section 2:

(a) To the extent permitted by law, the Company will indemnify and hold harmless each Holder, the partners, officers, directors and shareholders of each Holder, any underwriter (as defined in the Securities Act) for such Holder and each Person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any expenses, losses, claims, damages or liabilities (joint or several) to which they may become subject under the Securities Act, the Exchange Act, any state securities laws or any Rule or

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regulation promulgated under the Securities Act, insofar as such expenses, losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively, a “ Violation”): (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state in such registration statement a material fact required to be stated therein, or necessary to make the statements therein not misleading or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities laws or any Rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities laws, and the Company will reimburse each such Holder, each of its officers, directors, partners, underwriter, controlling Person or other aforementioned Person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred; provided that the indemnity agreement contained in this Section 2.6(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation that occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by any such Holder, underwriter, controlling Person or other aforementioned Person; provided, further, however, that the foregoing indemnity agreement with respect to any preliminary prospectus shall not inure to the benefit of any Holder or underwriter or other aforementioned Person, or any Person controlling such Holder or underwriter, from whom the Person asserting any such losses, claims, damages or liabilities purchased shares in the offering, if a copy of the most current prospectus was not sent or given by or on behalf of such Holder or underwriter or other aforementioned Person to such Person, if required by law to have been so delivered, at or prior to the written confirmation of the sale of the shares to such Person, and if the prospectus (as so amended or supplemented) would have cured the defect giving rise to such loss, claim, damage or liability.

(b) To the extent permitted by law, each selling Holder will indemnify and hold harmless the Company, each of its directors, each of its officers who has signed the registration statement, each Person, if any, who controls the Company within the meaning of the Securities Act, legal counsel and accountants for the Company, any underwriter, any other Holder selling securities in such registration statement and any controlling Person of any such underwriter or other Holder, against any losses, claims, damages or liabilities (joint or several) to which any of the foregoing Persons may become subject, under the Securities Act, the Exchange Act, any state securities laws or any Rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities laws, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Holder expressly for use in connection with such registration (which, for the avoidance of doubt, shall be limited to the Holder Information); and each such Holder will reimburse any Person intended to be indemnified pursuant to this Section 2.6(b) for any legal or other expenses reasonably incurred by such Person in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred; provided that the indemnity agreement contained in this Section 2.6(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder (which consent shall not be unreasonably withheld), and provided that in no event shall any indemnity under this Section 2.6(b) exceed the net proceeds from the offering received by such Holder.

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(c) Promptly after receipt by an indemnified party under this Section 2.6 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 2.6, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided that an indemnified party (together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such indemnifying party of liability to the indemnified party under this Section 2.6 but the omission to so deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 2.6. No indemnifying party, in the defense of any such claim or litigation, shall, except with the consent of each indemnified party, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.

(d) If the indemnification provided for in this Section 2.6 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, damage or expense referred to herein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, claim, damage or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and the indemnified party on the other hand in connection with the statements or omissions that resulted in such loss, liability, claim, damage or expense, as well as any other relevant equitable considerations; provided that no contribution by any Holder, when combined with any amounts paid by such Holder pursuant to Section 2.6(b), shall exceed the net proceeds from the offering received by such Holder. The relative fault of the indemnifying party and the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

(e) Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with an underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control.

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(f) The obligations of the Company and Holders under this Section 2.6 shall survive the completion of any offering of Registrable Securities in a registration statement under this Section 2.

2.7 Reports Under the Exchange Act. With a view to making available to the Holders the benefits of Rule 144 and any other Rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration or pursuant to a registration on Form S-3 or Form F-3, the Company agrees to use commercially reasonable efforts to:

(a) make and keep public information available, as those terms are understood and defined in Rule 144, from and after the date hereof;

(b) file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act;

(c) furnish to any Holder, so long as such Holder owns any Registrable Securities, forthwith upon request (i) a written statement by the Company that it has complied with the reporting requirements of Rule 144, the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 or Form F-3 (at any time after it so qualifies), (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested to avail any Holder of any Rule or regulation of the SEC that permits the selling of any such securities without registration or pursuant to such form; and

(d) take such additional action as is reasonably requested by a Holder to enable such Holder to sell the Registrable Securities pursuant to Rule 144, including, without limitation, delivering all such certificates and instructions to the Company’s transfer agent as may be reasonably requested from time to time by such Holder and otherwise provide reasonable cooperation to the Holder and Holder’s broker to effect such sale of securities pursuant to Rule 144.

2.8 Assignment of Registration Rights. A Holder may assign its rights under this Agreement to a Person that is a “Permitted Transferee” (as defined in the Investment Agreement, provided: (a) the Company is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being assigned; (b) such transferee or assignee agrees in writing to be bound by and subject to the terms and conditions of this Agreement; and (c) such assignment shall be effective only if immediately following such transfer the further disposition of such securities by the transferee or assignee is restricted under the Securities Act. The Company may only assign its rights and obligations under this agreement to any successor entity; provided, that such successor entity agrees in writing to assume all of the Company’s rights and obligations under this Agreement.

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2.9 Termination of Registration Rights. This Agreement and the rights of each Holder hereunder shall terminate upon the date that all of the Registrable Securities cease to be Registrable Securities. Notwithstanding the foregoing, the obligations of the parties under Section 2.6 of this Agreement shall remain in full force and effect following such time.

Section 3. Miscellaneous.

3.1 Amendments; Waivers . Subject to compliance with applicable Law, this Agreement may be amended or supplemented in any and all respects only by written agreement of the parties hereto.

3.2 Extension of Time, Waiver, Etc. The Company and the Holders of Registrable Securities outstanding may, subject to applicable Law, (a) waive any inaccuracies in the representations and warranties of the other party contained herein or in any document delivered pursuant hereto, (b) extend the time for the performance of any of the obligations or acts of the other party or (c) waive compliance by the other party with any of the agreements contained herein applicable to such party or, except as otherwise provided herein, waive any of such party’s conditions. Notwithstanding the foregoing, no failure or delay by the Company or the Holders in exercising any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right hereunder. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party.

3.3 Counterparts. This Agreement may be executed in one or more counterparts (including by facsimile or electronic mail), each of which shall be deemed to be an original but all of which taken together shall constitute one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the parties hereto and delivered to the other parties hereto. Counterparts of this Agreement, and any documents delivered pursuant hereto or in connection herewith, may be delivered via facsimile, electronic mail (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

3.4 Entire Agreement; No Third-Party Beneficiaries; No Recourse; No Inconsistent Agreements. (a) This Agreement constitutes the entire agreement and supersedes all other prior agreements and understandings, both written and oral, among the parties and their Affiliates, or any of them, with respect to the subject matter hereof and thereof.

(b) No provision of this Agreement (other than Section 2.6 hereof) shall confer upon any Person other than the parties hereto and their permitted assigns any rights or remedies hereunder. This Agreement may only be enforced against, and any claims or causes of action that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement may only be made against the entities that are expressly identified as parties hereto, including entities that become parties hereto after the date hereof (to the extent permitted by Section 2.8) and that agree in writing for the benefit of the Company to be bound by the terms of this Agreement applicable to the Holders, and no former, current or future

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equityholders, controlling persons, directors, officers, employees, agents or Affiliates of any party hereto or any former, current or future equityholder, controlling person, director, officer, employee, general or limited partner, member, manager, advisor, agent or Affiliate of any of the foregoing (each, a “Non-Recourse Party”) shall have any liability for any obligations or liabilities of the parties to this Agreement or for any claim (whether in tort, contract or otherwise) based on, in respect of, or by reason of, the transactions contemplated hereby or in respect of any representations made or alleged to be made in connection herewith. Without limiting the rights of any party against the other parties hereto, in no event shall any party or any of its Affiliates seek to enforce this Agreement against, make any claims for breach of this Agreement against, or seek to recover monetary damages from any Non-Recourse Party.

(c) The Company has not entered into any agreement which is inconsistent with the rights granted to the Holders of Registrable Securities pursuant to this Agreement or otherwise conflicts with the provisions of this Agreement except as has been waived pursuant to the terms of such other agreement on or prior to the date hereof. The rights granted to the Holders hereunder do not conflict with the rights granted to the holders of the Company’s other issued and outstanding securities under any such agreements, except (i) as may be waived pursuant to the terms of such other agreement, or (ii) as would not reasonably be expected to prevent the exercise by the Holders of Registrable Securities of the rights granted to such Holders in this Agreement.

3.5 Governing Law; Jurisdiction. (a) This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York applicable to contracts executed in and to be performed entirely within that State, regardless of the laws that might otherwise govern under any applicable conflict of Laws principles.

(b) All actions arising out of or relating to this Agreement shall be heard and determined in the U.S. federal and New York state courts in the Borough of Manhattan in New York City and the parties hereto hereby irrevocably submit to the exclusive jurisdiction and venue of such courts in any such action and irrevocably waive the defense of an inconvenient forum or lack of jurisdiction to the maintenance of any such action. The consents to jurisdiction and venue set forth in this Section 3.5 shall not constitute general consents to service of process in the State of New York and shall have no effect for any purpose except as provided in this paragraph and shall not be deemed to confer rights on any Person other than the parties hereto. Each party hereto agrees that service of process upon such party in any action arising out of or relating to this Agreement shall be effective if notice is given by overnight courier at the address set forth in Section 3.8 of this Agreement. The parties hereto agree that a final judgment in any such action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable Law; provided that nothing in the foregoing shall restrict any party’s rights to seek any post-judgment relief regarding, or any appeal from, a final trial court judgment.

3.6 WAIVER OF JURY TRIAL. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT

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OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, (C) IT MAKES SUCH WAIVER VOLUNTARILY AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS IN THIS SECTION 3.6.

3.7 Notices. All notices, requests and other communications to any party hereunder shall be in writing and shall be deemed given if delivered personally, by facsimile (which is confirmed), emailed (which is confirmed) or sent by overnight courier (providing proof of delivery) to the parties at the following addresses:

(a) If to the Company, to it at:

Despegar.com, Corp.

Av. Jujuy 2013, Ciudad Autónoma de Buenos Aires, Argentina

Attn: Mariano Scagliarini, General Counsel

Email:

with a copy (which shall not constitute notice) to:

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

Attn: Juan Francisco Mendez

Phone:

Fax:

Email:

(b) If to a Holder, at:

Waha LATAM Investments Limited

c/o Waha Capital PJSC

42 / 43 Floor Etihad Towers, Tower 3, Abu Dhabi, UAE

Attn: Mr. Aseem Gupta

Email:

with a copy to (which copy alone shall not constitute notice):

Shearman & Sterling LLP

1460 El Camino Real, Floor 2

Menlo Park, CA 94025

Attn: Christopher Forrester

Phone:

Email:

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or such other address, email address or facsimile number as such party may hereafter specify by like notice to the other parties hereto. All such notices, requests and other communications shall be deemed received on the date of actual receipt by the recipient thereof if received prior to 5:00 p.m. local time in the place of receipt and such day is a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding Business Day in the place of receipt.

3.8 Severability. If any term, condition or other provision of this Agreement is determined by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced by any Rule of Law or public policy, all other terms, provisions and conditions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that any term, condition or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible to the fullest extent permitted by applicable Law.

3.9 Interpretation. (a) When a reference is made in this Agreement to an Article, a Section, Exhibit or Schedule, such reference shall be to an Article of, a Section of, or an Exhibit or Schedule to this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement unless the context requires otherwise. The words “date hereof” when used in this Agreement shall refer to the date of this Agreement. The terms “or,” “any” and “either” are not exclusive. The word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” The words “made available to the Holders” and words of similar import refer to documents (A) posted to a diligence website by or on behalf of the Company and made available to the Holders or their respective Representatives or (B) delivered in Person or electronically to the Holders or their respective Representatives. All terms defined in this Agreement shall have the defined meanings when used in any document made or delivered pursuant hereto unless otherwise defined therein. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term. Any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein. Unless otherwise specifically indicated, all references to “dollars” or “$” shall refer to the lawful money of the United States. References to a Person are also to its permitted assigns and successors. When calculating the period of time between which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded (unless otherwise required by Law, if the last day of such period is not a Business Day, the period in question shall end on the next succeeding Business Day).

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(b) The parties hereto have participated jointly in the negotiation and drafting of this Agreement, and in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as jointly drafted by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party hereto by virtue of the authorship of any provision of this Agreement.

[Remainder of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first above written.

DESPEGAR.COM, CORP.
By:	/s/ Alberto López Gaffney
Name: Alberto López Gaffney
Title: Chief Financial Officer

[Signature Page to Registration Rights Agreement (Waha)]

WAHA LATAM INVESTMENTS LIMITED
By:	/s/ Aseem Gupta
Name: Aseem Gupta
Title: Director

[Signature Page to Shelf Registration Rights Agreement]

EX-4.7

Exhibit 4.7

Execution Version

THE OFFER AND SALE OF THE SECURITIES (INCLUDING THE COMMON SHARES WHICH MAY BE PURCHASED HEREUNDER) REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE SECURITIES MAY NOT UNDER ANY CIRCUMSTANCES BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY OTHER APPLICABLE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS.

THE SECURITIES (INCLUDING THE COMMON SHARES WHICH MAY BE PURCHASED HEREUNDER) REPRESENTED BY THIS INSTRUMENT ARE SUBJECT TO TRANSFER AND OTHER RESTRICTIONS SET FORTH IN AN INVESTMENT AGREEMENT, DATED AS OF AUGUST 20, 2020, COPIES OF WHICH ARE ON FILE WITH THE SECRETARY OF THE COMPANY.

Issue Date: September 18, 2020

CERTIFICATE NO. PW-1

DESPEGAR.COM, CORP.

Ordinary Shares Purchase Warrant (Penny Warrant)

Despegar.com, Corp., a BVI business company incorporated in the British Virgin Islands with company number 1936519 (the “Company”), for value received, hereby certifies that LCLA Daylight LP, a Delaware limited partnership (the “Holder”), subject to the terms and conditions hereof, shall be entitled to purchase from the Company, at any time and from time to time after the Issue Date set forth above and on or prior to the close of business on September 18, 2030 (the “Expiration Date”), 11,000,000 fully paid and non-assessable ordinary shares (the “Warrant Shares”), without par value, of the Company (the “Common Shares”), at a price per share equal to the Exercise Price. The number of Warrant Shares and the Exercise Price are subject to adjustment as provided herein, and all references to “Common Shares” and “Exercise Price” herein shall be deemed to include any such adjustment or series of adjustments.

This warrant (this “Warrant”) is being issued by the Company to the Holder in connection with the transactions contemplated by that certain Investment Agreement, dated as of August 20, 2020, between the Company and LCLA Daylight LP (as amended or modified from time to time, the “Investment Agreement”). The following terms used herein shall have the meanings set forth below when used in this Warrant:

“Adjustment Event” has the meaning set forth in Section 6.3.

“Affiliate” means, as to any Person, any other Person that, directly or indirectly, controls, or is controlled by, or is under common control with, such Person; provided, however, that (i) the Company and its Affiliates shall not be deemed to be Affiliates of any Holder or any of its Affiliates, and (ii) portfolio companies of any Holder or any Affiliate thereof shall not be deemed to be Affiliates of any Holder solely to the extent that any such portfolio company has not received any Confidential Information (as defined in the Confidentiality Agreement) pertaining to the Company from any holder (provided that

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no Person will be deemed to be in receipt of any Confidential Information solely because any such person serves as a director, officer or employee of such portfolio company). For this purpose, “control” (including, with its correlative meanings, “controlled by” and “under common control with”) shall mean the possession, directly or indirectly, of the power to direct or cause the direction of management or policies of a Person, whether through the ownership of securities or partnership or other ownership interests, by contract or otherwise.

“beneficially own” and similar terms have the meaning of Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934.

“Bloomberg” means Bloomberg Financial Markets.

“Board” means the board of directors of the Company.

“Business Day” means any day except a Saturday, a Sunday or other day on which the Securities and Exchange Commission or banks in the City of New York or in the British Virgin Islands are authorized or required by law to be closed.

“Cash Exercise” has the meaning set forth in Section 1.2.1.

“Cashless Exercise” has the meaning set forth in Section 1.2.2.

“Code” means the U.S. Internal Revenue Code of 1986, as amended.

“Common Shares” has the meaning set forth in the first paragraph of this Warrant.

“Confidentiality Agreement” means the non-disclosure agreement dated May 5, 2020 by and between Catterton Latin America Management Co. and the Company.

“VWAP” means, as of any date of determination, the average per share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page “DESP <equity> AQR” (or its equivalent successor if such Bloomberg page is not available) in respect of the period from the open of trading on the relevant Trading Day until the close of trading on such Trading Day (or if such volume-weighted average price is unavailable, the market value of one share of Common Shares on such Trading Day reasonably determined, using a volume-weighted average method, by an Independent Financial Expert appointed (and compensated by the Company) for such purpose). The VWAP will be determined without regard to after-hours trading or any other trading outside of the regular trading session trading hours.

“Exercise Price” means $0.01 per share, subject to all adjustments from time to time pursuant to the provisions of Section 6.

“Governmental Authority” means any government, court, regulatory or administrative agency, commission, arbitrator or authority or other legislative, executive or judicial governmental entity (in each case including any self-regulatory organization), whether federal, state or local, domestic, foreign or multinational.

“Independent Financial Expert” means a nationally recognized accounting, investment banking or consultant firm, which firm does not have a material financial interest or other material economic relationship with either the Company or any of its Affiliates or the Holder or any of its Affiliates that is, in the good faith judgment of the Board, qualified to perform the task for which it has been engaged.

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“Liquidity Event” has the meaning set forth in Section 7.

“Market Price” means, as of any date, (i) so long as the Common Shares continue to be traded on the NYSE on such date, the last reported sale price of the Common Shares on the Trading Day immediately prior to such date on the NYSE and (ii) if the Common Shares are not traded on the NYSE on such date, the closing sale price of the Common Shares on the Trading Day immediately prior to such date as reported in the composite transactions for the principal securities exchange or market on which the Common Shares are so listed or traded, or, if no closing sale price is reported, the last reported sale price on the principal securities exchange on which the Common Shares are so listed or traded on the Trading Day immediately prior to such date, or if the Common Shares are not so listed or traded on a securities exchange or market, the last closing bid price of the Common Shares in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if that bid price is not available, the market price of the Common Shares on the Trading Day immediately prior to such date as determined by an Independent Financial Expert appointed (and compensated by the Company) for such purpose, using one or more valuation methods that the Independent Financial Expert in its best professional judgment determines to be most appropriate, assuming such securities are fully distributed and are to be sold in an arm’s-length transaction and there was no compulsion on the part of any party to such sale to buy or sell and taking into account all relevant factors.

All references herein to the “closing sale price” and “last reported sale price” of the Common Shares on the NYSE shall be such closing sale price and last reported sale price as reflected on the website of the NYSE (www.nyse.com).

“Memorandum and Articles” means the amended and restated memorandum and articles of association of the Company, as amended, supplemented or modified from time to time;

“NYSE” means any national stock exchanges now or hereinafter maintained by the New York Stock Exchange.

“Options” means any warrants (including this Warrant) or other rights or options to subscribe for or purchase Common Shares.

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

“Public Sale” shall mean (i) an underwritten public offering pursuant to an effective registration statement (other than a registration statement on Form F-4, Form S-8 or any successor or other forms promulgated for similar purposes) filed under the Securities Act or (ii) a “brokers’ transaction” (as defined in Rule 144).

“Registration Rights Agreement” means the registration rights agreement, dated as of September 18, 2020, among the Company and LCLA Daylight LP, as amended or modified from time to time.

“Securities Act” means the Securities Act of 1933, as amended, or any successor statute, and the rules and regulations promulgated thereunder.

“Trading Day” means a day on which trading in the Common Shares (or other applicable security) generally occurs on the principal exchange or market on which the Common Shares (or other applicable security) are then listed or traded; provided that if the Common Shares (or other applicable security) are not so listed or traded, “Trading Day” means a Business Day.

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1. Exercise of Warrants.

1.1 General Exercise. This Warrant may be exercised in whole or in part by the Holder at any time and from time to time after the Issue Date and on or prior to the close of business on the Expiration Date, and in the event that this Warrant has not been exercised in full as of the last Business Day prior to the Expiration Date, the purchase rights represented by this Warrant shall be deemed to be automatically exercised in full by the Holder pursuant to Section 1.2.2 as of such last Business Day. Any exercise of this Warrant may be conditioned upon the occurrence of (a) a Public Sale of the Warrant Shares, (b) the consummation of a transfer of the Warrant Shares in a transaction not constituting a Public Sale pursuant to an applicable exemption under the Securities Act (in each of clauses (i) and (ii), in accordance with the terms hereof and the Investment Agreement, as applicable), or (c) any event described in Section 8.2(iii). Such conditional exercise shall be deemed revoked if such event or transaction does not occur on the date, or within the dates, specified in the applicable notice provided by or on behalf of the Company pursuant to Section 8 (if such a notice was provided).

1.2 Exercise.

1.2.1 Exercise for Cash. This Warrant may be exercised (“Cash Exercise”) by delivering this Warrant to the Company, or at the office of its stock transfer agent, if any, accompanied by (i) the “Purchase Form” attached as Exhibit A-1 hereto duly completed and executed on behalf of the Holder and (ii) a payment to the Company in the amount equal to the Exercise Price multiplied by the number of Warrant Shares in respect of which this Warrant is then exercised, plus all taxes required to be paid by the Holder, if any, pursuant to Section 2, by wire transfer of immediately available funds to an account designated by the Company.

1.2.2 Cashless Exercise. This Warrant may be exercised (“Cashless Exercise”) by electing on one or more occasions, at any time prior to Expiration Date, to receive Warrant Shares issuable in accordance with this Warrant (or the portion thereof being cancelled) by surrender of this Warrant to the Company together with the “Cashless Exercise Form” attached as Exhibit A-2 hereto duly completed and executed on behalf of the Holder.

1.3 Issuance of Warrant Shares; Authorization.

1.3.1 In the event of a Cash Exercise, subject to Section 9.1, upon surrender of this Warrant and full compliance with each of the other requirements in Section 1.2.1, the Company shall, promptly, and in any event, within 2 Trading Days issue the number of Warrant Shares issuable upon the Cash Exercise in and to such name or names as the Holder may designate and deliver to the Holder (i) if requested, a share certificate or certificates for such Warrant Shares, and (ii) such other evidence as the Holder reasonably requires to evidence the issuance of the Warrant Shares to the Holder (or any nominee, broker or depositary through which the Holder will own the Warrant Shares) as a matter of the laws of the British Virgin Islands (including, without limitation, a certified copy of an extract of the register of members of the Company duly reflecting the issuance of such Warrant Shares).

1.3.2 In the event of a Cashless Exercise, subject to Section 9.1, upon surrender of this Warrant and full compliance with the other requirements in Section 1.2.2, the Company shall promptly, and in any event, within 2 Trading Days issue the number of Warrant Shares issuable upon the Cashless Exercise in and to such name or names as the Holder may designate (subject to the transfer restrictions in the Investment Agreement) and deliver to the Holder (i) if requested, a share certificate or certificates for such Warrant Shares and (ii) such other evidence as the Holder reasonably requires to evidence the issuance of the Warrant Shares to the Holder (or any nominee, broker or depositary through which the Holder will own the Warrant Shares) as a matter of the laws of the British Virgin Islands (including, without limitation, a certified copy of an extract of the register of members of the Company). Such number of Warrant Shares to be issued pursuant to this Section 1.3.2 shall be computed using the following formula:

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	X =	Y(A-B)
		A
Where:	X = the number of the Warrant Shares to be issued to the Holder.
	Y = the number of the Warrant Shares with respect to which the Warrant is exercised.
	A = the Market Price of one Common Share on the date of determination.
	B = the Exercise Price (as adjusted to the date of such calculation).

The date of determination for purposes of this Section 1.3.2 shall be the date the Holder delivers the Cashless Exercise Form.

1.3.3 Such Warrant Shares shall not be deemed to have been issued, and any person so designated to be named therein shall not be deemed to have become or have any rights of a holder of record of such Warrant Shares, until all requirements set forth in Section 1.2 have been fully met by the Holder.

1.3.4 The certificate(s) (or book entry shares) representing the Warrant Shares acquired upon the exercise of this Warrant shall bear the restrictive legend substantially in the form set forth on Exhibit B hereto; provided that, upon the reasonable request of the Holder, at any time, and from time to time, when such legend is no longer required under the Securities Act or applicable state laws, the Company shall promptly remove such legend from any certificate (or book entry share) representing the Warrant Shares (or issue one or more new certificates or book entry shares representing such Warrant Shares, which certificate(s) or book entry share(s) shall not contain a legend).

1.3.5 The Company hereby represents and warrants that this Warrant, and any Warrant issued in substitution or replacement of this Warrant shall be, upon issuance, duly authorized and validly issued, and any Common Shares issued upon the exercise of this Warrant in accordance with the provisions of Sections 1.2 will be duly authorized and validly issued, fully paid and non-assessable and free from all taxes, liens, encumbrances and charges (other than liens or charges created by the Holder or taxes in respect of any transfer of such Common Shares occurring contemporaneously herewith to a person other than the Holder). The Company agrees that the Warrant Shares so issued will be deemed to have been issued to the Holder (and the Holder shall be the legal and beneficial owner thereof) as of the close of business on the date on which this Warrant and payment of the Exercise Price are delivered to the Company in accordance with the terms of this Warrant, notwithstanding that the register of members of the Company may then be closed or certificates or book entry shares representing such Warrant Shares may not be actually delivered on such date.

1.3.6 The Company will deliver a certified copy of director resolutions of the Company approving any actions taken by the Company pursuant to this Section 1.3, including the issue of the Warrant Shares.

1.4 Full or Partial Exercise. This Warrant shall be exercisable, at the election of the Holder, either in full or in part and, in the event that this Warrant is exercised in respect of fewer than all of the Warrant Shares issuable on such exercise at any time prior to the Expiration Date, the Company shall promptly, and in no event later than two Trading Days after any exercise, issue a new Warrant, in a form substantially identical hereto, representing the remaining number of Warrant Shares after such exercise in the name of the Holder, upon the request of such Holder and against delivery of this Warrant.

1.5 Vesting. This Warrant shall vest and become exercisable on the Issue Date.

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2. Payment of Taxes. Issuance of the Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of the Warrant Shares, including any certificates relating thereto, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names (provided that the Holder has complied with the restrictions on transfer set forth herein and in the Investment Agreement) as may be directed by the Holder; provided that in the event the Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by a properly executed assignment in form attached as Exhibit C hereto; and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.

3. Mutilated, Missing or Lost Warrant. In the event that this Warrant shall be mutilated, lost, stolen or destroyed, the Company shall issue and countersign, in exchange and substitution for and upon cancellation of the mutilated Warrant, or in lieu of and substitution for its loss, theft or destruction, a new Warrant with identical terms, representing an equivalent number of Warrant Shares and dated the same date as this Warrant that was mutilated, lost, stolen or destroyed, but only upon receipt of evidence and indemnity or other security reasonably satisfactory to the Company of the loss, theft or destruction of this Warrant.

4. Reservation of Warrant Shares.

4.1 At all times prior to the Expiration Date, the Company shall at all times reserve and keep available out of its authorized but unissued Common Shares solely for the purpose of issuance upon the exercise of this Warrant, a number of Common Shares equal to the aggregate Warrant Shares issuable upon the exercise of this Warrant. The Company shall use commercially reasonable efforts to take all such actions as may be necessary to assure that all such Common Shares may be so issued without violating the Company’s governing documents, any agreements to which the Company is a party, any requirements of any national securities exchange upon which Common Shares may be listed or any applicable laws. The Company shall not take any action which would cause the number of authorized but unissued Common Shares to be less than the number of such shares required to be reserved hereunder for issuance upon exercise of the Warrants. The Company shall not amend or modify any provision of the Memorandum and Articles in any manner that would materially and adversely affect the powers, preferences or relative participating, optional or other special rights of the Common Shares in a manner which would disproportionately and adversely affect the rights of the Holder relative to other holders of Common Shares.

4.2 The Company covenants that it will take such actions as may be necessary or appropriate in order that all Warrant Shares issued upon exercise of this Warrant will, upon issuance in accordance with the terms of this Warrant, be fully paid and non-assessable, and free from any and all (i) security interests created by or imposed upon the Company and (ii) taxes, liens and charges with respect to the issuance thereof (other than liens or charges created by the Holder or taxes in respect of any transfer of such Common Shares occurring contemporaneously therewith to a person other than the Holder). If at any time prior to the Expiration Date the number and kind of authorized but unissued shares of the Company shall not be sufficient to permit exercise in full of this Warrant, the Company will as promptly as practicable take such corporate action necessary to increase its authorized but unissued shares to such number of shares as shall be sufficient for such purposes. Without limiting the generality of the foregoing, the Company will not increase the stated or par value per share, if any, of the Common Shares above the Exercise Price per share in effect immediately prior to such increase in stated or par value. The Company shall procure the listing of any Warrant Shares issued upon exercise of this

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Warrant on the principal securities exchange on which the Common Shares are then listed or traded. The Company shall not, by amendment of the Memorandum and Articles, or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed by it hereunder, but shall at all times in good faith cooperate in the carrying out of all the provisions of this Warrant.

5. Fractional Shares. No fractional Warrant Shares, or scrip for any such fractional Warrant Shares, shall be issued upon the exercise of this Warrant. If any fraction of a share of Common Shares would, except for the provisions of this Section 5, be issuable on the exercise of any Warrant, the Company may, at its election, either make a cash payment equal to the Market Price of the Common Shares less the Exercise Price for such fractional share or round up to the next whole share.

6. Anti-dilution Adjustments and Other Rights. The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant shall be subject to adjustment from time to time as follows:

6.1 Adjustment to Exercise Price. Upon any adjustment to the number of Warrant Shares for which this Warrant is exercisable pursuant to Sections 6.2. 6.3, 6.4, 6.5 and 6.6, the Exercise Price shall immediately be adjusted to equal the quotient obtained by dividing (i) the aggregate Exercise Price of the maximum number of Warrant Shares for which this Warrant was exercisable in each case immediately prior to such adjustment by (ii) the number of Warrant Shares for which this Warrant is exercisable immediately after such adjustment; provided, however, that the Exercise Price with respect to the new number of Warrant Shares for which this Warrant is exercisable resulting from any such adjustment shall not be less than $0.01 per share.

6.2 Share Dividend or Division. If the Company issues Common Shares as a dividend or distribution on all or substantially all Common Shares, or effects a division or combination, or shall increase or decrease the number of Common Shares outstanding by reclassification of its Common Shares, then in each case, the number of Warrant Shares for which this Warrant is exercisable will be adjusted based on the following formula:

		NS’ = NS0 x	OS’
			OS0
where,
NS’	=	the number of Warrant Shares for which this Warrant is exercisable in effect immediately after such adjustment
NS0	=	the number of Warrant Shares for which this Warrant is exercisable in effect immediately prior to such adjustment
OS’	=	the number of Common Shares outstanding immediately after the close of business on the record date for such dividend or distribution or the effective date of such division or combination
OS0	=	the number of Common Shares outstanding immediately prior to the close of business on the record date for such dividend or distribution or the effective date of such subdivision, share split, share combination or reverse splitting.

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Such adjustment shall become effective immediately prior to 9:00 a.m., New York City time, on the Business Day following the record date fixed for such dividend distribution or the effective date of such division or combination. If any such event is announced or declared but does not occur, the number of Warrant Shares for which this Warrant is exercisable shall again be adjusted to the number of Warrant Shares for which this Warrant is exercisable that would then be in effect if such event had not been declared (and the Exercise Price also correspondingly readjusted).

6.3 Rights or Warrants. If the Company issues to all or substantially all holders of its Common Shares, any rights or warrants entitling them to subscribe for or purchase Common Shares, for a period expiring 45 days or less from the date of issuance thereof and subject to the last paragraph of this Section 6.3, at a price per share less than the Market Price per share of Common Shares on the Business Day immediately preceding the date of announcement of such issuance, the number of Warrant Shares for which this Warrant is exercisable will be adjusted based on the following formula:

		NS’ = NS0 x	OS0 + X
			OS0 +Y
where,
NS’	=	the number of Warrant Shares for which this Warrant is exercisable in effect immediately after such adjustment
NS0	=	the number of Warrant Shares for which this Warrant is exercisable in effect immediately prior to such adjustment
OS0	=	the number of Common Shares outstanding immediately prior to the close of business on the date of announcement of such issuance
X	=	the total number of Common Shares issuable pursuant to such rights (or warrants)
Y	=	the number of Common Shares equal to the aggregate price payable to exercise such rights (or warrants) divided by the Market Price per Common Share on the Business Day immediately preceding the date of announcement.

Such adjustment shall be successively made whenever any such rights or warrants are issued and shall become effective immediately prior to 9:00 a.m., New York City time, on the Business Day following the record date for such issuance. To the extent that Common Shares are not delivered upon or before the expiration of such rights or warrants, the number of Warrant Shares for which this Warrant is exercisable shall again be adjusted to the number of Common Shares for which this Warrant is exercisable that would then be in effect had the adjustments made upon the issuance of such rights or warrants been made on the basis of delivery of only the number of Common Shares actually delivered (and the Exercise Price also correspondingly readjusted). If such rights or warrants are not so issued, the number of Warrant Shares for which this Warrant is exercisable shall again be adjusted to be the number of Warrant Shares for which this Warrant is exercisable that would then be in effect if such date fixed for the determination of shareholders entitled to receive such rights or warrants had not been fixed (and the Exercise Price also correspondingly readjusted). No adjustment shall be made pursuant to this Section 6.3 which shall have the effect of decreasing the number of Warrant Shares issuable upon exercise of this

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Warrant. In determining whether any rights or warrants entitle the holders of the Company’s Common Shares to subscribe for or purchase Common Shares at less than such Market Price, and in determining the aggregate price payable to exercise such rights or warrants, there shall be taken into account any consideration received by the Company for such rights or warrants and any amount payable on exercise thereof, the value of such consideration, if other than cash, to be determined in good faith by the Board of Directors.

In the event the Company adopts or implements a shareholder rights agreement (a “Shareholder Rights Plan”) pursuant to which rights (“Rights”) are distributed to the holders of Common Shares of the Company and such Shareholder Rights Plan provides that each Warrant Share issued upon exercise of this Warrant at any time prior to the distribution of separate certificates (or book entry Rights) representing such Rights will be entitled to receive such Rights, then there shall not be any adjustment to the exercise right or Exercise Price at any time prior to the distribution of separate certificates (or book entry Rights) representing such Rights. If, however, prior to any exercise of this Warrant, the Rights have separated from the Common Shares, the exercise right and Exercise Price shall be adjusted at the time of separation as described in Section 6.3(a); provided that no adjustment shall be made pursuant to this Section 6 in respect of such Rights with respect to any Holder which is, or is an “affiliate” or “associate” of, an “acquiring person” under such Shareholder Rights Plan or with respect to any direct or indirect transferee of such Holder who receives this Warrant in such transfer after the time such Holder becomes, or its affiliate or associate becomes, such an “acquiring person”. To the extent such Rights are not exercised prior to their expiration, termination or redemption, the number of Warrant Shares for which this Warrant is exercisable shall again be adjusted to be the number of Warrant Shares for which this Warrant is exercisable that would then be in effect if such prior adjustment had been made on the basis of the issuance of, and the receipt of the exercise price with respect to, only the number of Common Shares actually issued pursuant to such Rights (and the Exercise Price also correspondingly readjusted).

6.4 Other Distributions. If the Company fixes a record date for the making of any distribution of shares, other securities, evidences of indebtedness or other assets or property of the Company to all or substantially all holders of the Common Shares, excluding:

(i) dividends or distributions and rights or warrants referred to in Section 6.2 or Section 6.3;

(ii) dividends or distributions paid exclusively in cash referred to in Section 6.5; and

(iii) a Spin-Off (as defined below);

then the number of Warrant Shares for which this Warrant is exercisable will be adjusted based on the following formula:

		NS’ = NS0 x	SP0
			SP0 - FMV
where,
NS’	=	the number of Warrant Shares for which this Warrant is exercisable in effect immediately after such adjustment

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NS0	=	the number of Warrant Shares for which this Warrant is exercisable in effect immediately prior to such adjustment
SP0	=	the Market Price per Common Share on the last Trading Day immediately preceding the first date on which the Common Shares trade regular way without the right to receive such distribution
FMV	=	the fair market value (as determined in good faith by the Board) of the shares of capital stock, other securities, evidences of indebtedness, assets or property distributed with respect to each outstanding Common Share on the record date for such distribution; provided that if FMV is equal to or greater than SP0, then in lieu of the foregoing adjustment, the Company shall distribute to the Holder on the date the applicable shares, other securities, evidences of indebtedness or other assets or property are distributed to holders of Common Shares, but without requiring the Holder to exercise this Warrant, the amount of shares, other securities, evidences of indebtedness or other assets or property that the Holder would have received had the Holder exercised this Warrant prior to the date of such distribution.

Such adjustment shall become effective immediately prior to 9:00 a.m., New York City time, on the Business Day following the record date fixed for the determination of shareholders entitled to receive such distribution. Such adjustment shall be made successively whenever such a record date is fixed with respect to a subsequent event.

With respect to an adjustment pursuant to this Section 6.4 where there has been a payment of a dividend or other distribution on the Common Shares or shares of capital stock of any class or series, or similar equity interest, of or relating to a subsidiary or other business unit, whether by means of a spin-off, split-off, redemption, reclassification, exchange, share dividend, share distribution, rights offering or similar transaction (a “Spin-Off”), the number of Warrant Shares for which this Warrant is exercisable in effect immediately before 5:00 p.m., New York City time, on the record date fixed for determination of shareholders entitled to receive the distribution will be increased based on the following formula, rather than the formula set forth in the first paragraph of this Section 6.4:

		NS’ = NS0 x	FMV0 + MP0
			MP0
where,
NS’	=	the number of Warrant Shares for which this Warrant is exercisable in effect immediately after such distribution
NS0	=	the number of Warrant Shares for which this Warrant is exercisable in effect immediately prior to such distribution
FMV0	=	the average of the Market Prices of the capital stock or similar equity interest distributed to holders of Common Shares applicable to one share of such stock or equity interest over the first ten consecutive Trading Day period commencing with, and including, the effective date of the Spin-Off
MP0	=	the average of the Market Price of the Common Shares over the first ten consecutive Trading Day period commencing on, and including, the effective date of the Spin-Off.

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Such adjustment shall occur immediately following 5:00 p.m., New York City time, on the tenth consecutive Trading Day from, and including, the effective date of the Spin-Off. If an adjustment is required under this Section 6.4 with respect to a Spin-Off, delivery of any additional Common Shares that may be deliverable upon exercise of this Warrant as a result of an adjustment required under this Section 6.4 for a Spin-Off shall be delayed to the extent necessary in order to complete the applicable calculations provided for in this Section 6.4.

6.5 Cash Dividend. If the Company makes any cash dividend (excluding any cash distributions in connection with the Company’s liquidation, dissolution or winding up) or distribution during any quarterly fiscal period to all or substantially all holders of Common Shares, the number of Common Shares for which this Warrant is exercisable will be adjusted based on the following formula:

		NS’ = NS0 x	SP0
			SP0 - C
where,
NS’	=	the number of Warrant Shares for which this Warrant is exercisable in effect immediately after the record date for such dividend or distribution
NS0	=	the number of Warrant Shares for which this Warrant is exercisable in effect immediately prior to the record date for such dividend or distribution
SP0	=	the Market Price per Common Share on the last Trading Day immediately preceding the first date on which the Common Shares trade regular way without the right to receive such dividend or distribution
C	=	the amount in cash per share the Company distributes to holders of Common Shares; provided, that if C is equal to or greater than SP0, then in lieu of the foregoing adjustment, the Company shall pay to the Holder on the date the applicable cash dividend or distribution is made to holders of Common Shares, but without requiring the Holder to exercise this Warrant, the amount of cash the Holder would have received if the Holder exercised this Warrant prior to the record date for such dividend or distribution.

Such adjustment shall become effective immediately after 5:00 p.m., New York City time, on the record date for such dividend or distribution. If any cash dividend or distribution is declared but not so paid, the number of Warrant Shares for which this Warrant is exercisable shall again be adjusted to the number of Warrant Shares for which this Warrant is exercisable that would then be in effect if such dividend or distribution had not been declared (and the Exercise Price also correspondingly readjusted). No adjustment shall be made pursuant to this Section 6.5 which shall have the effect of decreasing the number of Warrant Shares issuable upon exercise of this Warrant.

6.6 Tender or Exchange Offer: The Company or one or more of its subsidiaries purchases Common Shares pursuant to a tender offer or exchange offer (other than an exchange offer that is subject to Section 6.4 by the Company or a subsidiary of the Company for all or any portion of the Common Shares, or otherwise acquires Common Shares (except (1) in an open market purchase in

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compliance with Rule 10b-18 promulgated under the Exchange Act, (2) through an “accelerated share repurchase” on customary terms or (3) in connection with tax withholding upon vesting or settlement of options, restricted stock units, performance share units or other similar equity awards or upon forfeiture or cashless exercise of options or other equity awards) (a “Covered Repurchase”), if the cash and value of any other consideration included in the payment per Common Share validly tendered, exchanged or otherwise acquired through a Covered Repurchase exceeds the arithmetic average of the VWAP per Common Share for each of the ten (10) consecutive full Trading Days commencing on, and including, the Trading Day next succeeding the last day on which tenders or exchanges may be made pursuant to such tender or exchange offer (as it may be amended) or Common Shares are otherwise acquired through a Covered Repurchase (the “Offer Expiration Date”), in which the number of Common Shares for which this Warrant is exercisable will be adjusted based on the following formula:

		NS’ = NS0 x	FMV + (SP1 x OS1)
			(SP1 x OS0)
NS’	=	the number of Warrant Shares for which this Warrant is exercisable in effect immediately after the close of business on the Offer Expiration Date
NS0	=	the number of Warrant Shares for which this Warrant is exercisable in effect immediately prior to the close of business on the Offer Expiration Date
FMV	=	the Fair Market Value, on the Offer Expiration Date, of all cash and any other consideration paid or payable for all shares validly tendered or exchanged and not withdrawn, or otherwise acquired through a Covered Repurchase, as of the Offer Expiration Date
OS0	=	the number of Common Shares outstanding immediately prior to the last time tenders or exchanges may be made pursuant to such tender or exchange offer (including the shares to be purchased in such tender or exchange offer) or shares are otherwise acquired through a Covered Repurchase
OS1	=	the number of Common Shares outstanding immediately after the last time tenders or exchanges may be made pursuant to such tender or exchange offer (after giving effect to the purchase of shares in such tender or exchange offer) or shares are otherwise acquired through a Covered Repurchase
SP1	=	the arithmetic average of the VWAP per Common Share for each of the ten (10) consecutive full Trading Days commencing on, and including, the Trading Day next succeeding the Offer Expiration Date

Such adjustment shall become effective immediately after 5:00 p.m., New York City time, on the Offer Expiration Date. If an adjustment is required under this Section 6.6, delivery of any additional Common Shares that may be deliverable upon conversion as a result of an adjustment required under this Section 6.6 shall be delayed to the extent necessary in order to complete the calculations provided for in this Section 6.6.

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In the event that the Company or any of its subsidiaries is obligated to purchase Common Shares pursuant to any such tender offer or other commitment to acquire Common Shares through a Covered Repurchase but is permanently prevented by applicable law from effecting any such purchases, or all such purchases are rescinded, then the number of Warrant Shares for which this Warrant is exercisable shall be readjusted to be the number of Warrant Shares that would have been then in effect if such tender offer, exchange offer or Covered Repurchase had not been made.

6.7 No Adjustment if Participating. Notwithstanding the foregoing provisions of this Section 6, no adjustment shall be made thereunder, nor shall an adjustment be made to the ability of a Holder to exercise, for any distribution described therein if the Holder will otherwise participate in the distribution with respect to its Warrant Shares without exercise of this Warrant (without giving effect to any separate exercise of preemptive rights).

6.8 Income Tax Adjustment. The Company may (but is not required to) make such decreases in the Exercise Price and increases in the number of Warrant Shares for which this Warrant is exercisable, in addition to those required by Sections 6.1 through 6.6, as the Board determines is consistent with the principles of Treasury Regulations Section 1.305-3 and considers to be advisable to avoid or diminish any income tax to holders of Common Shares or rights to purchase Common Shares in connection with a dividend or distribution of shares (or rights to acquire shares) or any similar event treated as such for income tax purposes.

6.9 No Adjustment. No adjustment to the Exercise Price or the number of Warrant Shares for which this Warrant is exercisable need be made:

6.9.1 upon the issuance of any Common Shares pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on securities of the Company and the investment of additional optional amounts in Common Shares under any plan;

6.9.2 upon the issuance of any Common Shares or options or rights to purchase Common Shares pursuant to any present or future employee, director or consultant benefit plan or program of or assumed by the Company or any of its Subsidiaries;

6.9.3 upon the issuance of any Common Shares pursuant to any option, warrant, right, or exercisable, exchangeable or convertible security not described in Section 6.2 and outstanding as of the date this Warrant was first issued or which has otherwise already given rise to an adjustment hereunder at the time such option, warrant right, or exercise, exchangeable or convertible security was issued; or

6.9.4 for a change in the par value of the Common Shares, if any.

6.10 Calculations. All adjustments made to the Exercise Price pursuant to this Section 6 shall be calculated to the nearest cent ($0.01), and all adjustments made to the Warrant Shares issuable upon exercise of each Warrant pursuant to this Section 6 shall be calculated to the nearest one-ten thousandth of a Warrant Share (0.0001). Except as described in this Section 6, the Company will not adjust the Exercise Price and the number of Warrant Shares for which this Warrant is exercisable.

No adjustments of the Exercise Price or the number of Warrant Shares issuable upon the exercise of this Warrant that would otherwise be required shall be made unless and until such adjustment either by itself or with other adjustments not previously made increases or decreases by at least 0.1% the Exercise Price or the number of Warrant Shares issuable upon the exercise of this Warrant immediately prior to the making of such adjustment. Any adjustment representing a change of less than such minimum amount shall be carried forward and made as soon as such adjustment, together with other adjustments required by this Section 6 and not previously made, would result in a minimum adjustment.

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6.11 Adjustment Event. In any case in which this Section 6 provides that an adjustment shall become effective immediately after (i) a record date or record date for an event, (ii) the date fixed for the determination of shareholders entitled to receive a dividend or distribution pursuant to this Section 6 or (iii) a date fixed for the determination of shareholders entitled to receive rights or warrants pursuant to this Section 6 (each a “Determination Date”), the Company may elect to defer until the occurrence of the applicable Adjustment Event (x) issuing to the Holder of any Warrant exercised after such Determination Date and before the occurrence of such Adjustment Event, the additional Common Shares or other securities issuable upon such exercise by reason of the adjustment required by such Adjustment Event over and above the Common Shares issuable upon such exercise before giving effect to such adjustment and (y) paying to such holder any amount in cash in lieu of any fractional share pursuant to Section 5. For purposes of this Section 6, the term “Adjustment Event” shall mean:

(A) in any case referred to in clause (i) hereof, the occurrence of such event,

(B) in any case referred to in clause (ii) hereof, the date any such dividend or distribution is paid or made, and

(C) in any case referred to in clause (iii) hereof, the date of expiration of such rights or warrants.

6.12 Number of Shares Outstanding. For purposes of this Section 6, the number of Common Shares at any time outstanding shall not include shares held as treasury shares by the Company but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of Common Shares.

6.13 Successive Adjustments. Successive adjustments in the Exercise Price and the number of Warrant Shares for which this Warrant is exercisable shall be made, without duplication, whenever any event specified in this Section 6 shall occur.

6.14 Voluntary Adjustment by the Company. In addition to any adjustments required pursuant to this Section 6, the Company may at its option, at any time during the term of this Warrant, reduce the then current Exercise Price or increase the number of Warrant Shares for which this Warrant may be exercised to any amount deemed appropriate by the Board; provided, however, that if the Company elects to make such adjustment, such adjustment will remain in effect for at least a 7-day period, after which time the Company may, at its option, reinstate the Exercise Price or number of Warrant Shares in effect prior to such reduction, subject to any interim adjustments pursuant to this Section 6.

7. Liquidity Event. Any Change of Control (as defined in Schedule 1 to the Memorandum and Articles) or any other recapitalization, reorganization, reclassification, consolidation, merger, sale of all or substantially all of the Company’s assets or other transaction, which, in each case, is effected in such a way that all of the holders of Common Shares are entitled to receive (either directly or upon subsequent related dividend, distribution or liquidation) cash, stock, securities or assets (or a combination of the foregoing) with respect to or in exchange for Common Shares (other than a transaction that triggers an adjustment pursuant to Section 6) is referred to herein (together with any such Change of Control) as a “Liquidity Event.” In connection with any Liquidity Event, each Holder shall have the right to acquire and receive, upon exercise of any Warrants, such cash, shares, securities or other assets or property as would have been issued or payable in such Liquidity Event (as if such Holder had exercised such Warrant immediately prior to such Liquidity Event) with respect to or in exchange, as applicable, for the number of Warrant Shares that would have been issued upon exercise of such Warrants, if such Warrants had been exercised immediately prior to the occurrence of such Liquidity Event, and in any such case, if applicable, the provisions set forth herein with respect to the rights and interests thereafter of the Holder

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shall be appropriately adjusted so as to be applicable, as nearly as may reasonably be, to the Holder’s right to exercise this Warrant in exchange for any shares, securities or other assets or property pursuant to this paragraph. In determining the kind and amount of shares, securities or other assets or property receivable upon exercise of this Warrant upon and following adjustment pursuant to this Section 7, if the holders of Common Shares have the right to elect the kind or amount of consideration receivable upon consummation of such Liquidity Event, then the kind and amount of shares, securities or other assets or property receivable upon exercise of this Warrant shall be in the same proportion as the weighted average of the types and amounts of consideration received by the holders of Common Shares. The Company shall not effect any Liquidity Event unless simultaneously with the consummation thereof, the surviving or resulting Person (if other than the Company), or the acquirer, in the case of a sale of all or substantially all of the Company’s assets, resulting from such Liquidity Event shall assume in all material respects (including with respect to the provisions of Section 6 and this Section 7), the obligation to deliver to the Holder such cash, shares, securities or other assets or property which, in accordance with the foregoing provision, the Holder shall be entitled to receive upon exercise of the Warrants.

Notwithstanding anything else to the contrary in this Warrant, in the event of a Liquidity Event in which the Common Shares are converted into solely the right to receive cash upon the consummation of such Liquidity Event, if this Warrant has not previously been exercised in full on a date occurring before the third (3^rd) Business Day prior to the consummation of such Liquidity Event, any unexercised portion of this Warrant shall be deemed exercised in full, without the delivery of any notice of exercise or any other action by or on behalf of the Holder, effective immediately prior to the consummation of such Liquidity Event and the Holder shall be entitled to receive cash in an amount equal to the amount of cash payable in such Liquidity Event in respect of a number of Common Shares equal to the number of Warrant Shares that would be deliverable upon an exercise of this Warrant in full immediately prior to consummation of such Liquidity Event pursuant to Section 1.2.2 of the unexercised portion of this Warrant, where the Market Price of one (1) Common Share in such an exercise is deemed for these purposes to be the cash payable in respect of one (1) Common Share in such Liquidity Event; provided that, for the avoidance of doubt, if the cash payable in respect of one (1) Common Share in such Liquidity Event in which the Common Shares are converted into solely the right to receive cash upon the consummation of such Liquidity Event is less than the then-applicable Exercise Price, then upon consummation of such Liquidity Event, the unexercised portion of this Warrant shall be cancelled for no consideration.

The provisions of this Section 7 shall similarly apply to successive Liquidity Events.

8. Notices. Any notice, request, instruction or other document to be given hereunder by any party to the other will be in writing and will be deemed to have been duly given (A) on the date of delivery if delivered personally, or by facsimile or electronic transmission, upon confirmation of receipt, or (B) on the second (2nd) Business Day following the date of dispatch if delivered by a recognized next day courier service. All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the Holder to the Company, or the Company to the Holder, as applicable, to receive such notice.

If to the Company, to:

Despegar.com, Corp.

Av. Jujuy 2013, Ciudad Autónoma de Buenos Aires, Argentina

Attn: Mariano Scagliarini, General Counsel

Email:

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with a copy (which shall not constitute notice) to:

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

Attn: Juan Francisco Mendez

Phone:

Fax:

Email:

If to the Holder, to:

c/o Catterton Latin America Management Co.

30 Rockefeller Plaza, Suite 5405

New York, NY 10112

Attn: Shari Miller

Email:

With a copy to:

Proskauer Rose LLP

Eleven Times Square

New York, NY 10036

Attn: Daniel Forman

          Lily Desmond

Fax:

Email:

8.1 Notice of Adjustment. Whenever the Exercise Price or the number of Warrant Shares and other property, if any, issuable upon the exercise of the Warrants is adjusted, as herein provided, the Company shall deliver to the Holders a certificate of its Chief Financial Officer setting forth, in reasonable detail, the event requiring the adjustment and the method by which such adjustment was calculated and specifying the Exercise Price and the number of Warrant Shares issuable upon exercise of the Warrants after giving effect to such adjustment. Notwithstanding the foregoing, if the Holder objects to the Exercise Price and the number of Warrant Shares issuable upon exercise of the Warrants (after giving effect to the proposed adjustment) set forth in the certificate provided by the Company’s Chief Financial Officer, the Company shall promptly obtain a certificate of an Independent Financial Expert appointed and compensated by the Company for such purpose setting forth the same information and detail as required in the immediately preceding sentence, and such certificate shall be used for the basis to effect the applicable adjustment to the Exercise Price and the number of Warrant Shares issuable upon exercise of the Warrants.

8.2 Notice of Certain Transactions. In the event the Company shall propose to (i) distribute any dividend or other distribution to all holders of its Common Shares or options, warrants or other rights to receive such dividend or distribution, (ii) offer to all holders of its Common Shares rights to subscribe for or to purchase any securities convertible into Common Shares or shares of stock of any class or any other securities, rights or options, (iii) effect any capital reorganization, reclassification, consolidation or merger, (iv) effect the dissolution, liquidation or winding-up of the Company or (v) make a tender offer or exchange offer with respect to the Common Shares, in each case, in which the Holder will not otherwise participate with respect to its Warrant Shares without exercise of this Warrant, the Company shall, at least ten (10) days prior to the taking of such proposed action, send to the Holder a notice of such

16

proposed action or offer, which shall specify the record date for the purposes of such dividend, distribution or rights, or the date such issuance or event is to take place and the date of participation therein by the holders of Common Shares, if any such date is to be fixed, and shall briefly indicate the effect, if any, of such action on the Common Shares and on the number and kind of any other shares of stock and on property, if any, and the number of Common Shares and other property, if any, issuable upon exercise of each Warrant and the Exercise Price after giving effect to any such adjustment pursuant to Section 6 which will be required as a result of such action.

9. Transfer of Warrant and Warrant Shares.

9.1 Until such time as set forth in Section 1.3, the certificate or certificates (or book entry shares) representing the Warrant Shares acquired upon the exercise of this Warrant shall bear the restrictive legend substantially in the form set forth on Exhibit B hereto.

9.2 Subject to the provisions of Section 9.1, the Holder may sell, assign, transfer, pledge or dispose of all or any portion of this Warrant at any time or from time to time, subject to any applicable restrictions on transfer by the Holder in the Investment Agreement. In connection with any transfer of all or any portion of this Warrant, the Holder must provide an assignment form substantially in the form attached hereto as Exhibit C duly completed and executed by the Holder or any such subsequent Holder, as applicable, and the proposed transferee must consent in writing to be bound by the terms and conditions of this Warrant and shall become a “Holder” hereunder. Any transfer of all or any portion of this Warrant shall also be subject to the Securities Act and other applicable federal or state securities or blue sky laws. Upon any transfer of this Warrant in full, the Holder shall be required to physically surrender this Warrant to the Company within three (3) Business Days of the date the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued. This Warrant or any portion thereof shall not be sold, assigned, transferred, pledged or disposed of in violation of the Securities Act, federal or state securities laws or the Memorandum and Articles. Any purported transfer of this Warrant or any portion thereof in violation of this Section 9 or, if applicable, the Investment Agreement shall be void ab initio.

The Company shall register this Warrant upon records to be maintained by or on behalf of the Company for that purpose in the name of the record Holder hereof from time to time. Absent manifest error or actual notice to the contrary, the Company may deem and treat the Holder of this Warrant so registered as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes.

10. Tax Treatment of Warrant. The Holder and the Company agree to treat the Warrant Shares issuable under this Warrant as outstanding as of the Issue Date for all U.S. tax purposes, and neither the Holder nor the Company shall take any position inconsistent with such treatment in any tax returns or in any judicial or administrative proceeding in respect of taxes, unless otherwise required pursuant to a “determination” within the meaning of Section 1313(a) of the Code (or any similar or corresponding provision of state, local or non-U.S. law).

11. Registration Rights. The Holder of this Warrant shall have such registration rights for the Warrant Shares as provided in the Registration Rights Agreement.

12. No Rights as Shareholder until Exercise. This Warrant does not entitle the Holder to any of the rights as a member of the Company prior to the exercise of this Warrant, including, without limitation, the right to receive dividends or other distributions, exercise any rights to vote or to consent or to receive notice as a member in respect of the meetings of members or the election of directors of the Company or any other matter. No provision thereof and no mere enumeration therein of the rights or privileges of any Holder shall give rise to any liability of such Holder for the Exercise Price hereunder or as a shareholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

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13. Binding Effect. The terms and provisions of this Warrant shall inure to the benefit of, and be binding upon, the Company and the Holder and their respective successors and permitted assigns.

14. Governing Law; Submission to Jurisdiction. This Warrant shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to conflict of law principles that would result in the application of the law of any other jurisdiction. Any action against any party relating to the foregoing shall be brought in any federal or state court of competent jurisdiction located within the Borough of Manhattan in New York City, and the parties hereto hereby irrevocably submit to the non-exclusive jurisdiction of any such court over any such action. The parties hereby irrevocably waive, to the fullest extent permitted by applicable law, any objection which they may now or hereafter have to the laying of venue of any such dispute brought in such courts or any defense of inconvenient forum for the maintenance of such dispute. Each of the parties hereto agrees that a judgment in any such dispute may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

15. Waiver of Jury Trial. THE PARTIES TO THIS WARRANT EACH HEREBY WAIVES, AND AGREES TO CAUSE ITS AFFILIATES TO WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING UNDER THIS WARRANT OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS WARRANT OR ANY OF THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. THE PARTIES TO THIS WARRANT EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES TO THIS WARRANT MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS WARRANT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

16. Severability. In the event that one or more of the provisions of this Warrant shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Warrant, but this Warrant shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.

17. Amendment. This Warrant may be amended and the observance of any term of this Warrant may be waived only with the written consent of (i) the Company and (ii) the holders of a majority-in-interest of the Warrants issued pursuant to the Investment Agreement; provided, however, that the prior written consent of the Holder, if the Holder is LCLA Daylight LP, shall be required for any amendment of this Warrant.

18. Headings. The headings in this Warrant are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision of this Warrant.

19. Counterparts. This Warrant may be executed in any number of original, facsimile or PDF counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

[Signature Page Follows]

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IN WITNESS WHEREOF, the parties have each caused this warrant to be duly executed as of the date first written above.

DESPEGAR.COM, CORP.
By:	/s/ Alberto López Gaffney
Name: Alberto López Gaffney
Title: Chief Financial Officer

[Signature Page to Penny Warrant of Despegar.com]

LCLA DAYLIGHT LP
By: CALA2 Managers, Ltd its General Partner
By:	/s/ Dirk Donath
Name:	Dirk Donath
Title:	Director

[Signature Page to Penny Warrant of Despegar.com]

EXHIBIT A-1

PURCHASE FORM

To:_________________ Dated:______________

The undersigned hereby irrevocably elects to subscribe for and purchase ________________ Common Shares of Despegar.com, Corp., a BVI business company, pursuant to the purchase provisions of Section 1.2.1 of the attached Warrant and herewith makes payment of $____________, representing the full purchase price for such shares at the price per share provided for in the Warrant.

Please issue the applicable number of Warrant Shares issuable pursuant to the Warrant in the name of the undersigned:

☐ via book-entry transfer;

☐ in the form of certificates in the name of the Holder;

If said number of Common Shares shall not be all the Common Shares issuable upon exercise of the attached Warrant, pursuant to Section 1.4 of the Warrant, a new Warrant is to be issued in the name of the undersigned for the balance remaining of such Common Shares.

Signature: _______________________________

Address: ________________________________

EXHIBIT A-2

CASHLESS EXERCISE FORM

To:_________________ Dated:______________

The undersigned hereby irrevocably elects to purchase ________________ Common Shares of Despegar.com, Corp., a BVI business company, pursuant to the cashless exercise provisions of Section 1.2.2 of the attached Warrant, which is tendered herewith.

Please issue the applicable number of Warrant Shares issuable pursuant to the Warrant in the name of the undersigned:

☐ via book-entry transfer;

☐ in the form of certificates in the name of the Holder;

If said number of Common Shares shall not be all the Common Shares issuable upon exercise of the attached Warrant, pursuant to Section 1.4 of the Warrant, a new Warrant is to be issued in the name of the undersigned for the balance remaining of such Common Shares.

Signature: _______________________________

Address: ________________________________

EXHIBIT B

FORM OF RESTRICTIVE LEGEND

THE OFFER AND SALE OF THE SECURITIES (INCLUDING THE COMMON SHARES WHICH MAY BE PURCHASED HEREUNDER) REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE SECURITIES MAY NOT UNDER ANY CIRCUMSTANCES BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY OTHER APPLICABLE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS.

THE SECURITIES (INCLUDING THE COMMON SHARES WHICH MAY BE PURCHASED HEREUNDER) REPRESENTED BY THIS INSTRUMENT ARE SUBJECT TO TRANSFER AND OTHER RESTRICTIONS SET FORTH IN AN INVESTMENT AGREEMENT, DATED AS OF AUGUST 20, 2020, COPIES OF WHICH ARE ON FILE WITH THE SECRETARY OF THE COMPANY.

EXHIBIT C

ASSIGNMENT FORM

FOR VALUE RECEIVED, ________________________________________ (the “Holder”) hereby sells, assigns and transfers all of the rights of the undersigned under the attached Warrant with respect to the number of shares of stock covered thereby set forth below, unto:

Name of Assignee Address No. of Shares

(the “Assignee”)

HOLDER

Dated:_______________________

Signature:____________________

Dated:_______________________

Witness:_____________________

By signing below, the Assignee acknowledges that it qualifies as an “accredited investor” as defined in Rule 501(a) promulgated under the Securities Act of 1933, as amended.

ASSIGNEE

Dated:_______________________

Signature:____________________

Dated:_______________________

Witness:_____________________

EX-21.1

Exhibit 21.1

SUBSIDIARIES OF THE REGISTRANT

Name of Subsidiary	Jurisdiction of Incorporation or Organization
Badurey S.A.	Uruguay
BD Travelsolution, S. de RL. de C.V.*	Mexico
BDTP Venture, Inc.*	Delaware, United States of America
Beda Transportation, Inc.*	Florida, United States of America
Beda Travel & Tours, Inc.*	Florida, United States of America
Beda Travel, Inc.*	Florida, United States of America
Click Hoteles.com, LLC*	Delaware, United States of America
Decolar.com Ltda.	Brazil
Decolar.com, Inc.	Delaware, United States of America
Despegar Colombia S.A.S.	Colombia
Despegar Ecuador S.A.	Ecuador
Despegar Servicios, S.A. de C.V.*	Mexico
Despegar.com Chile SpA.	Chile
Despegar.com México, S.A. de C.V.	Mexico
Despegar.com Perú S.A.C.	Peru
Despegar.com USA, Inc.	Delaware, United States of America
Despegar.com.ar S.A.	Argentina
DFinance Holding Ltda.	Brazil
Holidays S.A.	Uruguay
Jamiray International S.A.	Uruguay
Koin Administradora de Cartões e Meios de Pagamento S.A.	Brazil
Rivamor S.A.	Uruguay
Satylca S.C.A.	Uruguay
Servicios Online 3351 de Venezuela C.A.	Venezuela
South Net Chile, LTDA	Chile
South Net Travel, Inc.*	Florida, United States of America
South Net Turismo Colombia, S.A.	Colombia
South Net Turismo Perú S.R.L.*	Peru
South-Net Turismo Brasil, LTDA	Brazil
South-Net Turismo S.A.	Argentina
Tecnobelt S.A.*	Uruguay
Transporturist, S.A. de C.V.	Mexico
Travel Reservations S.R.L.	Uruguay
Viaceco Travel, S.A. de C.V.	Mexico
Viajes Beda, S.A. de C.V.	Mexico
Viajes Despegar.com O.N.L.I.N.E. S.A.	Costa Rica

* In process of dissolution.

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statement on Form F-3 (No. 333-253401) of Despegar.com, Corp. of our report dated April 30, 2021 relating to the financial statements, which appears in this Form 20-F.

/s/ PRICE WATERHOUSE & CO. S.R.L.

/s/ Eduardo Alfredo Loiácono (Partner)

Eduardo Alfredo Loiácono

Buenos Aires, Argentina    

April 30, 2021

Price Waterhouse & Co. S.R.L., Bouchard 557, piso 8°, C1106ABG - Ciudad de Buenos Aires

  T: +(54.11) 4850.6000, F: +(54.11) 4850.6100, www.pwc.com/ar

Price Waterhouse & Co. S.R.L. es una firma miembro de la red global de PricewaterhouseCoopers International Limited (PwCIL). Cada una de las firmas es una entidad legal separada que no actúa como mandataria de PwCIL ni de cualquier otra firma miembro de la red.

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Damián Scokin, certify that:

1. I have reviewed this annual report on Form 20-F of Despegar.com, Corp. (the “Company”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

4. The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;

(d) disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect the Company’s internal control over financial reporting; and

5. The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: April 30, 2021

By:	/s/ Damián Scokin
Name:	Damián Scokin
Title:	Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Alberto Lopez Gaffney, certify that:

1. I have reviewed this annual report on Form 20-F of Despegar.com, Corp. (the “Company”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

4. The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;

(d) disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect the Company’s internal control over financial reporting. and

5. The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: April 30, 2021

By:	/s/ Alberto Lopez Gaffney
Name:	Alberto Lopez Gaffney
Title:	Chief Financial Officer

EX-31.3

Exhibit 31.3

Certification of Chief Executive Officer

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report of Despegar.com, Corp. (the “Company”) on Form 20-F for the fiscal year ended December 31, 2020, as filed with the U.S. Securities and Exchange Commission on the date hereof (the “Report”), I, Damián Scokin, Chief Executive Officer, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the U.S. Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(i) the Report fully complies with the requirements of Section 13(a) or 15(d) of the U.S. Securities Exchange Act of 1934; and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: April 30, 2021

By:	/s/ Damián Scokin
Name:	Damián Scokin
Title:	Chief Executive Officer

EX-31.4

Exhibit 31.4

Certification of Chief Financial Officer

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report of Despegar.com, Corp. (the “Company”) on Form 20-F for the fiscal year ended December 31, 2020, as filed with the U.S. Securities and Exchange Commission on the date hereof (the “Report”), I, Alberto Lopez Gaffney, Chief Financial Officer, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the U.S. Sarbanes-Oxley-Act of 2002, that to the best of my knowledge:

(i) the Report fully complies with the requirements of Section 13(a) or 15(d) of the U.S. Securities Exchange Act of 1934; and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: April 30, 2021

By:	/s/ Alberto Lopez Gaffney
Name:	Alberto Lopez Gaffney
Title:	Chief Financial Officer

XML

Cover Page	12 Months Ended
	Dec. 31, 2020 shares
Document Information [Line Items]
Document Type	20-F
Amendment Flag	false
Document Period End Date	Dec. 31, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY
Trading Symbol	DESP
Title of 12(b) Security	Ordinary Shares, no par value
Security Exchange Name	NYSE
Entity Registrant Name	Despegar.com, Corp.
Entity Central Index Key	0001703141
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Shell Company	false
Document Annual Report	true
Document Transition Report	false
Document Shell Company Report	false
Document Registration Statement	false
Entity Interactive Data Current	Yes
Entity Voluntary Filers	No
Document Accounting Standard	U.S. GAAP
Entity Common Stock, Shares Outstanding	70,099,328
Entity Address, Address Line One	Juana Manso 1069, Floor 5
Entity Address, City or Town	Ciudad Autónoma de Buenos Aires
Entity Address, Postal Zip Code	C1107CBU
Entity Incorporation, State or Country Code	D8
Entity File Number	001-38209
Entity Address, Country	AR
ICFR Auditor Attestation Flag	false
Business Contact [Member]
Document Information [Line Items]
Contact Personnel Name	Mariano Scagliarini
Entity Address, Address Line One	Juana Manso 1069, Floor 5
Entity Address, City or Town	Ciudad Autónoma de Buenos Aires
Entity Address, Postal Zip Code	C1107CBU
City Area Code	+54
Local Phone Number	11 4894-3500
Entity Address, Country	AR

XML

Consolidated Balance Sheets - USD ($) $ in Thousands		Dec. 31, 2020	Dec. 31, 2019
Current assets
Cash and cash equivalents		$ 334,430	$ 309,187
Restricted cash		16,055	4,457
Trade accounts receivable, net of credit expected loss of 10,795 and 3,205		79,816	213,551
Related party receivable		8,174	19,555
Other assets and prepaid expenses		52,295	69,694
Total current assets		490,770	616,444
Non-current assets
Other assets		71,795	25,351
Lease right-of-use assets		36,239	41,638
Property and equipment, net		22,462	21,205
Intangible assets, net		96,495	49,619
Goodwill		123,217	46,956
Total non-current assets		350,208	184,769
TOTAL ASSETS		840,978	801,213
Current liabilities
Accounts payable and accrued expenses		32,161	59,673
Travel accounts payable		229,435	206,954
Related party payable		19,351	86,602
Short-term debt		8,949	19,209
Deferred revenue		9,324	8,853
Other liabilities		56,109	46,722
Contingent liabilities		8,398	6,297
Lease liabilities		8,591	6,498
Total current liabilities		372,318	440,808
Non-current liabilities
Other liabilities		44,913	6,646
Contingent liabilities		24,949	54
Long-term debt		10,367
Lease liabilities		28,694	34,469
Related party liability		125,000	125,000
Total non-current liabilities		233,923	166,169
TOTAL LIABILITIES		606,241	606,977
Redeemable non-controlling interest		2,621
Mezzanine Equity		141,007
SHAREHOLDERS' EQUITY
Common stock (1)	[1]	265,698	261,608
Additional paid-in capital		379,780	327,523
Other reserves		(728)	(728)
Accumulated other comprehensive income		(12,580)	610
Accumulated losses		(470,173)	(326,510)
Treasury Stock		(68,267)	(68,267)
Total Shareholders' Equity		93,730	194,236
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		840,978	$ 801,213
Series A Non-convertible Preferred Shares
LIABILITIES AND SHAREHOLDERS' EQUITY
Non-convertible and convertible preferred shares		91,686
Series B Convertible Preferred Shares
LIABILITIES AND SHAREHOLDERS' EQUITY
Non-convertible and convertible preferred shares		$ 46,700

[1] Represents 70,099 shares (in thousands) issued and outstanding as of December 31, 2020 and 69,648 shares (in thousands) issued and outstanding as of December 31, 2019.

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Allowance for credit loss on trade accounts receivable current	$ 10,795	$ 3,205
Common stock, shares issued	70,099	69,648
Common stock, shares outstanding	70,099	69,648
Series A Redeemable Non Convertible Preferred Stock [Member]
Temporary equity shares issued	150,000
Temporary equity shares outstanding	150,000
Series B Redeemable Convertible Preferred Stock [Member]
Temporary equity shares issued	50,000
Temporary equity shares outstanding	50,000

XML

Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands		12 Months Ended
		Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Income Statement [Abstract]
Revenue	[1]	$ 131,334	$ 524,876	$ 530,614
Cost of revenue		(85,518)	(179,565)	(172,110)
Gross profit		45,816	345,311	358,504
Operating expenses
Selling and marketing		(57,292)	(187,894)	(174,357)
General and administrative		(94,722)	(92,962)	(67,240)
Technology and product development		(67,043)	(73,375)	(71,154)
Impairment of long-lived assets and goodwill		(1,917)		(363)
Total operating expenses		(220,974)	(354,231)	(313,114)
Loss from equity investments		(2,059)
Operating (loss) / income		(177,217)	(8,920)	45,390
Financial income / (expense), net		12,910	(17,215)	(19,167)
(Loss) / income before income taxes		(164,307)	(26,135)	26,223
Income tax benefit / (expense)		21,438	5,225	(7,069)
Net (loss) / income		(142,869)	(20,910)	19,154
Net loss attributable to redeemable non-controlling interest		282
Net (loss) / income attributable to Despegar.com, Corp.		$ (142,587)	$ (20,910)	$ 19,154
(Losses) / Earnings per share available to common stockholders:
Basic		$ (2.06)	$ (0.30)	$ 0.28
Diluted		$ (2.06)	$ (0.30)	$ 0.27
Shares used in computing (losses) / earnings per share (in thousands):
Basic		73,001	69,465	69,154
Diluted		73,001	69,465	71,254

[1] Includes $7,066, $38,760 and $43,975 for related party transactions for the years 2020, 2019 and 2018, respectively. See Note 22.

XML

Consolidated Statements of Income (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Revenue from related parties	$ 7,066	$ 38,760	$ 43,975

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Statement of Comprehensive Income [Abstract]
Net (loss) / income	$ (142,869)	$ (20,910)	$ 19,154
Other comprehensive loss, net of tax
Foreign currency translation adjustment	(13,190)	(2,441)	(13,272)
Comprehensive (loss) / income	(156,059)	(23,351)	5,882
Net loss attributable to redeemable non-controlling interest	282
Foreign currency translation adjustment attributable to redeemable non-controlling interest	(170)
Comprehensive (loss) / income attributable to Despegar.com, Corp.	$ (155,947)	$ (23,351)	$ 5,882

XML

Consolidated Statements of Changes in Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands	Total	Cumulative Effect, Period of Adoption, Adjustment [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Other Reserves [Member]	Accumulated Other Comprehensive Income [Member]	Accumulated Losses [Member]	Accumulated Losses [Member] Cumulative Effect, Period of Adoption, Adjustment [Member]	Treasury Stock [Member]
Change in accounting standard ASC 326 at Dec. 31, 2017		$ 42,862						$ 42,862
Beginning Balance at Dec. 31, 2017	$ 217,958		$ 253,535	$ 316,444	$ (728)	$ 16,323	$ (367,616)
Adjusted balance at Dec. 31, 2017	260,820		$ 253,535	316,444	(728)	16,323	(324,754)
Beginning Balance, Shares at Dec. 31, 2017			69,097
Stock-based compensation expense	6,766			6,766
Foreign currency translation adjustment	(13,272)					(13,272)
Exercise of Stock Options	136		$ 1,719	(1,583)
Exercise of Stock Options , Shares			138
Net income (loss) for the year	19,154						19,154
Treasury Stock, value	(26,030)								$ (26,030)
Ending Balance at Dec. 31, 2018	247,574		$ 255,254	321,627	(728)	3,051	(305,600)		(26,030)
Ending Balance, Shares at Dec. 31, 2018			69,235
Stock-based compensation expense	11,686			11,686
Foreign currency translation adjustment	(2,441)					(2,441)
Exercise of Stock Options	564		$ 6,354	(5,790)
Exercise of Stock Options , Shares			413
Net income (loss) for the year	(20,910)						(20,910)
Treasury Stock, value	(42,237)								(42,237)
Ending Balance at Dec. 31, 2019	194,236		$ 261,608	327,523	(728)	610	(326,510)		(68,267)
Ending Balance, Shares at Dec. 31, 2019			69,648
Change in accounting standard ASC 326 at Dec. 31, 2019		$ (1,076)						$ (1,076)
Adjusted balance at Dec. 31, 2019	193,160		$ 261,608	327,523	(728)	610	(327,586)		(68,267)
Stock-based compensation expense	7,312			7,312
Foreign currency translation adjustment	(13,190)					(13,190)
Exercise of Stock Options	370		$ 4,090	(3,720)
Exercise of Stock Options , Shares			451
Net income (loss) for the year	(142,587)						(142,587)
Warrants, net of issuance costs	56,339			56,339
Accretion of Series A non-convertible preferred shares	(2,831)			(2,831)
Accrual of cumulative dividends of Series A non-convertible preferred shares	(4,212)			(4,212)
Accretion of redeemable non-controlling interest	(78)			(78)
Ending Balance at Dec. 31, 2020	93,730		$ 265,698	379,780	$ (728)	$ (12,580)	$ (470,173)		$ (68,267)
Ending Balance, Shares at Dec. 31, 2020			70,099
Payment of dividends to Series B convertible preferred shares	$ (553)			$ (553)

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2020		Dec. 31, 2019		Dec. 31, 2018
Cash flows from operating activities:
Net (loss) / income		$ (142,869)		$ (20,910)		$ 19,154
Adjustments to reconcile net (loss) / income to net cash flows from operating activities:
Net loss attributable to redeemable non-controlling interest		282
Unrealized foreign currency (gain) / loss		5,066		6,748		(1,088)
Changes in fair value of earnout liability		2,239
Changes in seller indemnification		(2,239)
Loss from equity investments		2,059
Depreciation expense		7,981		6,659		4,985
Amortization expense		21,699		16,137		10,140
Disposal of property and equipment				597
Write-off of leasehold improvements		3,661
Impairment of long-lived assets and goodwill		1,917				363
Stock based compensation expense		7,312		11,686		6,766
Amortization of lease right-of-use assets		3,417		3,923
Interest and penalties		2,082		1,228		494
Income tax (benefit) / expense		(21,478)		(9,666)		2,876
Allowance for credit expected losses		12,270		4,294		1,062
Provision for contingencies		11,096		1,603		2,021
Changes in assets and liabilities, net of non-cash transactions:
Decrease / (Increase) in trade accounts receivable, net of credit expected loss		108,894		13,823		(54,705)
Decrease / (Increase) in related party receivable		13,897		(10,905)		(3,406)
Decrease / (Increase) in other assets and prepaid expenses		27,105		19,695		(61,302)
(Decrease) / Increase in accounts payable and accrued expenses		(37,750)		16,651		4,277
(Decrease) / Increase in travel accounts payable		(75,888)		(19,459)		42,789
(Decrease) / Increase in other liabilities		(300)		4,391		3,309
Decrease in contingent liabilities		(3,008)		(1,990)		(5,567)
(Decrease) / Increase in related party payable		(63,810)		3,678		4,203
Decrease in lease liabilities		(1,990)		(4,573)
Increase in deferred revenue		10		628		6,009
Net cash flows (used in) / provided by operating activities		(118,345)		44,238		(17,620)
Cash flows from investing activities:
Payments for acquired business, net of cash acquired		2,743		(228)
Acquisition of property and equipment		(3,458)		(5,942)		(13,085)
Increase of intangible assets, including internal-use software and website development		(14,028)		(24,614)		(13,494)
Net cash flows used in investing activities		(14,743)		(30,784)		(26,579)
Cash flows from financing activities:
Net (decrease) / increase of short-term debt		(14,288)		(11,507)		24,637
Increase in long-term debt		640
Decrease in long-term debt		(375)
Exercise of stock based compensation		370		564		136
Purchase of treasury stock				(42,237)		(26,030)
Proceeds from issuance of preferred shares		200,000
Issuance costs of preferred shares and warrants		(12,098)
Payment of dividends to Series B convertible preferred shares		(553)
Net cash flows provided by / (used in) financing activities		173,696		(53,180)		(1,257)
Effect of exchange rate changes on cash and cash equivalents		(3,767)		1,181		(13,132)
Net increase / (decrease) in cash and cash equivalents		36,841		(38,545)		(58,588)
Cash and cash equivalents and restricted cash as of beginning of the year		313,644	[1]	352,189	[1]	410,777
Cash and cash equivalents and restricted cash as of end of the year	[1]	350,485		313,644		352,189
Supplemental cash flow information
Cash paid for income tax		3,427		9,106		14,423
Interest paid		4,948		5,767		$ 5,311
Financed portion of acquisition		$ 10,168		$ 10,696

[1] See Note 8.

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Business

12 Months Ended

Dec. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business

1. Business

Despegar.com, Corp. (formerly Decolar.com, Inc.) is the leading online travel company in Latin America. We provide our traveler customers a comprehensive product offering, including airline tickets, packages, hotels and other travel-related products, which enables them to find, compare, plan and purchase travel products easily through our marketplace. We provide our network of travel suppliers a technology platform for managing the distribution of their travel products and access to traveler customers. We offer these travel products and services through our two brands: “Despegar”, our global brand, and “Decolar”, our brand for the Brazilian market. We refer to Despegar.com, Corp. and its subsidiaries collectively as “Despegar Group”, the “Company”, “us”, “we” and “our” in these consolidated financial statements.

On October 1, 2020, we closed the acquisition of the 100% equity interests of Viajes Beda S.A. de C.V. (“Viajes Beda”) and Transporturist S.A. de C.V. (“Transporturist”), both companies organized under the laws of Mexico (collectively the “Acquisition”). Viajes Beda and Transporturist are collectively hereinafter referred to as the “Best Day Group”. The Best Day Group operates mainly in Mexico and to a lesser extent in several countries in South America, including Argentina, Brazil and Uruguay among others, and the United States. The Best Day Group primarily provides travelers with several product offerings, including airline tickets, packages, hotels and other travel-related products, through its online platforms, call centers and offline presence, and provides travel suppliers a technology platform for managing the distribution of their travel products and access to traveler customers. The Best Day Group also provides ground transportation services and group tours to travelers principally across Mexico and the Dominican Republic main tourist destinations. The Best Day Group offers these travel products and services through its brands: “Best Day” and “BD Experience”. In addition, the Best Day Group offers hotel inventory, as well as transfers, activities, car rental, packages and tours to travel agencies through its tradename “HotelDo”. Also, the Best Day Group provides white label services for major travel vendors, including exclusive partnerships with the largest Mexican airlines operating their packages platforms. See Note 4 for a discussion of the Acquisition.

Effect of Novel Coronavirus 2019 (COVID-19) on these consolidated financial statements

The ongoing COVID-19 pandemic is disrupting the global economy in general and the travel industry in particular, and consequently adversely affecting our business, results of operations and cash flows. The impact to date of the COVID-19 pandemic on global economic conditions and on the travel industry has been severe. The pandemic has also significantly increased economic uncertainty and volatility.  

Demand for travel began showing early signs of weakness by the beginning of March 2020. Within a matter of days, with more news of the potentially extensive spreading of the virus to other parts of the world, travel demand began to decline significantly, and then the decline accelerated precipitously as governments implemented strict measures to limit the spread of the virus. As a result, our travel booking volumes have been and are significantly lower than prior year levels and cancellation levels have been elevated compared to pre-COVID 19 levels.

More recently, there has been varying degrees of containment of the virus in certain countries and hence some signs of travel recovery; however, the degree of containment and the recovery in travel has varied country to country and there have been instances where cases of COVID-19 have started to increase again after a period of decline, and even new variants of the virus have been detected recently. Additionally, many travel restrictions and quarantine orders remain in place or were reimposed. On the other hand, in December 2020, several countries officially launched their COVID-19 vaccination campaigns and began administering vaccine doses at various levels of speed. Health authorities in the countries in which we operate are prioritizing high-risk groups, as only a limited number of doses are expected to be available in the early stages of the vaccination rollout. It is unclear whether enough people in the countries in which we operate will get vaccinated and when such countries will reach a level of herd immunity to prevent the virus from further disrupting the travel industry.

Due to the high degree of cancellations and customer refunds and lower new bookings, in 2020 we experienced a 75% decrease in revenue as compared to the prior year. We experienced unfavorable working capital trends and material negative cash flows during the year ended December 31, 2020, although the level of negative cash flow has moderated as booking trends slightly improved and cancellations stabilized in the fourth quarter of 2020. Overall, the full duration and total impact of the COVID-19 pandemic remains uncertain and it is difficult to predict how the recovery will unfold for the travel industry and, in particular, our business. For a discussion on incremental cancellation and allowance for expected uncollectible amounts impacts, see Note 3. For a discussion of asset impairments recognized in conjunction with the pandemic, see Notes 11, 12 and 13. For a discussion of recent actions to strengthen our liquidity position in the current environment, see Notes 6 and 18.

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Basis of consolidation and presentation

12 Months Ended

Dec. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of consolidation and presentation

2. Basis of consolidation and presentation

Basis of presentation

We prepared these consolidated financial statements in accordance with accounting principles generally accepted in the United States (“US GAAP”).

Our consolidated financial statements include the accounts of Despegar.com, Corp., our wholly owned subsidiaries, and entities for which we control a majority of the entity’s outstanding common stock. We record non-controlling interest in our consolidated financial statements to recognize the minority ownership interest in our consolidated subsidiaries. Non-controlling interest in the earnings and losses of consolidated subsidiaries represent the share of net income or loss allocated to members or partners in our consolidated entities, which includes the non-controlling interest share of net income or loss from our redeemable non-controlling interest entity. We consolidate our subsidiaries from the date on which we obtain control. We deconsolidate any subsidiary from the date we lose control. We record our investments in entities that we do not control, but over which we have the ability to exercise significant influence, using the equity method. We have eliminated significant intercompany transactions and accounts. We change the accounting policies of subsidiaries where necessary to ensure consistency with our accounting policies. All of our subsidiaries have the same year-end.

We believe that the assumptions underlying our consolidated financial statements are reasonable. However, these consolidated financial statements do not present our future financial position, the results of our future operations and cash flows.

The following are our subsidiaries as of the end of the years presented:

Name of the subsidiary (in alphabetical order)	Type	Country of incorporation	As of December 31, 2020			As of December 31, 2019
			% Owned
Agencia de Viajes y Turismo Falabella S.A.S. (1)	Operating	Colombia		—			100	%
Badurey S.A.	Holding	Uruguay		100	%		100	%
BD Travelsolution, S. de R.L. de C.V.	Operating	Mexico		100	%		—
BDTP Venture, Inc.	Operating	United States		100	%		—
Beda Transportation, Inc.	Operating	United States		100	%		—
Beda Travel & Tours, Inc.	Operating	United States		100	%		—
Beda Travel, Inc.	Holding	United States		100	%		—
Click Hoteles.com, LLC	Holding	United States		100	%		—
Decolar.com Ltda.	Operating	Brazil		100	%		100	%
Decolar.com, Inc.	Holding	United States		100	%		100	%
Desonproc S.L. (6)	Operating	Spain		—			100	%
Despegar Colombia S.A.S.	Operating	Colombia		100	%		100	%
Despegar Ecuador S.A.	Operating	Ecuador		100	%		100	%
Despegar Servicios, S.A. de C.V. (5)	Operating	Mexico		100	%		100	%
Despegar.com Chile SpA	Operating	Chile		100	%		100	%
Despegar.com México S.A. de C.V.	Operating	Mexico		100	%		100	%
Despegar.com Panama S.A. (6)	Operating	Panama		—			100	%
Despegar.com Peru S.A.C.	Operating	Peru		100	%		100	%
Despegar.com USA, Inc.	Operating	United States		100	%		100	%
Despegar.com.ar S.A.	Operating	Argentina		100	%		100	%
DFinance Holding Ltda.	Holding	Brazil		100	%		—
Holidays S.A.	Operating	Uruguay		100	%		100	%
Jamiray International S.A.	Operating	Uruguay		100	%		—
Koin Administradora de Cartões e Meios de Pagamento S.A.	Operating	Brazil		84	%		—
Rivamor S.A.	Holding	Uruguay		100	%		100	%
Satylca S.C.A.	Holding	Uruguay		100	%		100	%
Servicios Online 3351 de Venezuela C.A.	Operating	Venezuela		100	%		100	%
Servicios Online S.A.S. (1)	Operating	Colombia		—			100	%
South Net Chile, LTDA	Operating	Chile		100	%		—
South Net Travel, Inc.	Operating	United States		100	%		—
South Net Turismo Colombia, S.A.	Operating	Colombia		100	%		—
South Net Turismo Perú S.R.L.	Operating	Peru		100	%		—
South-Net Turismo Brasil, LTDA	Operating	Brazil		100	%		—
South-Net Turismo S.A.	Operating	Argentina		100	%		—
Tecnobelt S.A.	Operating	Uruguay		100	%		100	%
Transporturist, S.A. de C.V.	Operating	Mexico		100	%		—
Travel Reservations S.R.L.	Operating	Uruguay		100	%		100	%
Viaceco Travel, S.A. de C.V. (5)	Operating	Mexico		100	%		—
Viajes Beda, S.A. de C.V.	Operating	Mexico		100	%		—

Name of the subsidiary (in alphabetical order)	Type	Country of incorporation	As of December 31, 2020			As of December 31, 2019
Viajes Despegar.com O.N.L.I.N.E. S.A.	Operating	Costa Rica		100	%		100	%
Viajes Falabella S.A. (2)	Operating	Argentina		—			100	%
Viajes Falabella S.A.C. (3)	Operating	Peru		—			100	%
Viajes Falabella SpA (4)	Operating	Chile		—			100	%

(1) Merged with and into Despegar Colombia S.A.S.

(2) Merged with and into Despegar.com.ar S.A.

(3) Merged with and into Despegar.com Peru S.A.C.

(4) Merged with and into Despegar.com Chile SpA.

(5) Merged with and into Despegar.com México S.A. de C.V. on January 1, 2021.

(6) Liquidated as of December 31, 2020.

Use of estimates

We use estimates and assumptions in the preparation of these consolidated financial statements in accordance with US GAAP. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of these consolidated financial statements. These estimates and assumptions also affect the reported amount of net income or loss during any period. The actual financial results could differ significantly from these estimates. The significant estimates underlying these consolidated financial statements include revenue recognition; allowance for credit expected losses; recoverability of long-lived assets, indefinite-lived intangible assets and goodwill; income and transactional taxes; loss contingencies; stock-based compensation and accounting for derivative instruments. The consolidated financial statements reflect all adjustments considered, in the opinion of management, necessary to fairly present the results for the periods presented.

Foreign currency translation

We have selected the U.S. dollar as our reporting currency. For local currency functional locations, assets and liabilities are translated at end-of-period rates while revenues and expenses are translated at average rates in effect during the period. Equity is translated at historical rates and the resulting cumulative translation adjustments are included as a component of accumulated other comprehensive income / (loss).

For U.S. dollar functional currency locations, foreign currency assets and liabilities are remeasured into U.S. dollars at end-of-period exchange rates, except for non-monetary balance sheet accounts, which are remeasured at historical exchange rates. Revenue and expenses are remeasured at average exchange rates in effect during each period, except for those expenses related to the non-monetary balance sheet amounts, which are remeasured at historical exchange rates. Gains or losses from foreign currency remeasurement are included in “Financial income / (expense), net” in our consolidated statements of income.

As from July 1, 2018, our subsidiary in Argentina changed its functional currency from Argentine Pesos to U.S. dollars due to the current highly inflationary status of the Argentine economy. A highly inflationary economy is one that has cumulative inflation of approximately 100% or more over a three-year period.

Concentration of risk

Our business is subject to certain risks and concentrations including our dependence on relationships with travel suppliers, primarily airlines and Expedia, dependence on third-party technology providers, exposure to risks associated with online commerce security and payment related fraud. We also rely on global distribution systems (“GDS”) providers and other third-party service providers for certain fulfillment services.

Financial instruments, which potentially subject the Company to concentration of credit risk, mainly consist of cash and cash equivalents and accounts receivable.

We maintain cash and cash equivalents balances in financial institutions that we believe are high credit quality. Our receivables are settled mainly through customer credit cards and debit cards. We maintain allowance for doubtful accounts based on management’s evaluation of various factors, including the credit risk of customers, historical trends and other information. See Note 9 for details.

Seasonality

We generally experience seasonal fluctuations in the demand for our travel services. The majority of our operations, such as Brazil and Argentina, are located in the Southern hemisphere where summer runs from December 1 to February 28 and winter runs from June 1 to August 31. Our most significant market in the Northern hemisphere is Mexico where summer runs from June 1 to August 31 and winter runs from December 1 to February 28. Accordingly, traditional leisure travel bookings in the Southern hemisphere are generally the highest in the second and fourth quarters of the year as travelers plan and book their winter and summer holiday travel. The number of bookings typically decreases in the first quarter of the year. In the Northern hemisphere, bookings are generally the highest in the first three quarters as travelers plan and book their spring, summer and winter holiday travel. The seasonal revenue impact is exacerbated with respect to income by the nature of variable cost of revenue and direct sales and marketing costs, which is typically realized in closer alignment to booking volumes, and the more stable nature of fixed costs.

The continued growth of international operations or a change in product mix may influence the typical trend of the seasonality in the future, and there may also be business or market driven dynamics that result in short-term impacts to revenue or profitability that differ from the typical seasonal trends.

Revenues, expenses, assets and liabilities can vary during each quarter of the year. Therefore, the results and trends in these consolidated financial statements may not be the same as those for any subsequent quarter or the full year.

Due to the COVID-19 pandemic, which led to significant cancellations for future travel during the first half of 2020 and impacted new travel bookings for the majority of 2020, we have not experienced our typical seasonal pattern for bookings, revenue and profit during the year ended December 31, 2020. In addition, with the decrease in new bookings and elevated cancellations in the merchant business model, our typical, seasonal working capital source of cash has been significantly disrupted resulting in unfavorable working capital trends and material negative cash flow since the second quarter of 2020 when we typically generate significant positive cash flow. It is difficult to forecast the seasonality for the upcoming quarters given the uncertainty related to the duration of the impact from the COVID-19 pandemic and the shape and timing of any sustained recovery. In addition, we are experiencing much shorter booking windows, which could also impact the seasonality of our working capital and cash flow.

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Summary of significant accounting policies

12 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Summary of significant accounting policies

3. Summary of significant accounting policies

Revenue recognition

We offer traditional travel services on a stand-alone and package basis generally either through the pre-pay/merchant or the pay-at-destination/agency business models. We primarily generate revenue as a result of facilitation services, either directly or through the use of affiliated travel agencies. We consider both the traveler and the travel supplier as our customers.

Under the pre-pay/merchant model, we provide travelers access to book hotel rooms, airline seats, car rentals and destination services through our contracts with our network of travel suppliers. Our travelers pay us for merchant transactions generally when they book the reservation. We pay our travel suppliers later, generally when the travelers use the travel service. Under these transactions, we generally earn a commission from travel suppliers and service fees from travelers. Travel suppliers generally bill us for travel products sold within a 12-month period from check-out date. We recognize breakage incremental revenue from unbilled amounts when the period expires. Our revenues under the pre-pay/merchant model represented more than 75% of our total consolidated revenues for all years presented.

Under the pay-at-destination/agency model, travelers pay the travel supplier directly at destination and travel suppliers pay us our earned commissions later, generally after checkout. We receive service fees from travelers up front. Our revenue under the pay-at-destination/agency model represented less than 5% of our total consolidated revenues for all years presented.

Our primary sources of revenue are commissions and service fees, incentive fees and advertising comprising more than 90% of our consolidated revenue for all years presented.    

Commissions and service fees

We facilitate our travel suppliers the sale of their travel products and services to our travelers and travel agencies. We generally receive commissions in consideration of our facilitation services. Generally, we charge a service fee to our travelers, although this may vary depending on marketing strategies. We do not provide significant post-booking services to travelers. We consider any post-booking services beyond minor inquiries or minor administrative changes to the reservation (i.e. modifications to the original terms of the reservations) as new bookings. Accordingly, we may charge a new booking fee and administrative fees for these services. Also, if the requested change results in an incremental price of the reservation to the traveler set by the travel supplier, we receive an incremental commission from the travel supplier.

We recognize revenue upon the transfer of control of the promised facilitation services to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for those facilitation services. Generally, we recognize revenue when the booking is completed, paid and confirmed, less a reserve for cancellations based on historical experience.

We present revenue on a net basis for the majority of our transactions because the travel supplier is primarily responsible for providing the underlying travel services, we do not control the service or travel product provided by the travel supplier to the traveler and we do not bear inventory risk. Taxes assessed by a government authority, if any, are excluded from the measurement of transaction prices that are imposed on the travel related services or collected from customers (which are therefore excluded from revenue). We present revenue on a gross basis for some bookings when we pre-purchase flight seats. These transactions have been limited to date.

We partner with banks to allow our travelers the possibility of purchasing the product of their choice through financing plans established, offered and administered by such banks. Banks bear full risk of fraud, delinquency or default by travelers. When travelers elect to finance their purchases, we typically receive full payment for our services within a short period of time after booking is completed and confirmed, regardless of the payment plan selected by the traveler. However, in certain countries, we receive payment from the bank as installments become due regardless of when traveler actually makes the scheduled payments. In most cases, we receive payment before travel occurs or during travel and the period between completion of booking and reception of scheduled payments is typically one year or less. We have made use of the practical expedient in ASC 606-10-32-18 and we do not adjust the amount of consideration for the effects of a significant financing component. Beginning in late August 2020, we began providing financing to certain risk-profiled travelers only in Brazil. This activity has been very limited to date.

Our revenue from commissions and service fees represented 77%, 81% and 81% of our total consolidated revenues for the years ended December 31, 2020, 2019 and 2018, respectively.

Incentive fees

We may receive incentive fees from our travel suppliers or GDS providers if we meet certain performance conditions, for example contractually agreed volume thresholds. We recognize revenue on an accrual basis in accordance with the achievement of contractual thresholds on a case-by-case basis.

Incentive fee revenues represented 13%, 14% and 15% of our total consolidated revenues for the years ended December 31, 2020, 2019 and 2018, respectively.

Advertising

We record advertising revenue ratably over the advertising period or upon delivery of advertising material, depending on the terms of the advertising agreement.

Advertising revenues represented 4%, 3% and 3% of our total consolidated revenues for the years ended December 31, 2020, 2019 and 2018, respectively.

Other revenue:

We also derive revenue from other sources. Our other sources of revenue are not material:

Destination services

In October 2020 we began offering tours, activities and transportation services to travelers through a fleet of dedicated vans. We recognize revenue as services are provided. We present revenue on a gross basis for these transactions because we are the primary responsible for providing the underlying travel services. Our destination services represented 2% of our total consolidated revenue for the year ended December 31, 2020.

Loyalty revenue

In late 2019 we began to operate a loyalty program through which we award loyalty points to travelers who complete purchases on our websites or use the services of other program participants, such bank co-branded credit cards. Loyalty points can be redeemed for free or discounted travel products.

For loyalty points earned through travel product purchases, we apply a relative selling price approach whereby the total amount collected from each travel product sale is allocated between the travel product and the loyalty points earned. The portion of each travel product sale attributable to loyalty points is initially deferred and then recognized in loyalty revenue when the points are redeemed. Due to our recent launch of our loyalty program, lack of historical data and redemption patterns, we recognize breakage when the likelihood of the traveler exercising its remaining rights becomes remote.

For loyalty points earned through co-branded credit card partners, consideration received from the sale of loyalty points is variable and payment terms typically are within 30 days subsequent to the month of sale of loyalty points. Sales of loyalty points to business partners are comprised of two components: loyalty points and marketing (i.e. the use of intellectual property, including our brand and access to customer lists and databases, which is the predominant element in the agreements, as well as advertising, collectively, the marketing component). We allocate the consideration received from these sales of loyalty points based on the relative selling price of each product or service delivered. Accordingly, we recognize the marketing component in other revenue in the period of the loyalty points sale following the sales-based royalty method. The loyalty points component is initially deferred and then recognized in revenue when points are redeemed. This activity has been limited to date.

Interest revenue

Revenue from interest earned on financing granted to certain risk-profiled customers in Brazil is recognized over the term of the financing and is based on effective interest rates. This activity has been immaterial and very limited to date.

In the aggregate, these other revenues represented 6%, 2% and 1% of our total consolidated revenues for the years ended December 31, 2020, 2019 and 2018, respectively.

Cash and cash equivalents

Cash and cash equivalents include cash on hand, deposits held with banks and other short-term liquid investments with original maturities of three months or less. Gains or losses on short-term investments are recognized in financial expenses or financial income when incurred.

Accounts receivable and allowances

Accounts receivable are generally due within thirty days and are recorded net of an allowance for expected uncollectible amounts. We consider accounts outstanding longer than the contractual payment terms as past due. The risk characteristics we generally review when analyzing our accounts receivable pools primarily include the country of origin, type of receivable, collection terms and historical or expected credit loss patterns. For each pool, we make estimates of expected credit losses for our allowance by considering a number of factors, including the length of time trade accounts receivable are past due, previous loss history continually updated for new collections data, the credit quality of our customers, current economic conditions, reasonable and supportable forecasts of future economic conditions and other factors that may affect our ability to collect from customers. The provision for estimated credit losses is recorded as “General and administrative” expenses in our consolidated statements of income. During the year ended December 31, 2020, we recorded $7,199 of incremental allowance for expected uncollectible amounts, including estimated future losses in consideration of the impact of COVID-19 pandemic on the economy and the Company. Actual future bad debt could differ materially from this estimate resulting from changes in our assumptions of the duration and severity of the impact of the COVID-19 pandemic. See Note 9 for a discussion of the adoption of ASC ASU 2016-13 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASC 326”).

Property and equipment, net

We record property and equipment at acquisition cost, net of accumulated depreciation. We compute depreciation using the straight-line method over the estimated useful lives of the assets. Land is not depreciated. We depreciate leasehold improvement using the straight-line method, over the shorter of the estimated useful life of the improvement or the remaining term of the lease.

The estimated useful lives (in years) of the main categories of our property and equipment are as follows:

Asset	Estimated useful life (years)
Computer hardware	3
Vans	4
Office furniture and fixture	10
Buildings	50

Expenditures for repairs and maintenance are charged to expense as incurred. The cost of significant renewals and improvements is added to the carrying amount of the respective asset and it is depreciated over the life of the contract.

When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in our consolidated statements of income.  

Business combinations

We use the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred, and the equity interests issued, if any. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred. We assign the value of the consideration transferred to acquire a business to the tangible assets and identifiable intangible assets acquired and liabilities assumed on the basis of their fair values at the date of acquisition. Any excess purchase price over the fair value of the net tangible and intangible assets acquired is allocated to goodwill. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets. Critical estimates in valuing certain intangible assets include but are not limited to future expected cash flows from customer relationships and trademarks and tradenames, and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.

We have a period of 12 months as from the date of acquisition (the “measurement period”) to finalize the accounting for a business combination. We report provisional amounts when the accounting for a business combination is not complete by the end of the reporting period in which the business combination occurred. Any changes to provisional amounts identified during the measurement period are recognized in the reporting period in which the adjustment amounts are determined.

Goodwill

We record goodwill as the amount by which the aggregate of the fair value of consideration transferred, the acquisition date fair value of any previously held interest and any non-controlling interest exceeds the fair value of the assets and liabilities acquired. Goodwill is not subject to amortization and is tested at least annually for impairment, or earlier if an event occurs or circumstances change and there is an indication of impairment.

See Note 13 for further information.

Intangible assets, net

Intangible assets acquired in business combinations are initially recorded at fair value. We determine the fair value of intangible assets using standard valuation techniques, including the income approach (discounted cash flows) and/or market approach, as considered appropriate, and based on market participant assumptions.

Indefinite-lived intangible assets such as certain trademarks and tradenames are not subject to amortization and are tested at least annually for impairment, or earlier if an event occurs or circumstances change and there is an indication of impairment.

Definite-lived intangible assets such as customer relationships, licenses and certain trademarks and tradenames are amortized over their respective estimated useful lives.

We also capitalize certain direct development costs associated with website and internal-use developed technology and include external direct costs of services and payroll costs for employees devoting time to the software projects principally related to platform development, including support systems, software coding, designing system interfaces and installation and testing of the software. These costs are recorded as definite-lived intangible assets and are generally amortized over a period of 3 to 10 years beginning when the asset is substantially ready for use. Costs incurred for enhancements that are expected to result in additional features or functionalities are capitalized and amortized over the estimated useful life of the enhancements. Costs incurred during the preliminary project stage, as well as maintenance and training costs, are expensed as incurred.

See Note 12 for further information.

Recoverability of goodwill and indefinite-lived intangible assets

Goodwill is assigned to reporting units that are expected to benefit from the synergies of the business combination as of the acquisition date. We assess goodwill and indefinite-lived intangible assets, neither of which is amortized, for impairment annually as of December 31, or more frequently, if events and circumstances indicate impairment may have occurred. In the evaluation of goodwill for impairment, we typically perform a quantitative assessment and compare the fair value of the reporting unit to its carrying value. An impairment charge is recorded based on the excess of the reporting unit’s carrying amount over its fair value. Periodically, we may choose to perform a qualitative assessment, prior to performing the quantitative analysis, to determine whether the fair value of the goodwill is more likely than not impaired.

We generally base our measurement of fair value of reporting units on an analysis of the present value of future discounted cash flows and market valuation approaches, as appropriate. The discounted cash flows model indicates the fair value of the reporting units based on the present value of the cash flows that we expect the reporting units to generate in the future. Our significant estimates in the discounted cash flows model include: our weighted average cost of capital; long-term rate of growth and profitability of our business; and working capital effects. The market valuation approach indicates the fair value of the business based on a comparison of the Company to comparable publicly traded firms in similar lines of business. Our significant estimates in the market approach model include identifying similar companies with comparable business factors such as size, growth, profitability, risk and return on investment and assessing comparable revenue and operating income multiples in estimating the fair value of the reporting units.

We believe the discounted cash flows and market approaches are the best methods for determining the fair value of our reporting units because these are the most common valuation methodologies used within the travel and internet industries.

In addition to measuring the fair value of our reporting units as described above, we consider the combined carrying and fair values of our reporting units in relation to our total fair value of equity plus debt as of the assessment date. Our equity value assumes our fully diluted market capitalization, using either the stock price on the valuation date or the average stock price over a range of dates around the valuation date, plus an estimated acquisition premium which is based on observable transactions of comparable companies. The debt value is based on the highest value expected to be paid to repurchase the debt, which can be fair value, principal or principal plus a premium depending on the terms of each debt instrument.

In our evaluation of our indefinite-lived intangible assets, we typically first perform a quantitative assessment and an impairment charge is recorded for the excess of the carrying value of indefinite-lived intangible assets over their fair value, if necessary. We base our measurement of fair value of indefinite-lived intangible assets, which primarily consist of trade name and trademarks, using the relief-from-royalty method. As with goodwill, periodically, we may choose to perform a qualitative assessment, prior to performing the quantitative analysis, to determine whether the fair value of the indefinite-lived intangible asset is more likely than not impaired.

Recoverability of intangible assets with definite lives and other long-lived assets

Intangible assets with definite lives and other long-lived assets are carried at cost and are amortized on a straight-line basis over their estimated useful lives of 3 to 10 years and 50 years for buildings. We review the carrying value of long-lived assets or asset groups, including property and equipment, to be used in operations whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. Factors that would necessitate an impairment assessment include a significant adverse change in the extent or manner in which an asset is used, a significant adverse change in legal factors or the business climate that could affect the value of the asset, or a significant decline in the observable market value of an asset, among others. If such facts indicate a potential impairment, we would assess the recoverability of an asset group by determining if the carrying value of the asset group exceeds the sum of the projected undiscounted cash flows expected to result from the use and eventual disposition of the assets over the remaining economic life of the primary asset in the asset group. If the recoverability test indicates that the carrying value of the asset group is not recoverable, we will estimate the fair value of the asset group using appropriate valuation methodologies which would typically include an estimate of discounted cash flows. Any impairment would be measured as the difference between the asset groups carrying amount and its estimated fair value.

Assets held for sale, to the extent we have any, are reported at the lower of cost or fair value less costs to sell.

See Notes 11 and 12 for further information.

Equity method investments

We use the equity method to account for investments in companies, if our investment provides us with the ability to exercise significant influence, but not control, over operating and financial policies of the investee. Our judgment regarding the level of influence over each equity method investment includes considering key factors such as our ownership interest, representation on the board of directors, participation in policy-making decisions and material intercompany transactions. We include the total of our investments in equity-method investees, including identifiable intangible assets, deferred tax liabilities, and goodwill, if any, within “Non-current other assets” in our consolidated balance sheets. We include our proportionate share of earnings and/or losses of our equity method investees in “Loss from equity investments” in our consolidated statements of income.

In the event that net losses of the investee reduce our equity-method investment carrying amount to zero, additional net losses may be recorded if we have committed to provide financial support to the investee. We regularly evaluate these investments, which are not carried at fair value, for other-than-temporary impairment. We also consider whether our equity-method investments generate sufficient cash flows from their operating or financing activities to meet their obligations and repay their liabilities when they come due. When our share in the net assets of associates is negative, we include the balance within “Non-current other liabilities” in our consolidated balance sheets. In the event we no longer have the ability to exercise significant influence over an equity-method investee, we would discontinue accounting for the investment under the equity method.

Redeemable non-controlling interests

We have a non-controlling interest in a majority owned entity which was valued at fair value at acquisition date. The non-controlling interest contains certain rights, whereby we have the right but not the obligation to acquire, and the minority shareholders have the right but not the obligation to sell to us, the additional shares of the company for cash at a fixed price other than fair value. The non-controlling interest is not currently redeemable, but it is probable of becoming redeemable (the redemption depends solely on the passage of time). Accordingly, we record the non-controlling interest at the greater of (i) its acquisition date fair value as adjusted for its share (if any) of earnings, losses, or dividends or (ii) an accreted value from the date of the acquisition to the earliest redemption date, February 20, 2022. The accretion of the non-controlling interest to February 20, 2022 is recorded using the interest method.

We adopted a policy to charge the carrying value adjustment to retained earnings or, absent retained earnings, additional paid-in capital and will reduce net income available to our common shareholders in the calculation of earnings per share in accordance with the two-class method. We record the non-controlling interest amount in the “mezzanine” section of our consolidated balance sheet as of December 31, 2020, outside of shareholders’ equity.

The details of the balances and changes in the redeemable non-controlling interest are presented in Note 5.

Travel accounts payable

Travel accounts payable comprises trade accounts payable to airlines, hotels and other travel suppliers for products and services offered. Airline suppliers are generally within thirty days of a confirmed air booking reservation. Under the pre-pay model, hotel suppliers are generally paid after traveler checks out. Generally, our contracts with hotels and other suppliers provide for a 12-month time period for invoicing us for past services. If an invoice is not received after that period, we recognize breakage revenue for the unbilled payable.

Severance payments

We recognize a liability for severance payments if the following criteria are met: (a) management, having the authority to approve the action, commits to a plan of termination; (b) the plan identifies the number of employees to be terminated, their job classifications or functions and their locations, and the expected completion date; (c) the plan establishes the terms of the benefit arrangement, including the benefits that employees will receive upon termination, in sufficient detail to enable employees to determine the type and amount of benefits they will receive if they are involuntarily terminated; (d) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn; and (e) the plan has been communicated to employees.

Pension information

We do not maintain any pension plans. Certain countries in which we operate provide for pension benefits to be paid to retired employees from government pension plans and/or private pension plans. Amounts payable to such plans are accounted for on an accrual basis.

Contingent liabilities

We have a number of tax, regulatory and legal matters outstanding, as discussed further in Note 21.

Periodically, we review the status of all significant outstanding matters to assess the potential financial exposure. When (i) it is probable that an asset has been impaired or a liability has been incurred and (ii) the amount of the loss can be reasonably estimated, we record the estimated loss in our consolidated statements of income. We provide disclosure in the notes to the consolidated financial statements for loss contingencies that do not meet both of these conditions if there is a reasonable possibility that a loss may have been incurred that would be material to the financial statements. Significant judgment is required to determine the probability that a liability has been incurred and whether such liability is reasonably estimable. We base accruals made on the best information available at the time which can be highly subjective. The final outcome of these matters could vary significantly from the amounts included in the accompanying consolidated financial statements.

Derivative financial instruments

We carry derivative instruments at fair value on our consolidated balance sheets. The fair values of the derivative financial instruments generally represent the estimated amounts we would expect to receive or pay upon termination of the contracts as of the reporting date. As of December 31, 2020 and 2019, our derivative instruments primarily consisted of foreign currency forward contracts. We are exposed to various market risks that may affect our consolidated results of operations, cash flows and financial position. These market risks include, but are not limited to, fluctuations in foreign currency exchange rates. Our primary foreign currency exposures are to the currencies of Argentina, Brazil and Mexico, in which we conduct a significant portion of our business activities. As a result, we face exposure to adverse movements in foreign currency exchange rates as the results of our international operations are translated from local currencies into U.S. dollars upon consolidation. Additionally, foreign currency exchange rate fluctuations on transactions denominated in currencies other than the functional currency of an entity result in gains and losses that are reflected in net income.

We use foreign currency forward contracts to economically hedge these exposures. Our goal in managing our foreign exchange risk is to reduce, to the extent practicable, our potential exposure to the changes that exchange rates might have on our earnings, cash flows and financial position. Our foreign currency forward contracts are typically short-term and, as they do not qualify for hedge accounting treatment, we classify the changes in their fair value in “Financial income / (expense), net” in our consolidated statements of income in the period that the changes occur and are classified within “Net cash provided by operating activities” in our consolidated statements of cash flows. We do not hold or issue financial instruments for speculative or trading purposes. We report the fair value of our derivative assets and liabilities on a gross basis in our consolidated balance sheets in “Other assets and prepaid expenses” and “Other liabilities”, respectively.

Leases

We determine if an arrangement is a lease, or contains a lease, at inception. Operating leases are primarily for office space, customer service centers and a fleet of dedicated vans, and, as of January 1, 2019 with the adoption of the new guidance for leasing arrangements, are included in operating lease right-of-use (“ROU”) assets, accrued expenses and other current liabilities, and operating lease liabilities on our consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

For operating leases with a term of one year or less, we have elected to not recognize a lease liability or ROU asset on our consolidated balance sheet. Instead, we recognize the lease payments as expense on a straight-line basis over the lease term. Short-term lease costs are immaterial to our consolidated statements of operations and cash flows.

Our lease agreements have insignificant non-lease components and accordingly we have elected the practical expedient to combine and account for lease and non-lease components as a single lease component.

Financial income / (expense), net

We incur in financial results such as factoring interest and commissions on receivables, gains or losses on derivative financial instruments, interest income from financial investments, interest paid on financial liabilities and foreign exchange gains or losses.

Stock-based compensation

We measure and amortize the fair value of restricted stock units (“RSUs”) and stock options as follows:

Restricted Stock Units. RSUs are stock awards that are granted to employees entitling the holder to shares of common stock as the award vests, typically over a 3 or 4-year period, but may accelerate in certain circumstances. During the year ended December 31, 2020, we started issuing RSUs as our primary form of stock-based compensation, some of them vest 33% after one year and others vest 25% after one year and will then vest yearly over the following 3 or 4 years, as appropriate. We measure the value of RSUs at fair value based on the number of shares granted and the quoted price of our common stock at the date of grant. We amortize the fair value as stock-based compensation expense over the vesting term on a straight-line basis.

Stock Options. Our employee stock options consist of service-based awards. We measure the value of stock options issued or modified, including unvested options assumed in acquisitions, if any, on the grant date (or modification or acquisition dates, if applicable) at fair value, using appropriate valuation techniques, including the Black-Scholes and Monte Carlo option pricing models. The Black-Scholes valuation models incorporate various assumptions including expected volatility, expected term and risk-free interest rates.

The expected volatility is based on historical volatility of our common stock and other relevant factors. We base our expected term assumptions on our historical experience and on the terms and conditions of the stock awards granted to employees. We amortize the fair value over the remaining explicit vesting term in the case of service-based awards. The majority of our stock options vest over 6 years.

Estimates of fair value are not intended to predict actual future events or the value ultimately realized by employees who receive these awards, and subsequent events are not indicative of the reasonableness of our original estimates of fair value.

Marketing and advertising expenses

We incur advertising expense consisting of offline costs, including television and radio advertising, and online advertising expense to promote our business. We expense the production costs associated with advertisements in the period in which the advertisement first takes place. We expense the costs of advertisement in the period during which the advertisement space or airtime is consumed. Internet advertising expenses are recognized based on the terms of the individual agreements, which is generally over the greater of (i) the ratio of the number of clicks delivered over the total number of contracted clicks, on a pay-per-click basis, or (ii) on a straight-line basis over the term of the contract. Our advertising expenses were $27,661, $147,693 and $151,372 for the years ended December 31, 2020, 2019 and 2018, respectively.

Accounting for income taxes

We are organized as a British Virgin Islands corporation. However, under the “anti-inversion” rules of Section 7874 of the U.S. Internal Revenue Code, we are treated as a U.S. corporation for U.S. federal tax purposes. Accordingly, we are subject to U.S. federal income tax on our worldwide income. We are subject to foreign income taxes in the jurisdictions where we operate in accordance with the respective local tax laws.

We account for income taxes under the asset and liability method that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in our financial statements or tax returns. Judgment is required in assessing the future tax consequences of events that have been recognized in our financial statements or tax returns. Variations in the actual outcome of these future tax consequences could materially impact our financial position, results of operations or effective tax rate.

Significant judgment is required in determining our worldwide income tax provision. In the ordinary course of a global business, there are many transactions and calculations where the ultimate tax outcome is uncertain. Some of these uncertainties arise as a consequence of revenue sharing and cost reimbursement arrangements among related entities, the process of identifying items of revenues and expenses that qualify for preferential tax treatment, and segregation of foreign and domestic earnings and expenses to avoid double taxation. Although we believe that our estimates are reasonable, the final tax outcome of these matters could be different from that which is reflected in our historical income tax provisions and accruals. Such differences could have a material effect on our income tax provision and net income in the period in which such determination is made.

In estimating future tax consequences, all expected future events are considered other than enactments of changes in tax laws or rates. Valuation allowances are established when necessary to reduce deferred tax assets to amounts which are more likely than not to be realized. We consider future growth, forecasted earnings, future taxable income, the mix of earnings in the jurisdictions in which we operate, historical earnings, the carryforward periods available for tax reporting purposes and prudent and feasible tax planning strategies in determining the need for a valuation allowance. In the event we were to determine that we would not be able to realize all or part of our net deferred tax assets in the future, an adjustment to the deferred tax assets valuation allowance would be charged to earnings in the period in which we make such a determination, or goodwill would be adjusted at our final determination of the valuation allowance related to an acquisition within the measurement period. If we later determine that it is more likely than not that the net deferred tax assets would be realized, we would reverse the applicable portion of the previously provided valuation allowance as an adjustment to earnings at such time.

The amount of income tax we pay is subject to ongoing audits by federal, state and foreign tax authorities, which often result in proposed assessments. Our estimate of the potential outcome for any uncertain tax issue is highly judgmental. We account for these uncertain tax issues pursuant to ASC 740, Income Taxes, which contains a two-step approach to recognizing and measuring uncertain tax positions taken or expected to be taken in a tax return. The first step is to determine if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. Although we believe we have adequately reserved for our uncertain tax positions, no assurance can be given with respect to the final outcome of these matters. We adjust reserves for our uncertain tax positions due to changing facts and circumstances, such as the closing of a tax audit, judicial rulings, refinement of estimates or realization of earnings or deductions that differ from our estimates. To the extent that the final outcome of these matters is different than the amounts recorded, such differences generally will impact our provision for income taxes in the period in which such a determination is made. Our provisions for income taxes include the impact of reserve provisions and changes to reserves that are considered appropriate and also include the related interest and penalties.

We treat taxes on global intangible low-taxed income (“GILTI”) introduced by the U.S. Tax Cuts and Jobs Act (the “Tax Act”) as period costs.

See Note 19 for further information.

Earnings per share

We compute basic earnings per share by dividing our net loss or income for the year attributable to Despegar.com, Corp. common shareholders, as adjusted for preferred stock accretion and dividends accrued, by our weighted-average outstanding common shares during the year on a basic and diluted basis. Since we issue warrants for nominal consideration which vest and are exercisable as from the issuance date, we include the shares of common stock underlying the outstanding warrants when calculating our basic earnings per share.

We compute diluted earnings per share using our weighted-average outstanding common shares including the dilutive effect of stock options and convertible preferred stock as determined under the if-converted method. In periods when we recognize a net loss, we exclude the impact of outstanding stock awards and convertible preferred stock from the diluted loss per share calculation as their inclusion would have an antidilutive effect.

We present basic and diluted earnings per share using the two-class method required for participating securities. We consider that our Series B preferred stock to be participating securities and, in accordance with the two-class method, earnings allocated to participating securities and the related number of outstanding shares of participating securities are excluded from the computation of basic and diluted net loss per common share. If a dividend is paid on common stock, the holders of Series B preferred stock are entitled to a proportionate share of any such dividend as if they were holders of common stock (on an if-converted basis). As the holders of our Series B preferred stock do not have contractual obligation to share in the losses of the Company, the net loss attributable to common stockholders for each period is not allocated between common stock and participating securities. Accordingly, preferred stock is excluded from the calculation of basic and diluted net loss per share as the effect would have been antidilutive.

For additional information on how we compute earnings per share, see Note 24.

Fair value recognition, measurement and disclosure

The carrying amounts of cash and cash equivalents and restricted cash reported on our consolidated balance sheets approximate fair value as we maintain them with various high-quality financial institutions. The accounts receivable are short-term in nature and are generally settled shortly after the sale.

We disclose the fair value of our financial instruments based on the fair value hierarchy using the following three categories:

Level 1 — Valuations based on quoted prices for identical assets and liabilities in active markets.

Level 2 — Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3 — Valuations based on unobservable inputs reflecting the Company’s own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

For additional information on items measured at fair value on a recurring or non-recurring basis, see Note 23.

Recently adopted accounting policies

Simplifying the Test for Goodwill Impairment

In January 2017, the Financial Accounting Standards Board (“FASB”) issued a new accounting update to simplify the test for goodwill impairment. The revised guidance eliminates the previously required step two of the goodwill impairment test, which required a hypothetical purchase price allocation to measure goodwill impairment. Under the revised guidance, a goodwill impairment loss will be measured at the amount by which a reporting unit’s carrying amount exceeds its fair value, not to exceed the carrying amount of goodwill. In addition, income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. The amendments also eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. We adopted and applied this update in the first quarter of 2020.

Measurement of Credit Losses on Financial Instruments

In June 2016, the FASB issued a new accounting update on the measurement of credit losses for certain financial assets measured at amortized cost and available-for-sale debt securities. For financial assets measured at amortized cost, this update requires an entity to (1) estimate its lifetime expected credit losses upon recognition of the financial assets and establish an allowance to present the net amount expected to be collected, (2) recognize this allowance and changes in the allowance during subsequent periods through net income and (3) consider relevant information about past events, current conditions and reasonable and supportable forecasts in assessing the lifetime expected credit losses. We adopted this update in the first quarter of 2020 and applied it on a modified retrospective basis. The adoption did not have a material impact on our consolidated financial statements. See Note 9 for details of the adoption of the new standard.

Disclosure requirements on fair value measurements

In August 2018, the FASB issued ASU 2018-13 “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement”. The update is related to the disclosure requirements on fair value measurements, which removes, modifies or adds certain disclosures. We adopted this update in the first quarter of 2020 and applied it on a prospective basis. The adoption did not have a material impact on our consolidated financial statements.

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract

In August 2018, the FASB issued a new accounting standard to address a customer’s accounting for implementation costs incurred in a cloud computing arrangement that is a service contract and also added certain disclosure requirements related to implementation costs incurred for internal-use software and cloud computing arrangements. The amendment aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). We adopted this update in the first quarter of 2020 and applied it on a prospective basis. The adoption did not have a material impact on our consolidated financial statements.

Recent accounting policies not yet adopted

Simplifying the Accounting for Income Taxes

In December 2019, the FASB issued a new accounting update relating to income taxes. This update provides an exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. This update also (1) requires an entity to recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax, (2) requires an entity to evaluate when a step-up in the tax basis of goodwill should be considered part of the business combination in which goodwill was originally recognized for accounting purposes and when it should be considered a separate transaction, and (3) requires that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. For public business entities, this update is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. The amendment related to franchise taxes that are partially based on income should be applied on either a retrospective basis for all periods presented or a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. All other amendments should be applied on a prospective basis. We have evaluated the impact to our consolidated financial statements of adopting this update and we do not expect it to have a material impact.

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Acquisitions

12 Months Ended

Dec. 31, 2020

Temporary Equity Disclosure [Abstract]

Acquisitions

4. Acquisitions

2020 Acquisition Activity

During the year ended December 31, 2020, we completed two business combinations, as follows:

Acquisition of Best Day Group

On October 1, 2020 (the “Closing Date”), we consummated the acquisition of the 100% equity interests of Viajes Beda and Transporturist, both companies organized under the laws of Mexico (collectively the “Acquisition”), pursuant to an Amended and Restated Stock Purchase Agreement dated June 11, 2020, as further amended on September 9, 2020 (the “Acquisition Agreement”). Viajes Beda primarily operates in Mexico and to a lesser extent in South America, including Argentina, Brazil and Uruguay among others, and the United States. Transporturist primarily operates in Mexico. Viajes Beda and Transporturist are collectively referred to as the “Best Day Group”.

The Best Day Group primarily provides travelers with several product offerings, including airline tickets, packages, hotels and other travel-related products, through its online platforms, call centers and offline presence, and provides travel suppliers a technology platform for managing the distribution of their travel products and access to traveler customers. The Best Day Group also provides ground transportation services and group tours to travelers principally across the main tourist destinations in Mexico and the Dominican Republic. The Best Day Group offers these travel products and services through its brands “Best Day” and “BD Experience”. In addition, the Best Day Group offers hotel inventory, as well as transfers, activities, car rental, packages and tours to travel agencies through its tradename “HotelDo”. Also, the Best Day Group provides white label services for major travel vendors, including exclusive partnerships with the largest Mexican airlines operating their packages platforms.

The purchase price was fixed at $10,288 after application of net indebtedness and working capital adjustments and will be payable in cash on October 1, 2023. In addition, the Acquisition Agreement provides for an earnout for the benefit of certain sellers ranging from $0 to $20,000 based solely on the performance of our share price during a measurement period of six months prior to the fourth anniversary of the Closing Date. The earnout, if any, will be payable in cash on October 1, 2024.

Under the Acquisition Agreement, the sellers contractually agreed to indemnify us for certain contingencies and uncertain tax positions. We recognized and measured the seller indemnification based on the same basis as the indemnified items. Indemnified items are partially covered by a fixed amount of $10,288 plus any amount payable under the contingent consideration agreement. Changes in the amount recognized for the seller indemnification which are not the result of qualifying measurement-period adjustments, are recognized in earnings in the same period as changes in the indemnified items are recognized. See Note 10.

We have made a preliminary allocation of the estimated purchase price to the tangible and intangible assets acquired and liabilities assumed based on their fair values at acquisition date. The preliminary estimated fair value of assets acquired and liabilities assumed was determined with the assistance of a third-party valuer. Goodwill was recognized as the excess of the aggregate of the fair values of consideration transferred over the fair value of assets acquired and liabilities assumed. We have made significant assumptions and estimates in determining the preliminary estimated purchase price, including the contingent consideration comprising a portion of the total consideration, and the preliminary allocation of the estimated purchase price in these consolidated financial statements. The acquisition accounting is dependent upon certain valuations and other studies that have yet to progress to a stage where there is sufficient information for a definitive measurement. Therefore, these preliminary estimates and assumptions are subject to change during the measurement period as we finalize the valuations of the net intangible and tangible assets. The final allocation may include changes to (1) the fair values of property and equipment; (2) the fair values of customer relationships and off-market components of certain contracts; (3) the recognized amounts of contingencies and liabilities for unrecognized tax benefits; and (4) assets and liabilities, as more information becomes available.

These final valuations may change significantly from our preliminary estimates. Differences between these preliminary estimates and the final acquisition accounting could have a material impact on these consolidated financial statements and our consolidated future results of operations and financial position. We expect to finalize the purchase price allocation during the second quarter ended June 30, 2021.

The following table summarizes the estimated preliminary purchase price:

Consideration:
Fair value of purchase price payable on October 1, 2023		8,642
Fair value of contingent consideration payable on October 1, 2024		1,526
Total consideration as of acquisition date	$	10,168
Recognized amounts of assets acquired and liabilities assumed:
Cash and cash equivalents		5,404
Restricted cash		2,763
Trade accounts receivable, net of credit expected loss		9,122
Related party receivable		2,337
Lease right-of-use assets		7,415
Property and equipment, net		8,836
Intangible assets, net		51,758
Deferred tax assets		12,851
Seller indemnification		11,814
Other assets and prepaid expenses		33,446
Total assets acquired	$	145,746
Accounts payable and accrued expenses		7,948
Travel accounts payable		82,170
Related party payable		266
Short-term and long-term debt		10,618
Lease liabilities		7,955
Contingent liabilities (1)		22,436
Deferred revenue		775
Taxes payable (2)		29,573
Deferred tax liabilities		11,015
Promissory notes issued (3)		13,928
Other liabilities		16,534
Total liabilities assumed	$	203,218
Total net liabilities assumed	$	57,472
Goodwill	$	67,640

(1) Includes $17,933 of identified acquisition-date probable contingencies related to non-income tax and $4,503 of identified acquisition-date probable contingencies related to social security and other matters. Amount reflects the best estimate of probable outcome. See Note 21.

(2) Includes a liability of $28,955 for acquisition-date unrecognized tax benefits related to uncertain tax positions taken by the acquiree prior to our acquisition. See Note 19.

(3) As part of the Acquisition Agreement, we legally assumed a debt that the acquired companies had with its previous shareholders. We issued four promissory notes for an aggregate nominal amount of $14,323 (which fair value was $13,928 as of the date of acquisition). The notes accrue interest at a fixed rate of 5% per annum and will be payable in cash on October 1, 2023.

Intangible assets acquired consisted of the following:

	Amount		Estimated useful life (years)
Trademarks		13,299		20
Domains		204		20
Developed technology		8,206		2.5
Licenses		634		1.3
Customer relationships		29,415		7
Total intangible assets acquired	$	51,758

The useful lives of the intangible assets for amortization purposes was determined considering the period of expected cash flows used to measure the fair value of the intangible assets adjusted as appropriate for the entity-specific factors including legal, regulatory, contractual, competitive, economic or other factors that may limit the useful life of intangible assets.

We used an income approach to measure the fair value of trademarks based on the relief-from-royalty method. The relief-from-royalty valuation method estimates the benefit of ownership of the intangible asset as the “relief” from the royalty expense that would need to be incurred in absence of ownership.

We used a market approach to measure the fair value of domains.

We used a cost approach to measure the fair value of developed technology based on the reproduction cost method, adjusted by a functional obsolescence factor. An additional cross-check analysis based on income approach has also been performed.

We used a replacement cost method to measure the fair value of licenses.

We used an income approach to measure the fair value of customer relationships based on the Multi-Period Excess Earnings Method. The excess earnings look at projected discounted cash flows of the customer relationships, considering estimated attrition rates. These fair value measurements were based on significant inputs not observable in the market and thus represent Level 3 measurements under the fair value hierarchy.

We used a replacement cost method or a market approach, as appropriate, to measure the fair value of fixed assets.

We measure the fair value of the earnout payment using a series of “digital options”. We believe this methodology can be applied because our earnout payment provides for a fixed payment to the sellers if our stock price exceeds a predetermined strike price during the earnout measurement period. In the application of this methodology, we performed a valuation in a risk neutral framework, using a Black-Scholes-Merton Digital call option formula. The significant inputs used were our share price as of the valuation date, our share price historical volatility, U.S. risk free rate, estimated term and credit-risk adjustment spread.

All other net tangible assets were valued at their respective carrying amounts, as we believe that these amounts approximate their current fair values.

A decrease in the fair value of assets acquired, or an increase in the fair value of liabilities assumed, from those preliminary valuations would result in a dollar-for-dollar corresponding increase in the amount of goodwill that will result from the Acquisition. In addition, if the value of the acquired assets is higher than the preliminary values above, it may result in higher depreciation and amortization expense.

Goodwill was primarily attributable to the synergistic value created from the opportunity for additional expansion in Mexico and other businesses where we did not have a presence and is non-deductible for tax purposes.

We incurred $2,856 and $617 of acquisition-related expenses which were included in “General and administrative” expenses in our consolidated statements of income for the years ended December 31, 2020 and 2019, respectively. We report the results of operations of the acquired business within our two reportable segments.

The following table summarizes the revenue and net loss (including purchase accounting amortization and the impact of intercompany eliminations) of the Best Day Group included in our consolidated statements of income for the year ended December 31, 2020 since October 1, 2020, the date of acquisition:

	Period from the date of acquisition to December 31, 2020
Revenue	$	14,125
Net loss	$	(14,983	)

The following pro forma summary presents certain consolidated information as if the acquisition of the Best Day Group had occurred on January 1, 2019:

	For the years ended December 31,
	2020			2019
Revenue	$	165,122		$	658,147
Net loss	$	(242,261	)	$	(38,241	)

These pro forma results include adjustments for purposes of consolidating the historical financial results of the Best Day Group for the periods indicated. These pro forma results also include $5,034 and $6,712 for the years ended December 31, 2020 and 2019, respectively, to reflect the incremental depreciation and amortization as a result of recording property and equipment and intangible assets at fair value. These pro forma results do not represent financial results that would have been realized had the acquisition actually occurred on January 1, 2019, nor are they intended to be a projection of future results.

Acquisition of Koin

On August 20, 2020, we completed the acquisition of an 84% equity interest in Koin Administradora de Cartões e Meios de Pagamentos S.A., a company incorporated under the laws of Brazil (“Koin”). Koin is a payment fintech which offers a financing solution to merchants’ customers, predominantly in the travel sector in Brazil.

We effected the acquisition through conversion of an outstanding trade receivable we had with Koin for $977 as of the acquisition date. The former owners remained as non-controlling shareholders of a 16% equity interest in Koin.

As part of the acquisition, we and the non-controlling shareholders entered into a Shareholders’ Agreement under which we have the option, but not the obligation, to purchase the non-controlling interest during a period of 36 months as from the acquisition date at a fixed price of $4,320. In addition, the non-controlling shareholders have the option, but not the obligation, to sell their shares back to us during a period commencing on February 20, 2022 and ending August 21, 2023 for a fixed price in cash of $2,880.

We allocated the purchase price to identifiable tangible and intangible assets acquired and liabilities assumed, and redeemable non-controlling interest based on their fair values at acquisition date. Goodwill was recognized as the excess of the aggregate of the fair values of consideration transferred and the redeemable non-controlling interest over the fair value of assets acquired and liabilities assumed. The acquisition date fair value of the redeemable non-controlling interest was estimated at $2,655, which was calculated using an option pricing model and generally reflected the net present value of the expected future fixed redemption amount. Intangible assets include $593 allocated to trademarks and $150 allocated to developed technology.

In determining the fair value of assets acquired and liabilities assumed, we primarily used discounted cash flow analyses. Inputs to the discounted cash flow analyses and other aspects of the allocation of purchase price require judgment. The more significant inputs used in the discounted cash flow analyses and other areas of judgment include projected revenues, costs and expenses, working capital, capital expenditures and discount rate.

Goodwill was primarily attributable to the assembled workforce of Koin and synergistic value created from the opportunity for additional expansion and is not deductible for tax purposes.

The following table presents the final purchase price allocation as of December 31, 2020:

Consideration:
Fair value of purchase price	$	977
Redeemable non-controlling interest:	$	2,655
Recognized amounts of assets acquired and liabilities assumed:
Cash and cash equivalents		322
Restricted cash		4
Trade accounts receivable, net of credit expected loss		1,194
Lease right-of-use assets		177
Property and equipment, net		99
Intangible assets, net		743
Other assets and prepaid expenses		66
Total assets acquired	$	2,605
Accounts payable and accrued expenses		1,721
Short-term debt		1,250
Lease liabilities		178
Contingent liabilities		19
Taxes payable		684
Deferred tax liabilities		253
Other liabilities		479
Total liabilities assumed	$	4,584
Total net liabilities assumed	$	1,979
Goodwill	$	5,611

We report the results of operations of the acquired business within our two reportable segments. Transaction related expenses during the year ended December 31, 2020 associated with the completion of the acquisition totaled $279 and were charged to “General and administrative” expenses in our consolidated statements of income.

The pro forma effects of this acquisition would not materially impact our reported results for any period presented, and as a result no pro forma financial information is presented. During the period from acquisition through December 31, 2020, the business contributed revenue of $138 and a net loss of $1,786.

2019 Acquisition Activity

During the year ended December 31, 2019, we completed one business combination, as follows:

Acquisition of Viajes Falabella

On June 7, 2019, we obtained the regulatory approvals and obtained control of the outstanding capital stock of Viajes Falabella Argentina, Viajes Falabella Chile and Viajes Falabella Peru. The acquisition of Viajes Falabella Colombia was completed on July 31, 2019, after the regulatory approvals were obtained. We refer to the acquired entities collectively as “Viajes Falabella”. We acquired the Viajes Falabella entities from Grupo Falabella. The Viajes Falabella entities are engaged in the travel agency business through their online and offline presence. The acquisition purchase price totaled $23,000, of which we paid $11,500 in cash at the acquisition date, $5,750 in June 2020 and $5,750 will be paid in June 2021.

Concurrent with the acquisition, we entered into a 10-year commercial agreement with Grupo Falabella which provides for several marketing and promotional activities and other activities to promote future business. The agreement also provides for the use of the Viajes Falabella brand in Argentina, Chile, Peru and Colombia for an initial period of 4 years, renewable for one-year periods at our option. We account for the use of the brand as a prepaid asset and amortizes it under the straight-line basis over the term of the contract.

We acquired Viajes Falabella and entered into the commercial agreement to enhance our position as a leading travel agency providing customers with an enhanced travel and tourism product and service offerings through online, call center and physical stores.

We allocated the purchase price to identifiable tangible and intangible assets acquired and liabilities assumed based on their fair values. Goodwill was recognized as the excess of the aggregate of the fair values of consideration transferred over the fair value of assets acquired and liabilities assumed. In determining the fair value of assets acquired and liabilities assumed, we primarily used discounted cash flow analyses. Inputs to the discounted cash flow analyses and other aspects of the allocation of purchase price required judgment. The more significant inputs used in the discounted cash flow analyses and other areas of judgment include (i) future revenue growth or attrition rates (ii) projected margins (iii) discount rates used to present value future cash flows (iv) the amount of synergies expected from the acquisition and (v) the economic useful life of assets, among others.

The following table presents the final purchase price allocation as of December 31, 2019 and the reconciliation with “Payments for acquired business, net of cash acquired” line item in our consolidated statements of cash flows for the year ended December 31, 2019:

Consideration:
Fair value of purchase price	$	22,196
Recognized amounts of assets acquired and liabilities assumed:
Cash and cash equivalents		11,272
Trade accounts receivable, net of credit expected loss		11,828
Other assets and prepaid expenses		34,611
Property and equipment, net		2,420
Intangible assets, net		3,663
Total assets acquired	$	63,794
Travel accounts payable		36,656
Other liabilities		15,807
Total liabilities assumed	$	52,463
Total net assets acquired	$	11,331
Goodwill	$	10,865

Intangible assets primarily consisted of customer relationships, with a weighted average useful life of 3.7 years.

Goodwill was primarily attributable to the synergistic value created from the opportunity for additional expansion in the off-line channel and is not deductible for tax purposes.

We incurred $464 of acquisition-related expenses which were included in “General and administrative” expenses in our consolidated statements of income for the year ended December 31, 2019. We report the results of operations of the acquired business within our two reportable segments.

The following table summarizes the revenues and net loss (including purchase accounting amortization and the impact of intercompany eliminations) of Viajes Falabella included in our consolidated statements of income for the year ended December 31, 2019 since the date of acquisition:

	Period from the date of acquisition to December 31, 2019
Net revenue	$	20,710
Net loss	$	(3,060	)

The following pro forma summary presents certain consolidated information as if the acquisition of Viajes Falabella had occurred on January 1, 2018:

	For the years ended December 31,
	2019			2018
Net revenue	$	532,710		$	584,986
Net (loss) / income	$	(20,872	)	$	19,770

These pro forma results include adjustments for purposes of consolidating the historical financial results of Viajes Falabella for the periods indicated. These pro forma results also include $757 and $757 for the years ended December 31, 2019 and 2018, respectively, to reflect the incremental depreciation and amortization as a result of recording property and equipment and intangible assets at fair value. These pro forma results do not represent financial results that would have been realized had the acquisition actually occurred on January 1, 2018, nor are they intended to be a projection of future results.

2018 Acquisition Activity

We have not completed any business combinations during the year ended December 31, 2018.

XML

Redeemable non-controlling interest

12 Months Ended

Dec. 31, 2020

Temporary Equity Disclosure [Abstract]

Redeemable non-controlling interest

5. Redeemable non-controlling interest

In connection with the acquisition of the 84% controlling interest in Koin on August 20, 2020 (see Note 4 for details), we recognized $2,655 for the 16% redeemable non-controlling interest held by the former owners. The terms of the agreement provide us with the right to call the former owners’ non-controlling interest in Koin, and the former owners the right to put their non-controlling interests in Koin back to us, assuming we do not exercise our call right, at dates and prices defined in the agreement. The put price is fixed at $2,880.

The non-controlling interest is not currently redeemable, but it is probable of becoming redeemable (the redemption depends solely on the passage of time). Accordingly, we record the non-controlling interest at the greater of (i) its acquisition date fair value as adjusted for its share (if any) of earnings, losses, or dividends or (ii) an accreted value from the date of the acquisition to the earliest redemption date, February 20, 2022. The accretion of the non-controlling interest to the earliest redemption value is recorded using an interest method. We adopted a policy to charge the carrying value adjustment to retained earnings or, absent retained earnings, additional paid-in capital and will reduce net income available to our common shareholders in the calculation of earnings per share in accordance with the two-class method. We record the non-controlling interest amount in the “mezzanine” section of our consolidated balance sheet as of December 31, 2020, outside of shareholders’ equity.

During the period from acquisition through December 31, 2020 there was a $78 adjustment to reflect a redemption value in excess of carrying value. See Note 24.

Reconciliation of changes in redeemable non-controlling interests

Beginning balance as of January 1, 2020	$	—
Initial fair value of redeemable non-controlling interest of acquired businesses		2,655
Comprehensive loss adjustments:
Net loss attributable to redeemable non-controlling interest		(282	)
Other comprehensive loss attributable to redeemable non-controlling interest		170
Additional paid-in-capital adjustments:
Adjustment to redemption value		78
Ending balance as of December 31, 2020	$	2,621

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Preferred Stock and warrants

12 Months Ended

Dec. 31, 2020

Redeemable Preferred Stock And Warrants [Abstract]

Preferred Stock and warrants

6. Preferred Stock and Warrants

Non-Convertible Redeemable Series A Preferred Shares and Warrants

On September 18, 2020 (the “Catterton Closing Date”), we completed the issuance and sale of our Series A Preferred Shares (as defined below) and warrants (the “Warrants”) to purchase our common stock (“Common Stock”) to LCLA Daylight LP, an affiliate of L Catterton Latin America III, L.P. (the “L Catterton Purchaser”) pursuant to our previously announced Investment Agreement, dated as of August 20, 2020, with the L Catterton Purchaser (the “L Catterton Investment Agreement”).

We issued and sold to the L Catterton Purchaser, pursuant to the L Catterton Investment Agreement, 150,000 shares of our newly created Series A Preferred Shares, no par value per share (the “Series A Preferred Shares”) and Warrants to purchase 11,000,000 shares of our Common Stock, no par value, for an aggregate purchase price of $150,000.

At closing, we paid certain fees in an aggregate amount of $2,250 to the L Catterton Purchaser.

On the terms and subject to the conditions set forth in the L Catterton Investment Agreement, from and after September 18, 2020, LCLA Daylight LP is entitled to appoint one director to our Board of Directors (the “Board”) and one non-voting observer to the Board, in each case until such time as LCLA Daylight LP and its permitted transferees no longer hold (a) (i) at least 50% of the Series A Preferred Shares purchased by LCLA Daylight LP under the L Catterton Investment Agreement and (ii) Warrants and/or Common Stock for which the Warrants were exercised that represent, in the aggregate and on an as-exercised basis, at least 50% of the shares underlying the Warrants purchased by LCLA Daylight LP under the L Catterton Investment Agreement or (b) if the Company has redeemed the Series A Preferred Shares in full (pursuant to the Company’s redemption right with respect thereto), Warrants and/or Common Stock for which the Warrants were exercised that represent, in the aggregate and on an as-exercised basis, at least 50% of the shares underlying the Warrants purchased by LCLA Daylight LP under the L Catterton Investment Agreement.

The L Catterton Investment Agreement (including the forms of our amended Memorandum of Association and Articles of Association, the terms of the Series A Preferred Shares, Warrants and Registration Rights Agreement) contains other customary covenants and agreements, including certain transfer restrictions, standstill and voting provisions and preemptive rights.

In connection with and concurrently with the closing of the transactions contemplated by the L Catterton Investment Agreement, we issued to LCLA Daylight LP Warrants to purchase 11,000,000 shares of our Common Stock at an exercise price of $0.01 per share, subject to certain customary anti-dilution adjustments provided under the Warrants, including for stock splits, reclassifications, combinations and dividends or distributions made by us on the Common Stock. The Warrants expire on September 18, 2030.

In connection with and concurrently with the closing of the transactions contemplated by the L Catterton Investment Agreement, we and LCLA Daylight LP entered into a Registration Rights Agreement (the “Registration Rights Agreement”), pursuant to which LCLA Daylight LP is entitled to customary registration rights with respect to the Common Stock for which the Warrants may be exercised.

Principal Terms of the Series A Preferred Shares

Dividends:

Dividends on each Series A Preferred Share accrue daily at a rate of 10.0% per annum and are payable semi-annually in arrears on September 30 and March 31, beginning on March 31, 2021. Dividends are payable, either in cash or through an accrual of unpaid dividends (“Dividend Accrual”), at the Company’s option. Dividends on each Series A Preferred Share accrue whether or not declared and whether or not we have assets legally available to make payment thereof. To the extent that any dividends are declared but unpaid, or any dividends are not declared in any given year, (i) such accrued and unpaid dividends and/or (ii) an amount equal to the dividend entitlement, shall compound semi-annually at the rate of 10.0% per annum (“Accumulating Dividends”). All Accumulating Dividends shall be paid in full prior to any distribution, dividend or other payment in respect of any equity securities junior to the Series A Preferred Shares.

Ranking:

The Series A Preferred Shares rank senior to the Common Stock with respect to dividend rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company.

Company’s Redemption Rights:

At any time on or after the third anniversary of the Catterton Closing Date but prior to the fourth anniversary of the Catterton Closing Date, we may redeem all or any portion of the Series A Preferred Shares in cash at a price equal to 105.0% of the sum of the liquidation preference of $1,000 per Series A Preferred Share plus any Dividend Accruals per Series A Preferred Share (the “Liquidation Preference”), plus, without duplication, accrued and unpaid distributions to, but excluding, the redemption date. At any time on or after the fourth anniversary of the Catterton Closing Date but prior to the fifth anniversary of the Catterton Closing Date, we may redeem all or any portion of the Series A Preferred Shares in cash at a price equal to 102.5% of the Liquidation Preference, plus, without duplication, accrued and unpaid distributions to, but excluding, the redemption date. At any time after the fifth anniversary of the Catterton Closing Date, we may redeem all or any portion of the Series A Preferred Shares in cash at a price equal to the Liquidation Preference plus, without duplication, accrued and unpaid distributions to, but excluding, the redemption date.

Holders’ Redemption Rights:

At any time on or after the fifth anniversary of the Catterton Closing Date, each holder of Series A Preferred Shares may, at its election, cause the Company to redeem all or part of such holder’s then outstanding Series A Preferred Shares in cash at a price equal to the Liquidation Preference, plus, without duplication, accrued and unpaid distributions to, but excluding, the redemption date. In addition, if the Company undergoes a qualifying change of control, each holder of Series A Preferred Shares may, at its election, cause the Company to redeem all of such holder’s then outstanding Series A Preferred Shares in cash at a price equal to 110.0% of the Liquidation Preference, plus, without duplication, accrued and unpaid distributions to, but excluding, the redemption date.

Conversion Rights:

The Series A Preferred Shares are not convertible into Common Stock.

Voting Rights:

Each holder of Series A Preferred Shares will have one vote per share on any matter on which holders of Series A Preferred Shares are entitled to vote separately as a class, whether at a meeting or by written consent. The holders of Series A Preferred Shares do not otherwise have any voting rights at any meetings of the Company’s shareholders or on any resolution of the Company’s shareholders.

The prior written approval of the holders of a majority of the Series A Preferred Shares outstanding at such time, acting together as a separate class, is required in order for the Company to (i) amend the Memorandum and Articles of Association in a manner that adversely affects the holders of Series A Preferred Shares, (ii) create or issue any shares, or any securities convertible or exchangeable into, or exercisable for shares, ranking senior or pari passu to the Series A Preferred Shares or issue any additional Series A Preferred Shares or increase the authorized number of Series A Preferred Shares, other than an additional financing meeting certain requirements, (iii) declare or pay any dividend or distribution, or repurchase or redeem any shares, subject to certain exceptions, including with respect to the Series A Preferred Shares, (iv) make any fundamental change in the nature of the business in which the Company is primarily engaged, (v) initiate, engage in or permit to occur (to the extent within our control), any liquidation, dissolution or winding up of the Company, (vi) continue or re-domicile the Company in any jurisdiction other than the British Virgin Islands, or (vii) take or permit certain of the foregoing with respect to our significant subsidiaries.

So long as the Catterton Purchaser holds any Series A Preferred Shares, the prior written consent of the Catterton Purchaser is required in order for us to (i) incur any indebtedness for borrowed money in excess of the greater of $60,000, and an amount equal to 1.0x the Company’s consolidated Adjusted EBITDA for the twelve month period ending at the end of the last quarter for which we have publicly reported financial results, (ii) sell, dispose of or enter into any exclusive license for any material asset (or group of related assets) of the Company or with a fair market value equal or greater to 10% of our consolidated total assets and (iii) enter into certain affiliate transactions, in each case subject to certain exceptions.

Pursuant to the L Catterton Investment Agreement, on September 18, 2020, Mr. Dirk Donath was appointed as a member of the Board and Mr. Ramiro Lauzan was appointed as a non-voting observer. Mr. Donath has also been appointed to serve on the Strategy Committee and Nomination and Compensation Committee of the Board.

Principal Terms of the Warrants to Purchase Common Stock

Pursuant to the L Catterton Investment Agreement, we issued to the Catterton Purchaser Warrants to purchase 11,000,000 Common Shares at an exercise price of $0.01 per share (“Penny Warrants”), subject to certain customary anti-dilution adjustments provided under the Warrants, including for stock splits, reclassifications, combinations and dividends or distributions made by the Company on the Common Shares. The Penny Warrants expire ten years after the Catterton Closing Date.

The Penny Warrants vest and are exercisable as of the issuance date.

The Penny Warrants also include customary anti-dilution adjustments.

Initial and Subsequent Accounting:

The Series A Preferred Shares are classified within temporary equity on our consolidated balance sheet as of December 31, 2020 due to the provisions that could cause the equity to be redeemable at the option of the holder and the terms of the Series A Preferred Shares which do not include an unconditional obligation to redeem at a specified or determinable date, or upon an event certain to occur. The Penny Warrants qualify for classification in stockholders’ equity and are included in our consolidated balance sheet as of December 31, 2020 within “Additional paid-in capital”.

As indicated above, if a qualifying change of control occurs, then each holder of Series A Preferred Shares may, at its election, cause the Company to redeem all of such holder’s then outstanding Series A Preferred Shares in cash at a price equal to 110.0% of the Liquidation Preference, plus, without duplication, accrued and unpaid distributions to, but excluding, the redemption date (the “Change of Control Put”). There is a substantial premium as the Company is required to pay 110.0% upon a change of control. The Change of Control Put requires bifurcation. However, it is uncertain whether or when a qualifying change of control would occur that would obligate the Company to pay the substantial premium liquidation preference to holders of the Series A Preferred Shares and at the balance sheet date, these circumstances were not probable. Thus, no value was assigned at inception. A subsequent adjustment to the carrying value of the Series A Preferred Shares may be made only when it becomes probable that such a change of control event will occur.

The gross proceeds received from the issuance of the Series A Preferred Shares were allocated to the Series A Preferred Shares and Warrants on a relative fair value basis.

In determining the fair value of the Series A Preferred Shares, we primarily used discounted cash flow analyses. Inputs to the discounted cash flow analyses and other aspects of the valuation require judgment. The more significant inputs used in the discounted cash flow analyses and other areas of judgment include assumptions on term, cash flows, and market yield.

In determining the fair value of the Warrants, we primarily used the Black Scholes Option Pricing Model (“BSOPM”). Inputs to the BSOPM and other aspects of the valuation require judgment. The more significant inputs used in the BSOPM and other areas of judgment include the starting stock price or value of the underlying assets, the strike price, the time to expiration, and volatility and risk-free rate. In order to consider the two-year transfer restriction of the Warrants, considered to be security specific, we applied a Discount for Lack of Marketability with the Finnerty Method.

Therefore, the Series A Preferred Shares were initially recognized at an allocated amount on a fair value basis of $84,643, net of $5,415 in initial discount and issuance costs. The Penny Warrants were recognized at an allocated amount on a fair value basis of $56,339, net of $3,604 in issuance costs. Penny Warrants were recorded as additional paid-in capital.

The Series A Preferred Shares are not redeemable at December 31, 2020; however, they will become redeemable on September 18, 2025. Since only the passage of time is needed to occur in order for the Series A Preferred Shares to become redeemable, it is considered to be probable that it will be redeemable. As such, we elected to accrete the difference between the initial value of $84,643 and the redemption value of $150,000 over the five-year period from the date of issuance through September 18, 2025 (the date at which the holder has the unconditional right to redeem the shares, deemed to be the earliest likely redemption date) using the effective interest method. The accretion to the carrying value of the redeemable preferred shares is treated as a deemed dividend, recorded as a charge to additional paid-in-capital (since there is a deficit in retained earnings) and deducted in computing earnings per share (analogous to the treatment for stated dividends paid on the redeemable preferred shares). The accumulated accretion as of December 31, 2020 is $2,831 resulting in an adjusted redeemable preferred share balance of $91,686.

The Series A Preferred Shares accumulated $4,212 of total accrued dividends from issuance date through December 31, 2020 recorded as a charge to additional paid-in-capital.

Convertible Redeemable Series B Preferred Shares

On September 21, 2020 (the “Waha Closing Date”), we completed the issuance and sale of our Series B Preferred Shares (as defined below) to Waha LATAM Investments Limited, an affiliate of Waha Capital PJSC (the “Waha Purchaser”) pursuant to our previously announced Investment Agreement, dated as of August 20, 2020, with the Waha Purchaser (the “Waha Investment Agreement”).

We issued and sold to the Waha Purchaser, pursuant to the Waha Investment Agreement, 50,000 shares of our newly created Series B Preferred Shares, no par value per share (the “Series B Preferred Shares”) for an aggregate purchase price of $50,000.

At closing, we paid certain fees in an aggregate amount of $1,000 to affiliates of the Waha Purchaser.

On the terms and subject to the conditions set forth in the Waha Investment Agreement, from and after September 21, 2020, the Waha Purchaser is entitled to appoint one director to our Board and one non-voting observer to the Board, in each case until such time as (i) the Waha Purchaser no longer holds at least 50% of the Series B Preferred Shares purchased by the Waha Purchaser under the Waha Investment Agreement and (ii) in the event that the Waha Purchaser or the Company converts the Series B Preferred Shares to Common Shares in full, the Waha Purchaser will be entitled to appoint one director to the Board and one non-voting observer to the Board, in each case, until such time as the Waha Purchaser no longer holds at least 50% of the issued and outstanding Common Shares issued to the Waha Purchaser at the conversion date. 

The Waha Investment Agreement (including the forms of our amended Memorandum of Association and Articles of Association, the terms of the Series B Preferred Shares and the Waha Shelf Registration Rights Agreement) contains other customary covenants and agreements, including certain transfer restrictions, standstill and voting provisions and preemptive rights.

Pursuant to the Waha Investment Agreement, we and the Waha Purchaser entered into a Shelf Registration Rights Agreement (the “Waha Shelf Registration Rights Agreement”), pursuant to which the Company filed a Registration Statement on Form F-3 covering the resale of the Common Shares for which the Series B Preferred Shares may be converted. The issuance of the Series B Preferred Shares pursuant to the Waha Investment Agreement is intended to be exempt from registration under the Securities Act, by virtue of the exemption provided by Section 4(a)(2) of the Securities Act.

Principal Terms of the Series B Preferred Shares

Dividends:

Dividends on each Series B Preferred Share accrue daily from and including the Waha Closing Date at a rate of 4.0% per annum and are payable quarterly in arrears commencing on December 31, 2020. Dividends on each Series B Preferred Share accrue whether or not declared and whether or not the Company has assets legally available to make payment thereof.

Dividends are payable, at the Company’s option, either (i) in cash or (ii) by increasing the amount of Accrued Dividends in an amount equal to the amount of the dividend to be paid. If the Company does not declare and pay in cash a full dividend on each Series B Preferred Share on any dividend payment date, then the amount of such unpaid dividend shall automatically be added to the amount of accrued dividends on such share on the applicable dividend payment date without any action on the part of the Company.

In addition, the Series B Preferred Shares are entitled to participate in dividends and other distributions declared and made on the Common Stock on an as-converted basis.

Ranking:

The Series B Preferred Shares rank on a parity basis to the Series A Preferred Shares and senior to the Common Stock with respect to dividend rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company.

Liquidation Rights:

In the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company, the holders of the Series B Preferred Shares shall be entitled, out of assets legally available therefor, before any distribution or payment out of the assets of the Company may be made to or set aside for the holders of any Common Shares, and subject to the rights of the holders of any Senior Shares or Parity Shares and the rights of the Company’s existing and future creditors, to receive in full a liquidating distribution in cash and in the amount per Series B Preferred Share equal to the Liquidation Preference with respect to such Series B Preferred Share.

Conversion Rights:

The Series B Preferred Shares are convertible, at the option of the holder, at any time into Common Stock at an initial conversion price of $9.251 (the “Initial Conversion Price) per share and an initial conversion rate of 108.1081 Common Shares per Series B Preferred Share, subject to certain anti-dilution adjustments. As of December 31, 2020, there were no conversions of the Series B Preferred Shares.

Each holder of Series B Preferred Shares has the right, at such holder’s option, to convert all or a part of such holder’s Series B Preferred Shares at any time into (i) the number of Common Shares per Series B Preferred Share equal to the quotient of (A) the sum of the Stated Value plus, without duplication, any accrued and unpaid Dividends with respect to such Series B Preferred Share as of the applicable Conversion Date (to the extent such accrued and unpaid Dividend is not included in the Stated Value already) (such sum, the “Conversion Amount”) divided by (B) the Conversion Price as of the applicable Conversion Date.

At any time from the third to the fifth anniversary of the Waha Closing Date, if the volume weighted average price (“VWAP”) of the Common Shares exceeds $13.88 (150% of the Initial Conversion Price) as may be adjusted pursuant to the Memorandum and Articles of Association, for at least 10 consecutive trading days, the Company may convert all of the Series B Preferred Shares into the number of Common Shares equal to the quotient of (1) 105% of the conversion amount as of the conversion date divided by (2) the conversion price of such share in effect as of the conversion date.

At any time from the fifth to the seventh anniversary of the Waha Closing Date, if the VWAP of the Common Shares exceeds $12.49 (135% of the Initial Conversion Price), as may be adjusted pursuant to the Memorandum and Articles of Association, for at least 10 consecutive trading days, the Company may convert all of the Series B Preferred Shares into the number of Common Shares equal to the quotient of (1) 105% of the conversion amount as of the conversion date divided by (2) the conversion price of such share in effect as of the conversion date.

In addition, at any time from the seventh anniversary of the Waha Closing Date, if the VWAP of the Common Shares exceeds the Initial Conversion Price, as may be adjusted pursuant to the Memorandum and Articles of Association, for at least 10 consecutive trading days, the Company may convert all of the Series B Preferred Shares into the number of Common Shares equal to the conversion amount divided by the lower of (1) the VWAP per Common Share on the 15 trading days immediately preceding the conversion date or (2) the price per Common Share on the trading day immediately preceding the conversion date.

Redemption Rights:

At any time on or after the seventh anniversary of the Waha Closing Date, the Company may redeem all of the Series B Preferred Shares in cash at a price equal to the sum of (i) (x) the initial stated value of $1,000 per Series B Preferred Shares plus (y) any Dividend Accruals (such sum, the “Stated Value”) plus (ii), without duplication, any accrued and unpaid distributions to, but excluding, the redemption date.

Change of Control Redemption:

If the Company undergoes a qualifying change of control prior to the seventh anniversary of the Waha Closing Date, the Company must redeem, subject to the right of each holder to convert its then outstanding Series B Preferred Shares into Common Shares, all of the then outstanding Series B Preferred Shares for a cash price per share equal to the greater of (x) 110.0% of the Stated Value plus, without duplication, any accrued and unpaid distributions to, but excluding, the redemption date, and (y) the amount such holder would have received in respect of the number of Common Shares that would be issuable upon conversion thereof.

If the Company undergoes a qualifying change of control on or following the seventh anniversary of the Waha Closing Date, the Company must redeem, subject to the right of each holder to convert its then outstanding Series B Preferred Shares into Common Shares, all of the then outstanding Series B Preferred Shares for a cash price per share equal to the greater of (x) 100.0% of the Stated Value plus, without duplication, any accrued and unpaid distributions to, but excluding, the redemption date, and (y) the amount such holder would have received in respect of the number of Common Shares that would be issuable upon conversion thereof, subject to certain conditions.

Voting Rights:

The Series B Preferred Shares will vote on all matters together with the Common Shares on an as-converted basis. Until such time as the Waha Purchaser no longer holds at least 50% of the Series B Preferred Shares purchased by the Waha Purchaser under the Waha Investment Agreement, the prior written consent of the Waha Purchaser is required in order for the Company to (i) authorize, create or issue any shares senior to or on parity with the Series B Preferred Shares, excluding an additional financing meeting certain requirements; (ii) amend, modify or repeal any provision of the Memorandum and Articles of Association in a manner adverse to the Series B Preferred Shares; (iii) change the authorized number of directors of the Company; (iv) enter into certain affiliate transactions; (v) declare or pay any dividend or distribution with respect to any shares; (vi) redeem, purchase or otherwise acquire any Common Shares; (vii) liquidate, dissolve or wind up the affairs of the Company or any of its subsidiaries, effect a recapitalization or reorganization, or reincorporate the Company under the laws of a jurisdiction other than the British Virgin Islands; (viii) effect a conversion of the Company into a different legal form; and (ix) enter into any exclusive license for all or substantially all of the Company’s products or technologies to a third party, in each case subject to certain exceptions.

Pursuant to the Waha Investment Agreement, on September 21, 2020, Mr. Aseem Gupta was appointed as a member of the Board.

Initial and Subsequent Accounting:

The Series B Preferred Shares are classified within temporary equity on our consolidated balance sheet as of December 31, 2020 due to the provisions that cause the equity to be redeemable upon the occurrence of a change of control. The terms of the Series B Preferred Shares do not include an unconditional obligation to redeem at a specified or determinable date, or upon an event certain to occur.

The Series B Preferred Shares were determined to have characteristics more akin to equity than debt. As a result, the conversion at holder’s option or at the Company’s option prior to the seventh anniversary of the Waha Closing Date were determined to be clearly and closely related to the Series B Preferred Shares and therefore do not need to be bifurcated and classified as a derivative liability.

The Company’s conversion option after the seventh anniversary of the Waha Closing Date was not determined to be clearly and closely related to the Series B Preferred Shares as the feature is in-substance a put option as it is designed to provide the investor with a fixed monetary amount, settleable in shares. Put (call) options embedded in equity hosts are not considered clearly and closely related. However, the embedded feature does not meet the definition of a derivative. It has an underlying, a notional amount and a settlement provision, little to no initial net investment but it is not net settled. Therefore, the feature does not need to be bifurcated and classified as a derivative liability.

We also evaluated whether a beneficial conversion feature (“BCF”) should be bifurcated and separately recognized. A convertible instrument contains a BCF when the conversion price is less than the fair value of the shares into which the instrument is convertible at the commitment date. As the conversion price is above the share price and the conversion option is not priced “in-the-money”, we concluded that the Series B Preferred Shares did not contain a BCF and no accounting entry was required.

All of the other embedded features in the Series B Preferred Shares do not need to be bifurcated.

Accordingly, the Series B Preferred Shares were recognized at fair value of $50,000 (the proceeds on the date of issuance) less issuance costs of $3,300 resulting in an initial value of $46,700.

The Series B Preferred Shares were not currently redeemable at December 31, 2020. Also, the events that could cause the Series B Preferred Shares to become redeemable are not considered probable of occurring as of December 31, 2020. Accordingly, accretion from the initial carrying amount to the redemption amount was not required. Dividends were accrued, approved and paid in cash for $553 and as of December 31, 2020 there were no undeclared dividends.

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Debt

12 Months Ended

Dec. 31, 2020

Debt Disclosure [Abstract]

Debt

7. Debt

The following table sets forth our outstanding short-term and long-term debt:

	Book Value December 31,				Fair Value December 31,
	2020		2019		2020		2019
Loan with HSBC Mexico, S.A. principal amount 100,000,000 Mexican Pesos		5,026		—		5,026		—
Loan with Bank Sabadell Mexico S.A. principal amount 83,831,941 Mexican Pesos		3,833		—		3,833		—
Loan with Bank Sabadell Mexico S.A. principal amount 20,000,000 Mexican Pesos		1,005		—		1,005		—
Loan with Banco de Crédito e Inversiones principal amount 500,000,000 Chilean Pesos		699		—		694		—
Long-term debt, including current maturities	$	10,563		—	$	10,558		—
Less current maturities of long-term debt		196		—		196		—
Long-term debt, excluding current maturities	$	10,367		—	$	10,362		—
Short-term debt, including current maturities of long-term debt		8,949		19,209		8,949		19,209
Total short-term and long-term debt	$	19,316		19,209	$	19,311		19,209

The changes in the balance of the total debt as of December 31, 2020 and December 31, 2019 consist of the following:

	As of December 31, 2020			As of December 31, 2019
Balance, beginning of year	$	19,209		$	31,162
Acquisitions		9,335			—
Borrowings obtained		640			—
Payment of borrowings		(375	)		—
Accrued interest		196			—
Interest paid		(195	)		—
Foreign currency translation adjustment		962			—
Short-term loans, net		(10,456	)		(11,953	)
Balance, end of year	$	19,316		$	19,209

The following table shows the details of the long-term debt outstanding as of December 31, 2020:

Loan	Issuance date	Maturity date	Currency	Principal amount in original currency		Principal amount in U.S. dollars		Interest rate	Interest payment
HSBC Mexico, S.A.	February 2020	March 2023	Mexican Pesos		100,000,000		5,100	TIIE(1)+3.25%		Monthly
Bank Sabadell Mexico S.A.	January 2020	March 2023	Mexican Pesos		83,831,941		4,433	TIIE(1)+2.5%		Monthly
Bank Sabadell Mexico S.A.	January 2020	January 2022	Mexican Pesos		20,000,000		1,058	TIIE(1)+3.2%		Monthly
Banco de Crédito e Inversiones	June 2020	May 2024	Chilean Pesos		500,000,000		640	3.50		Monthly

(1) TIIE represents an interbank interest rate in Mexico. As of December 31, 2020, interest rates for HSBC Mexico, S.A. loan, Bank Sabadell I loan and Bank Sabadell II loan were 7.5%, 6.75% and 7.45%, respectively.

The weighted average interest rate on short-term borrowings outstanding as of December 31, 2020 and 2019 was 3.4% and 4.3%, respectively.

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Cash and cash equivalents and restricted cash

12 Months Ended

Dec. 31, 2020

Cash and Cash Equivalents [Abstract]

Cash and cash equivalents and restricted cash

8. Cash and cash equivalents and restricted cash

Cash and cash equivalents

Cash and cash equivalents consist of the following:

	As of December 31, 2020		As of December 31, 2019
Cash on hand		121		42
Bank deposits		201,217		118,933
Time deposits		45,031		153,838
Money market funds		88,061		36,374
	$334,430		$309,187

Restricted cash

We place collateralized amounts related to operations with our travel suppliers and service providers and the International Air Transport Association (“IATA”). We are required to be accredited by IATA to sell international airlines tickets of IATA-affiliated airlines. We, therefore, as part of our operations, maintain restricted cash in the form of time deposits or bank or insurance guarantees aggregating $16,055 and $4,457 as of December 31, 2020 and 2019.

The following table reconciles our cash and cash equivalents and restricted cash as reported in our consolidated balance sheets to the total amount shown in our consolidated statements of cash flows:

	As of December 31, 2020		As of December 31, 2019		As of December 31, 2018
As included in our consolidated balance sheets:
Cash and cash equivalents		334,430		309,187		346,480
Restricted cash		16,055		4,457		5,709
Total cash and cash equivalents and restricted cash as shown in our consolidated statements of cash flows:	$	350,485	$	313,644	$	352,189

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Measurement of credit losses on financial instruments

12 Months Ended

Dec. 31, 2020

Receivables [Abstract]

Measurement of credit losses on financial instruments

9. Measurement of credit losses on financial instruments

On January 1, 2020, we adopted ASU 2016-13 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASC 326”) which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost.

As of the date of adoption, January 1, 2020 and as of December 31, 2020, substantially all our financial assets under the scope of the standard corresponded to trade accounts receivable as a result of revenue transactions recognized in accordance with ASC 606.

We adopted ASC 326 using the modified retrospective method for all financial assets measured at amortized cost. Results for reporting periods beginning after January 1, 2020 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP. We recorded a net increase to accumulated losses of $1,076 as of January 1, 2020 for the cumulative effect of adopting ASC 326.

The following table illustrates the impact of adopting ASC 326 as of January 1, 2020:

	As of January 1, 2020
	As reported under previous GAAP		Impact of ASC 326 adoption		As reported under ASC 326
Allowance for credit expected losses:		3,205		1,076		4,281

Trade receivables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method, less an allowance for expected credit losses.

Upon adoption of ASC 326, we grouped our trade receivables by country of origin and type (i.e. facilitation services, incentives, advertising, transportation and tour services and others) based on similar risk characteristics.

Payment terms for receivables vary depending on type and jurisdiction, generally less than one year.

As it relates to trade receivables with credit card processors which represent the majority of our trade receivables as of any given date, payment terms vary but typically are received within 30 days after booking except in those cases where transactions are effected through financing installment plans offered by banks. When travelers pay in installments, we receive payment from credit card processors at the time each installment is due generally within 12 months after booking depending on installment plan selected. However, we typically enter into factoring arrangements to cash these receivables thereby reducing days outstanding exposures. Receivables from back-end incentives and advertising transactions typically do not have stated payment terms, although we generally receive payment within 12 months.

Generally, we utilized a loss rate method to calculate the allowance for expected credit losses. We compiled information for a period of time before adoption and tracked historical loss information for our trade receivables by type and geography using their contractual lives. We believe that use of a period of 12 months or more prior to adoption was reasonable based on the nature and term of our receivables. We applied the historical credit loss percentages to our outstanding balances as of adoption and as of December 31, 2020. We determined that historical loss information is a reasonable basis on which to determine expected credit losses for trade receivables held at the reporting date because their composition at the reporting date is consistent with that used in developing the historical credit-loss percentages.

Historically the default or delinquency rates of our trade receivables have been low even during recessions or distressed economic periods. Recessions or other poor economic conditions had historically affected the amount of bookings by travelers and therefore generation of revenue and corresponding receivables, but they generally did not affect the collection behavior of receivables from confirmed bookings. A booking is not confirmed if credit card information is not validated by the credit card processors’ systems. Therefore, due to the nature of our receivables and counterparties, losses have been historically limited to very specific events at the counterparty level such as bankruptcy or financial difficulties.

During the year ended December 31, 2020, we recorded $7,199 of incremental allowance for expected uncollectible amounts, including estimated future losses in consideration of the impact of COVID-19 pandemic on our operations and the economy. Actual future bad debt could differ materially from this estimate resulting from changes in our assumptions of the duration and severity of the impact of the COVID-19 pandemic.

Our exposure to credit risk takes the form of a loss that would be recognized if counterparties failed to, or were unable to, meet their payment obligations. We are also exposed to political and economic risk events, which may cause non-payment of foreign currency obligations to us.

Generally, the counterparties to our trade receivables are major well-recognized and externally-credit rated credit card companies, such as MasterCard, Visa, Diners and other local or regional credit card processors; major GDS providers, such as Travelport, Amadeus and Sabre, individual major airlines; and to a lesser extent hotel chains and operators. We may seek cash collateral, letter of credit or parent company guarantees, as considered appropriate. We have not experienced significant credit problems with these customers to date. Most of these entities or their parent companies are externally credit-rated. We review these external ratings from credit agencies. Certain airlines have been severely affected by the COVID-19 pandemic and entered into Chapter 11 protection in the United States. We have recognized incremental allowances for expected uncollectible amounts. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in our consolidated balance sheet after deducting the expected credit loss allowance.

The following table shows the activity on the expected credit loss allowance for trade receivables during the years ended December 31, 2020 and 2019:

	As of December 31, 2020			As of December 31, 2019
Balance, beginning of year	$	3,205		$	2,065
Impact of adoption of ASC 326		1,076			—
Provisions		12,270			4,294
Recoveries and write-off		(7,369	)		(3,050	)
Foreign currency translation adjustment		1,613			(104	)
Balance, end of year	$	10,795		$	3,205

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Other Assets and Prepaid Expenses

12 Months Ended

Dec. 31, 2020

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Other Assets and Prepaid Expenses

10. Other assets and prepaid expenses

Other current assets and prepaid expenses consist of the following:

	As of December 31, 2020		As of December 31, 2019
Tax credits		34,465		37,067
Prepaid expenses and advance to suppliers		15,664		29,083
Prepaid advertising		175		1,483
Others		1,991		2,061
	$	52,295	$	69,694

Other non-current assets consist of the following:

	As of December 31, 2020		As of December 31, 2019
Deferred tax assets		57,742		25,351
Seller indemnification		14,053		—
	$	71,795	$	25,351

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Property and equipment, net

12 Months Ended

Dec. 31, 2020

Property, Plant and Equipment [Abstract]

Property and equipment, net

11. Property and equipment, net

Property and equipment, net consists of the following:

	As of December 31, 2020			As of December 31, 2019
Computer hardware and software		48,895			31,966
Office furniture and fixtures		17,909			21,882
Buildings		3,128			2,086
Vans		1,571			—
Land		266			41
Total property and equipment	$	71,769		$	55,975
Accumulated depreciation (1)		(49,036	)		(34,770	)
Impairment charge		(271	)		—
Total property and equipment, net	$	22,462		$	21,205

(1)  Accumulated depreciation as of December 31, 2020 comprised of $37,171, $10,169, $852 and $844 for computer hardware and software, office furniture and fixtures, buildings and vans, respectively. Accumulated depreciation as of December 31, 2019 comprised of $23,955, $10,345 and $470 for computer hardware and software, office furniture and fixtures and buildings, respectively.

The changes in the balance of property and equipment for the years ended December 31, 2020 and 2019 consist of the following:

	As of December 31, 2020			As of December 31, 2019
Balance, beginning of year	$	21,205		$	19,716
Additions		3,458			5,942
Disposals		—			(597	)
Write-off of leasehold improvements		(3,661	)		—
Acquisitions (1)		8,935			2,420
Depreciation		(7,981	)		(6,659	)
Impairment charge		(271	)		—
Foreign currency translation adjustment		777			383
Balance, end of year	$	22,462		$	21,205

(1)  Acquired property and equipment was comprised mainly of computer hardware and software, office furniture and fixtures and a fleet of dedicated vans.

Depreciation expense for the years ended December 31, 2020, 2019 and 2018 was classified as follows:

	For the year ended December 31, 2020		For the year ended December 31, 2019		For the year ended December 31, 2018
Technology and product development		4,351		4,001		1,036
General and administrative		3,377		2,658		3,949
Selling and marketing		253		—		—
Total depreciation expense	$	7,981	$	6,659	$	4,985

Due to the COVID-19 impact on the global travel industry and our business and results of operations, we concluded that sufficient indicators existed to require us to perform interim impairment testing of our property and equipment. During the second quarter of 2020, we recognized impairment charges of $271. The impairment charges were primarily related to office assets.

The full duration and total impact of COVID-19 remains uncertain and it is difficult to predict how the recovery will unfold for global economies, the travel industry or our business. As a result, we may continue to record impairment charges in the future due to the potential long-term economic impact and near-term financial impacts of the COVID-19 pandemic.

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Intangible assets, net

12 Months Ended

Dec. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible assets, net

12. Intangible assets, net

Indefinite-lived and definite-lived intangible assets, net consists of the following:

	As of December 31, 2020			As of December 31, 2019
Indefinite-lived intangible assets:
Trademarks and domains		13,882			13,882
Definite-lived intangible assets:
Trademarks and domains		14,296			—
Developed technology		91,107			72,532
Licenses		9,823			1,795
Customer relationships		35,706			3,663
Total intangible assets	$	164,814		$	91,872
Accumulated amortization (1)		(67,266	)		(42,253	)
Impairment charge		(1,053	)		—
Total intangible assets, net	$	96,495		$	49,619

(1)  Accumulated amortization as of December 31, 2020 comprised of $56,770, $7,751 and $2,745 for developed technology, licenses and customer relationships, respectively. Accumulated amortization as of December 31, 2019 comprised of $41,605, $154 and $494 for developed technology, licenses and customer relationships, respectively.

The changes in the balance of intangible assets, net as of December 31, 2020 and December 31, 2019 consist of the following:

	As of December 31, 2020			As of December 31, 2019
Balance, beginning of year	$	49,619		$	37,512
Additions		14,028			24,614
Acquisitions (1)		52,501			3,663
Amortization		(21,699	)		(16,137	)
Impairment charge		(1,053	)		—
Foreign currency translation adjustment		3,099			(33	)
Balance, end of year	$	96,495		$	49,619

(1) Acquired intangible assets was comprised mainly of customer relationships, trademarks and developed technology.

Amortization expense for the years ended December 31, 2020, 2019 and 2018 was classified as follows:

	For the year ended December 31, 2020		For the year ended December 31, 2019		For the year ended December 31, 2018
Technology and product development		17,190		14,198		9,495
General and administrative		3,753		1,523		645
Selling and marketing		756		416		—
Total amortization expense	$	21,699	$	16,137	$	10,140

The estimated future amortization expense related to intangible assets with definite lives as of December 31, 2020, assuming no subsequent impairment of the underlying assets, is as follows:

Year	Amount
2021		16,794
2022		16,652
2023		16,641
2024		6,445
2025		6,259
2026 and thereafter		19,822
Total	$	82,613

Impairment Assessments

We perform our annual assessment of possible impairment of indefinite-lived intangible assets as of December 31, 2020, or more frequently if events and circumstances indicate that an impairment may have occurred. As of December 31, 2020, we had no impairments of intangible assets with indefinite-lives. Due to the COVID-19 pandemic and its impact on our business, we conducted interim impairment assessments during the year ended December 31, 2020. We had no impairments of intangible assets with indefinite lives during the interim periods.

In addition, due to the COVID-19 impact, we concluded that sufficient indicators existed to require us to perform interim impairment testing of our definite-lived intangible assets. We conducted interim impairment assessments during the year ended December 31, 2020. We recognized impairment charges of $1,053 related to customer relationship assets during the second quarter ended June 30, 2020. The assets, classified as Level 3 measurements, were written down to $815 based on valuation using the Income Approach, specifically the Multi-Period Excess Earnings Method, which includes unobservable inputs, including projected revenues, costs and expenses, contributory asset charges (i.e. fixed assets, working capital and assembled workforce), and discount rate.

The full duration and total impact of COVID-19 remains uncertain and it is difficult to predict how the recovery will unfold for global economies, the travel industry or our business. As a result, we may continue to record impairment charges in the future due to the potential long-term economic impact and near-term financial impacts of the COVID-19 pandemic.

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Goodwill

12 Months Ended

Dec. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

13. Goodwill

Goodwill consists of the following:

	As of December 31, 2020		As of December 31, 2019
Goodwill	$	123,217	$	46,956

The following table presents the changes in goodwill by reportable segment:

	Air			Packages, Hotels and Other Travel Products			Total
Balance as of January 1, 2019	$	36,207		$	—		$	36,207
Additions		2,772			8,093			10,865
Foreign currency translation adjustment		(96	)		(20	)		(116	)
Balance as of December 31, 2019	$	38,883		$	8,073		$	46,956
Additions		2,328			70,923			73,251
Impairment charge		(593	)		—			(593	)
Foreign currency translation adjustment		(2,677	)		6,280			3,603
Balance as of December 31, 2020	$	37,941		$	85,276		$	123,217

Impairment Assessments

We perform our annual assessment of possible impairment of goodwill as of December 31, 2020, or more frequently if events and circumstances indicate that an impairment may have occurred. As of December 31, 2020, we recognized impairments charges of $593 related to the goodwill of Viajes Falabella attributable to the air segment. Due to the COVID-19 pandemic and its impact on our business, we conducted interim impairment assessments of goodwill during the year ended December 31, 2020. We had no impairments of goodwill during the interim periods.

We compared the fair value of the reporting units to their carrying values. The fair value estimates for all reporting units were based on a weighted-probability analysis of the present value of future discounted cash flows, Level 3 inputs. The significant estimates used in the discounted cash flows model included our weighted average cost of capital, projected cash flows and the long-term rate of growth. Our assumptions were based on the actual historical performance of the reporting unit and took into account the recent severe and continued weakening of operating results as well as the anticipated rate of recovery, and implied risk premiums based on market prices of our equity and debt as of the assessment dates.

The full duration and total impact of COVID-19 remains uncertain and it is difficult to predict how the recovery will unfold for global economies, the travel industry or our business. As a result, we may record impairment charges in the future due to the potential long-term economic impact and near-term financial impacts of the COVID-19 pandemic.

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Accounts Payable and Accrued Expenses

12 Months Ended

Dec. 31, 2020

Payables and Accruals [Abstract]

Accounts Payable and Accrued Expenses

14. Accounts payable and accrued expenses

Accounts payable and accrued expenses consist of the following:

	As of December 31, 2020		As of December 31, 2019
Marketing suppliers		7,706		29,957
Unbilled suppliers		15,360		10,742
Other suppliers		9,095		18,974
	$	32,161	$	59,673

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Travel Accounts Payable

12 Months Ended

Dec. 31, 2020

Text Block [Abstract]

Travel Accounts Payable

15. Travel accounts payable

Travel accounts payable consist of the following:

	As of December 31, 2020		As of December 31, 2019
Hotels and other travel service suppliers (1)		131,744		179,397
Cancelled reservations pending payment to travelers		90,764		—
Airlines		6,927		27,557
	$	229,435	$	206,954

(1) Includes $76,603 and $140,987 as of December 31, 2020 and December 31, 2019, respectively, for deferred merchant bookings which will be due after the traveler has checked out.

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Other Liabilities

12 Months Ended

Dec. 31, 2020

Other Liabilities Disclosure [Abstract]

Other Liabilities

16. Other liabilities

Other current liabilities consist of the following:

	As of December 31, 2020		As of December 31, 2019
Taxes payable		32,955		10,958
Salaries payable		14,444		25,196
Seller financing Viajes Falabella (1)		5,624		5,477
Other		3,086		5,091
	$	56,109	$	46,722

Other non-current liabilities consist of the following:

	As of December 31, 2020		As of December 31, 2019
Seller financing Viajes Falabella		—		5,219
Taxes payable		598		1,427
Deferred tax liabilities		11,111		—
Purchase price payable for Best Day Group (2)		8,768		—
Accrued earnout liability (3)		3,765		—
Promissory notes issued (4)		14,490		—
Equity method investments		2,059		—
Other		4,122		—
	$	44,913	$	6,646

(1)  As of December 31, 2020, this amount corresponds to the last installment due June 2021.

(2)  We will pay the purchase price on October 1, 2023. See Note 4 for details.

(3)  Under the terms of the acquisition of the Best Day Group, we may be required to pay an earnout amount up to a maximum of $20,000 on October 1, 2024. The amount represents the fair value of the earnout consideration as of December 31, 2020. Changes in the fair value of the earnout consideration are charged to earnings in the period incurred. See Note 21 for details of the earnout consideration.

(4)  Under the terms of the acquisition of the Best Day Group, we legally assumed a debt that Best Day Group had with their prior shareholders. We issued four promissory notes for an aggregate nominal amount of $14,323 which accrue interest at a fixed rate of 5% and are payable on October 1, 2023. The fair value of this debt as of December 31, 2020 was $14,341.

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Derivative financial instruments

12 Months Ended

Dec. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative financial instruments

17. Derivative financial instruments

As of December 31, 2020, and 2019, derivative financial instruments consist of foreign currency forward contracts of a short-term nature. The following table shows the derivative financial position as of the end of each year:

	Local currency	Notional amount		Type	Maturity	Fair value
2020
	Brazilian reais	$	10,500	Sell	Jan / Feb 21		77
	Mexican pesos	$	15,000	Sell	Jan 21		395
	Mexican pesos	$	10,000	Sell	Jan 21		262
	Mexican pesos	$	5,000	Sell	Jan 21		51
	Mexican pesos	$	10,000	Sell	Feb 21		166
	Mexican pesos	$	10,000	Sell	Feb 21		103
	Mexican pesos	$	10,000	Sell	Feb 21		103

	Local currency		Notional amount	Type	Maturity	Fair value
2019
	Argentinian pesos	$	15,000	Purchase	Jan - 20	(360	)
	Chile pesos	$	24,500	Purchase	Jan / Feb / Mar - 20	(848	)
	Colombian pesos	$	2,000	Purchase	Jan - 20	(63	)
	Argentinian pesos	$	6,000	Sell	Jan - 20	335
	Mexican pesos	$	7,000	Sell	Jan / Feb - 20	119

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Restructuring and related reorganization charges

12 Months Ended

Dec. 31, 2020

Restructuring and Related Activities [Abstract]

Restructuring and related reorganization charges

18. Restructuring and related reorganization charges

Due to the impact of the COVID-19 pandemic on the global travel industry and our business and results of operations, we committed to several actions intended to simplify our business structure and improve operational efficiencies. These actions were aimed at reducing non-critical expenditures and readjusting structural costs to deliver savings and preserve cash, including (i) temporarily reducing salaries of our senior and middle management; (ii) suspending bonuses to all employees; (iii) reducing part of our workforce and implementing a hiring freeze and limiting inflation salary increases; (iv) reducing working hours and implementing unpaid leave in certain locations; (v) accelerating synergies from acquisitions; (vi) renegotiating supplier payment terms and conditions; (vii) reviewing and renegotiating, to the extent possible, all contracts and commitments; (viii) reducing marketing expenses and (ix) deferring non-critical capital expenditures.

As a result, we recognized $12,961 in headcount reduction benefits during the year ended December 31, 2020, which were fully paid as of period end. Based on current plans, we expect total severance benefits in 2021 to decrease. However, we continue to actively evaluate additional cost reduction efforts, and should we make decisions in future periods to take further actions we will incur additional reorganization charges.

We also engaged in certain smaller scale restructure actions during the year ended December 31, 2020 to centralize and migrate certain operational functions and systems, for which we recognized $399 in reorganization charges during the year ended December 31, 2020, which were primarily related to anticipated termination of several office rent contracts.

The following table summarizes the restructuring and related reorganization activity for the year ended December 31, 2020:

	Employee severance and benefits			Other			Total
Accrued liability as of January 1, 2020	$	—		$	—		$	—
Charges		12,961			399			13,360
Payments		(12,961	)		(248	)		(13,209	)
Accrued liability as of December 31, 2020	$	—		$	151		$	151

We allocated the total employee severance and benefit expenses of $12,961 to “Cost of revenue” ($2,662), “Selling and marketing” expenses ($3,851), “General and administrative” expenses ($3,239) and “Technology and product development” expenses ($3,209) in our consolidated statements of income based on the departmental assignment of terminated employees. The remaining total reorganization charges of $399 were allocated to “General and administrative” expenses in our consolidated statements of income based on departmental use of terminated leased asset contract. Restructuring and related reorganization charges are included in the “Unallocated” segment.

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Income taxes

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Income taxes

19. Income taxes

The Company is organized as a British Virgin Islands corporation. However, under the “anti-inversion” rules of Section 7874 of the U.S. Internal Revenue Code, the Company is treated as a U.S. corporation for U.S. federal tax purposes. Accordingly, the Company is subject to U.S. federal income tax on its worldwide income. On December 22, 2017, the United States enacted the Tax Cuts and Jobs Act (“Tax TCJA Act”) that significantly changed U.S. tax law by, among other things, lowering U.S. corporate income tax rates, implementing a territorial tax system, and imposing a one-time transition tax on deemed repatriated earnings of foreign subsidiaries. The Tax Act reduced the U.S. corporate income tax rate from 35% to 21%, effective January 1, 2018.

The following table summarizes our U.S. and foreign (loss) / income before income taxes for the years ended December 31, 2020, 2019 and 2018:

	Year ended December 31,
	2020			2019			2018
U.S.		(15,510	)		1,942			17,296
Foreign		(148,797	)		(28,077	)		8,927
Total	$	(164,307	)	$	(26,135	)	$	26,223

Provision for Income Taxes

The following table summarizes our provision for income taxes for the years ended December 31, 2020, 2019 and 2018:

	Year ended December 31,
	2020			2019			2018
Current income tax expense:
U.S. Federal		1,424			1,035			(1,608	)
Foreign		(4,440	)		(8,235	)		(14,210	)
Total current income tax expense		(3,016	)		(7,200	)		(15,818	)
Deferred income tax expense:
U.S. Federal		2,653			—			—
Foreign		21,801			12,425			8,749
Total deferred income tax expense		24,454			12,425			8,749
Income tax benefit / (expense)	$	21,438		$	5,225		$	(7,069	)

Deferred Income Taxes

As of December 31, 2020 and 2019, the significant components of our deferred tax assets and deferred tax liabilities were as follows:

	As of December 31, 2020			As of December 31, 2019
Non-current deferred tax assets		66,768			36,700
Total deferred tax assets		66,768			36,700
Less valuation allowance		(9,026	)		(11,349	)
Net deferred tax assets		57,742			25,351
Non-current tax liabilities		(11,111	)		—
Total deferred tax liabilities		(11,111	)		—
Total deferred tax	$	46,631		$	25,351

The following table summarizes the composition of deferred tax assets and deferred tax liabilities as of December 31, 2020 and 2019:

	As of December 31, 2020			As of December 31, 2019
Tax loss carryforwards		33,036			25,717
Allowance for credit expected losses		4,161			462
Royalties		533			69
Provisions and other assets		22,978			11,319
Property and equipment		268			(438	)
Intangible assets		(9,377	)		—
Others		4,058			(429	)
Total deferred tax assets, net before valuation allowance	$	55,657		$	36,700
Less valuation allowance		(9,026	)		(11,349	)
Total deferred tax assets, net after valuation allowance	$	46,631		$	25,351

As of December 31, 2020, we have both foreign and U.S. net operating loss carryforwards (“NOLs”) of $143,823. If not utilized, the NOLs will begin to expire, as follows:

	As of December 31, 2020
Expiration date	U.S.		Foreign
Expires 2021		—		536
Expires 2022		—		977
Expires 2023		—		31,162
Expires 2024 and thereafter		—		58,464
Without expiration dates		1,305		51,379
Total NOLs (1)	$	1,305	$	142,518

(1) A partial valuation allowance is booked as of December 31, 2020 in order to reserve $58,765 of the tax loss carryforwards detailed above.

The following table shows the breakdown of our NOLs by country of origin as of December 31, 2020:

Country	NOL gross amount		Expiration terms
Brazil		48,584	No expiration. Offset limitation to 30% of taxable income
Mexico		47,824	10 years
Argentina		35,408	5 years
Colombia		7,559	12 years
Others		4,448
Total NOLs	$	143,823

In the aggregate, we have foreign and U.S NOLs amounting to $52,684 which may be carried forward indefinitely but subject to certain percentage limitations of taxable income each year.

As of December 31, 2020, we had a valuation allowance of $8,742 related to certain NOL carryforwards for which it is more likely than not the tax benefits will not be realized. The valuation allowance decreased by $2,323 from the amount recorded as of December 31, 2019 primarily due to the reduction of a portion of valuation allowances of the Brazil subsidiary. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period change, or if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence such as our projections for growth.

The following table presents the changes in our valuation allowance for the years ended December 31, 2020, 2019 and 2018:

	Valuation allowance
Balance as of January 1, 2018	$	42,584
Increases		997
Decreases		(25,574	)
Balance as of December 31, 2018	$	18,007
Increases		5,892
Decreases		(12,550	)
Balance as of December 31, 2019	$	11,349
Increases		754
Decreases		(3,077	)
Balance as of December 31, 2020	$	9,026

Deferred tax assets and liabilities are recognized for the future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to reverse. We have foreign subsidiaries with aggregated undistributed earnings of $27,506 as of December 31, 2020. We have not provided deferred income taxes on taxable temporary differences related to investments in certain foreign subsidiaries where the foreign subsidiary has or will invest undistributed earnings indefinitely outside of the United States. In the event we distribute such earnings in the form of dividends or otherwise, we may be subject to income taxes. Further, a sale of these subsidiaries may cause these temporary differences to become taxable. Due to complexities in tax laws, uncertainties related to the timing and source of any potential distribution of such earnings, and other important factors such as the amount of associated foreign tax credits, it is not practicable to estimate the amount of unrecognized deferred taxes on these taxable temporary differences. We consider the earnings of our foreign subsidiaries to be indefinitely reinvested, other than certain earnings the distributions of which do not imply withholdings or state income taxes, and for that reason we have not recorded a deferred tax liability.

Reconciliation of Statutory Income Tax Rate to Effective Income Tax Rate

A reconciliation of the provision for income taxes computed by applying the weighted average income tax rate for the years ended December 31, 2020, 2019 and 2018 to total income tax expense is as follows:

	Year ended December 31,
	2020			2019			2018
Net (loss) / income before income tax	$	(164,307	)	$	(26,135	)	$	26,223
Weighted average income tax rate (3)		27	%		29	%		39	%
Income tax (benefit) / expense at weighted average income tax rate	$	(43,651	)	$	(7,474	)	$	10,273
Permanent differences:
Non-taxable income (1)		7,959			(469	)		(1,448	)
Foreign non-creditable withholding tax (2)		1,471			4,439			4,193
Non-deductible expenses		12,161			1,054			1,346
Currency translation adjustment		1,289			1,891			1,902
Tax credits recovery		12			(157	)		—
Others		20			553			540
Provisions and contingencies		1,747			—			—
True up		849			(2,693	)		1,204
Change in valuation allowance		(3,367	)		(5,010	)		(10,941	)
Change in tax rate		72			2,641			—
Income tax (benefit) / expense	$	(21,438	)	$	(5,225	)	$	7,069

(1) Includes tax (benefits) / losses generated by operations located in the Uruguayan “Free Trade Zone”.

(2)  Includes foreign withholding taxes on royalties and services.

(3) We use a weighted average rate for the income tax reconciliation, since the majority of our operations are outside the U.S. The calculation is performed based on an average between the enacted tax rates of the foreign jurisdictions.

Our effective tax rate for the year ended December 31, 2020 was 13%, lower than the weighted average rate of 27% due primarily to the changes in tax rate related to the Promotional Regime enacted in Argentina, which reduced the income tax rate to 15% as from the following year and the reversal of valuation allowances.

Our effective tax rate for the year ended December 31, 2019 was 20%, lower than the weighted average rate of 29% due to the decrease in non-taxable income and the changes in valuation allowances related to our Brazilian subsidiary.

Uncertain tax positions

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits and interest is as follows:

	Year ended December 31,
	2020		2019		2018
Balance, beginning of year		—		—		—
Increases to tax positions related to current year		—		—		—
Increases to tax positions related to prior years (1)		31,778		—		—
Decreases to tax positions related to prior years		—		—		—
Reductions due to lapsed statute of limitations		—		—		—
Settlements during current year		—		—		—
Interest and penalties		1,128		—		—
Balance, end of year	$	32,906	$	—	$	—

(1) Corresponds to uncertain tax positions recognized as part of the acquisition of the Best Day Group. See Note 4.

As of December 31, 2020, we had $32,906 of gross unrecognized tax benefits, if recognized, would affect the effective tax rate. As of December 31, 2019, and 2018, we did not have gross unrecognized tax benefits that would have affected the effective tax rate.

As of December 31, 2020, total gross interest and penalties accrued was $18,879. During the year ended December 31, 2020 we recognized interest expense of $1,128 in connection with our unrecognized tax benefits.

We evaluate the tax positions and establish liabilities for uncertain tax positions that may be challenged by local authorities and may not be fully sustained, despite our belief that the underlying tax positions are fully supportable. Uncertain tax positions are reviewed on an ongoing basis and are adjusted in light of changing facts and circumstances, including progress of tax audits, developments in case law, and closing of statute of limitations. Such adjustments are reflected in the income tax provision as appropriate.

We are routinely audited by U.S. federal and foreign income tax authorities. At any point in time, we may have tax audits underway at various stages of completion. These audits include questioning the timing and the amount of income and deductions, and the allocation of income and deductions among various tax jurisdictions. The Mexican Tax Authority is currently examining the income tax returns for the 2014, 2015 and 2017 tax years of our subsidiary Viajes Beda. The Mexican Tax Authority has already issued a notice of observations for fiscal year 2014. We are currently preparing the information requested in order to submit a response and reject any adjustment related to the issues raised during the tax audit.

During the third quarter of 2020, the Internal Revenue Service (“IRS”) issued final adjustments related to foreign tax credits allocation criteria taken during our fiscal year 2017. We recognized a tax assessment of $1,649 as income tax provision. Tax liability is expected to be offset with net operating losses and the final payment could be refunded by the IRS.

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act)

On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, a relief package comprising a combination of tax provisions and other stimulus measures. The CARES Act broadly provides entities tax payment relief and significant business incentives and makes certain technical corrections to the Tax Act. The tax relief measures for entities include a five-year net operating loss carry back, increases interest expense deduction limits, acceleration of alternative minimum tax credit refunds, payroll tax relief, and a technical correction to allow accelerated deductions for qualified improvement property. The CARES Act also provides other non-income tax benefits, including federal funding for a range of stabilization measures and emergency funding to assist those impacted by the COVID-19 pandemic.

Under the Tax Act, NOL deductions arising in tax years beginning after December 31, 2017, can offset only up to 80% of future taxable income. The Tax Act also prohibits NOL carrybacks for NOLs arising in tax years ending after December 31, 2017 but allows indefinite carryforwards.

On the contrary, the CARES Act provides that NOLs arising in tax years beginning after December 31, 2017, and ending before January 1, 2021, may be carried back for five years. Generally, any NOL carried back must be carried back to the earliest applicable tax year. Further, the 80% limitation enacted under the Act is temporarily suspended for tax years beginning before 2021 and will be reinstated beginning in 2021. Under these conditions, NOLs arising in 2018, 2019 or 2020 could be carried back to years before 2018, in order to maximize the potential cash refund associated with carryback claims.

We could be allowed to apply for this benefit and the current NOLs could be carried back to compensate potential claims of the IRS. We continue to assess the effect of the CARES Act and ongoing government guidance related to COVID-19 that may be issued.

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Segment information

12 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

Segment information

20. Segment information

We organize our business into two reportable segments: (1) “Air” and (2) “Packages, Hotels and Other Travel Products”.

Our “Air” segment primarily consists of facilitation services for the sale of airline tickets on a stand-alone basis and excludes airline tickets that are packaged with other non-airline flight products.

Our “Packages, Hotels and Other Travel Products” segment primarily consists of facilitation services for the sale of travel packages (which can include airline tickets and hotel rooms), as well as stand-alone sales of hotel rooms (including vacation rentals), car rentals, bus tickets, cruise tickets, travel insurance and destination services.

Both segments also include sale of advertisements and, to a lesser extent, incentives earned from suppliers and interest revenue.

For the year ended December 31, 2020, we have changed our calculation of Adjusted Segment EBITDA reported to the Chief Operating Decision Maker (“CODM”) to exclude restructuring charges and acquisition costs. We have effected this change retroactively to all years presented. However, we did not have restructuring charges in either the years ended December 31, 2019 or 2018. We did not engage in acquisition activity in the year ended December 31, 2018.

We measure our segment’s performance by our Adjusted Segment EBITDA. We use Adjusted Segment EBITDA for purposes of making decisions about allocating resources to our segments and to internally evaluate their financial performance because we believe Adjusted Segment EBITDA reflects current core operating performance of each segment and provides an indicator of each segment’s ability to generate cash.

Adjusted Segment EBITDA is calculated, with respect to each segment, as net loss adjusted for (1) provision for income taxes; (2) total financial results, net; (3) stock-based compensation expense; (4) acquisition transaction costs; (5) depreciation and amortization; (6) impairment charges; and (7) restructuring charges.

Adjusted Segment EBITDA includes allocations of certain expenses based on transaction volumes and other usage metrics. Our allocation methodology is periodically evaluated and may change.

There are no intersegment revenues in any of the periods presented.

As depreciation and amortization are not included in our segment’s performance measure, we do not report assets by segment as it would not be meaningful. Our CODM does not regularly use this information.

The following tables present our segment information for the years ended December 31, 2020, 2019 and 2018:

	Year ended December 31, 2020
	Air			Packages, Hotels and Other travel products			Unallocated			Total Consolidated
Revenue	$	62,713		$	68,621		$	—		$	131,334
Adjusted EBITDA	$	(32,890	)	$	(82,377	)	$	(6,546	)	$	(121,813	)
Depreciation and amortization		(9,784	)		(9,784	)		(10,112	)		(29,680	)
Stock-based compensation expense		—			—			(7,312	)		(7,312	)
Impairment charges		—			—			(1,917	)		(1,917	)
Restructuring charges		—			—			(13,360	)		(13,360	)
Acquisition transaction costs		—			—			(3,135	)		(3,135	)
Operating loss	$	(42,674	)	$	(92,161	)	$	(42,382	)	$	(177,217	)
Financial income, net		—			—			—			12,910
Loss before income tax		—			—			—		$	(164,307	)
Income tax benefit		—			—			—			21,438
Net loss for the year		—			—			—		$	(142,869	)
Net loss attributable to redeemable non-controlling interest		—			—			—			282
Net loss attributable to Despegar.com, Corp.		—			—			—		$	(142,587	)

	Year ended December 31, 2019
	Air			Packages, Hotels and other travel products			Unallocated			Total Consolidated
Revenue	$	201,638		$	323,238		$	—		$	524,876
Adjusted EBITDA	$	3,346		$	36,546		$	(13,249	)	$	26,643
Depreciation and amortization		(7,716	)		(7,716	)		(7,364	)		(22,796	)
Stock-based compensation expense		—			—			(11,686	)		(11,686	)
Impairment charges		—			—			—			—
Restructuring charges		—			—			—			—
Acquisition transaction costs		—			—			(1,081	)		(1,081	)
Operating (loss) / income	$	(4,370	)	$	28,830		$	(33,380	)	$	(8,920	)
Financial expense, net		—			—			—			(17,215	)
Loss before income tax		—			—			—		$	(26,135	)
Income tax benefit		—			—			—			5,225
Net loss for the year		—			—			—		$	(20,910	)

	Year ended December 31, 2018
	Air			Packages, Hotels and other travel products			Unallocated			Total Consolidated
Revenue	$	214,804		$	315,810		$	—		$	530,614
Adjusted EBITDA	$	27,790		$	37,739		$	2,115		$	67,644
Depreciation and amortization		(4,630	)		(4,582	)		(5,913	)		(15,125	)
Stock-based compensation expense		—			—			(6,766	)		(6,766	)
Impairment charges		—			—			(363	)		(363	)
Restructuring charges		—			—			—			—
Acquisition transaction costs		—			—			—			—
Operating income / (loss)	$	23,160		$	33,157		$	(10,927	)	$	45,390
Financial expense, net		—			—			—			(19,167	)
Income before income tax		—			—			—		$	26,223
Income tax expense		—			—			—			(7,069	)
Net income for the year		—			—			—		$	19,154

Revenue by Business Model, Type and Country

The following table presents our revenues by business model, revenue type and country for the years ended December 31, 2020, 2019 and 2018:

	Year ended December 31,
	2020		2019		2018
Business Model:
Prepay/Merchant Model		102,591		407,258		415,812
Pay-at-Destination/Agency Model		1,305		13,130		20,143
Others (1)		27,438		104,488		94,659
Total Revenue	$	131,334	$	524,876	$	530,614
Revenue Type:
Commissions and service fees		100,908		426,082		428,722
Incentive fees		17,040		72,912		80,710
Advertising		5,040		15,063		15,170
Others (2)		8,346		10,819		6,012
Total Revenue	$	131,334	$	524,876	$	530,614
Country:
Argentina		16,112		98,946		122,656
Brazil		45,289		159,676		165,688
Uruguay		9,240		131,160		142,902
Mexico		30,801		39,500		38,243
Other countries (3)		29,892		95,594		61,125
Total Revenue	$	131,334	$	524,876	$	530,614

(1) Others includes incentive fees, advertising, breakage, loyalty and interest revenue.

(2) Others includes breakage, loyalty, destination services and interest revenue.

(3) Other countries include Chile, Peru, Colombia, Ecuador and United States.

Assets by Country

The following table presents our main assets by country:

	As of December 31, 2020		As of December 31, 2019
Goodwill:
Argentina		2,455		3,048
Brazil		14,132		10,508
Mexico		81,137		7,543
Uruguay		16,839		16,839
Other countries (1)		8,654		9,018
	$	123,217	$	46,956
Intangible assets:
Argentina		28,104		28,487
Uruguay		28,500		14,859
Mexico		36,546		—
Other countries (2)		3,345		6,273
	$	96,495	$	49,619

	As of December 31, 2020		As of December 31, 2019
Property and equipment:
Argentina		9,661		7,067
Brazil		2,056		3,779
Mexico		3,538		—
Uruguay		499		929
United States		3,304		4,357
Other countries (3)		3,404		5,073
	$	22,462	$	21,205

(1) Other countries include Chile, Peru and Colombia

(2) Other countries include Chile, Peru, Colombia, Brazil and United States.

(3) Other countries include Chile, Peru, Colombia and Ecuador.

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Commitments and contingencies

12 Months Ended

Dec. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and contingencies

21. Commitments and contingencies

Commitments:

Operating leases

Our commitments include operating lease commitments. Generally, our property and equipment, including a fleet of dedicated vans to provide transportation services, office and retail space, and others are supplied through operating leases. The future contractual aggregate minimum lease payments under non-cancellable operating leases and other commitments are disclosed in Note 28.

Employment Agreements

In the ordinary course of business, we entered into employment agreements with certain of our key employees which provide for compensation guidelines. Generally, we pay compensation to our executive officers in the form of (i) cash paid on a monthly basis and (ii) an annual bonus subject to the fulfillment of certain performance targets. We recognize compensation in “Other liabilities” in our consolidated balance sheets and in “General and administrative” expenses in our consolidated statements of income.

As mentioned in Note 18, due to the COVID-19 impact on the global travel industry and our business and results of operations, we temporarily reduced salaries of our senior and middle management and suspended bonuses to all employees.

Best Day Earnout Provision

The Acquisition Agreement provides for an earnout for the benefit of certain sellers ranging from $0 to $20,000 based solely on the performance of our share price during a measurement period of six months (the “earnout measurement period”) prior to the fourth anniversary of the Closing Date. The earnout, if any, will be payable in cash on October 1, 2024.

We will pay no earnout to the sellers if our average share price is below $10 during the earnout measurement period. We will pay $5,000 to the sellers if our average share price is between $10 and $15 during the earnout measurement period. We will pay $10,000 to the sellers if our average share price is between $15 and $20 during the earnout measurement period. We will pay $15,000 to the sellers if our average share price is between $20 and $25 during the earnout measurement period. And we will pay $20,000 to the sellers if our average share price is above $25 during the earnout measurement period.

As of the date of acquisition, we estimated an additional consideration of $1,526 will be paid. We remeasured the contingent consideration as of December 31, 2020 and adjusted it to $3,765. We recognized the change in the fair value of the earnout liability under “General and administrative” expenses in our consolidated statements of income. See Note 4 for additional information on the acquisition.

Services Agreement with Mr. Julián Balbuena Alonso and BD Operadora de Servicios, S.A. de C.V. (“BOS”)

Our subsidiary, Viajes Beda, entered into a services agreement (the “Services Agreement”) with Mr. Julián Balbuena Alonso (“JBA”) and BD Operadora de Servicios, S.A. de C.V. (“BOS”) (collectively herein referred to as the “Service Providers”) pursuant to which the Service Providers provide consulting services to Viajes Beda for a limited period of 120 days commencing on October 1, 2020. Under the terms of the Services Agreement, the Service Providers are encouraged to renegotiate more beneficial terms and conditions with travel suppliers in consideration for a fee ranging from $0 to $5,000.

We accrued $1,819 towards the completion of the services as of December 31, 2020. The amount was recognized in “General and administrative” expenses in our consolidated statements of income for the year ended December 31, 2020.

Contingencies:

Legal Proceedings

We are a party to various lawsuits and claims arising out of the ordinary course of business. We estimate the range of our liability related to pending litigation when we believe the amount or range of loss can be estimated. We record our best estimate of a loss when the loss is considered probable. When a liability is probable and there is a range of estimated loss with no best estimate in the range, we record the minimum estimated liability related to the lawsuits or claims. As additional information becomes available, we assess the potential liability related to our pending litigation and claims and revise our estimates. Due to uncertainties related to the resolution of lawsuits and claims, the ultimate outcome may differ significantly from our estimates. In the opinion of management and based on liability accruals provided, our ultimate exposure with respect to these pending lawsuits and claims is not expected to have a material adverse effect on our consolidated financial position or cash flows, although they could have a material adverse effect on our results of operations for a particular reporting period.

As of December 31, 2020, we have provided an amount of $9,990 to cover for probable losses.

Labor, Social Security and Non-Income Tax Contingencies

We have reserved for certain foreign labor, social security and non-income tax contingencies based on the likelihood of an obligation in accordance with accounting guidance for probable loss contingencies. Loss contingency provisions are recorded for probable losses at management’s best estimate of a loss, or when a best estimate cannot be made, a minimum loss contingency amount is recorded.

As of December 31, 2020, we have provided an amount of $23,357 related to labor, social security and non-income tax contingencies. While we believe that the assumptions and estimates used to determine contingent liabilities are reasonable, the ultimate outcome of these matters cannot presently be determined.

Tax Audits

We are involved in various tax matters, with respect to some of which the outcome is uncertain. We establish reserves to remove some or all of the tax benefit of any of our tax positions at the time we determine that it becomes uncertain based upon one of the following conditions: (1) the tax position is not “more likely than not” to be sustained, (2) the tax position is “more likely than not” to be sustained, but for a lesser amount, or (3) the tax position is “more likely than not” to be sustained, but not in the financial period in which the tax position was originally taken. For purposes of evaluating whether or not a tax position is uncertain, (1) we presume the tax position will be examined by the relevant taxing authority that has full knowledge of all relevant information; (2) the technical merits of a tax position are derived from authorities such as legislation and statutes, legislative intent, regulations, rulings and case law and their applicability to the facts and circumstances of the tax position; and (3) each tax position is evaluated without consideration of the possibility of offset or aggregation with other tax positions taken. A number of years may elapse before a particular uncertain tax position is audited and finally resolved or when a tax assessment is raised. The number of years subject to tax assessments varies depending on the tax jurisdiction. The tax benefit that has been previously reserved because of a failure to meet the “more likely than not” recognition threshold would be recognized in our income tax expense in the first interim period when the uncertainty disappears under any one of the following conditions: (1) the tax position is “more likely than not” to be sustained, (2) the tax position, amount, and/or timing is ultimately settled through negotiation or litigation, or (3) the statute of limitations for the tax position has expired. See Note 19 for details.

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Related party transactions

12 Months Ended

Dec. 31, 2020

Related Party Transactions [Abstract]

Related party transactions

22. Related party transactions

Balances and operations with Expedia

Expedia, Inc. (“Expedia”), a subsidiary of Expedia Group, Inc., a Delaware corporation, is a shareholder of record of the Company.

In March 2015, we entered into an outsourcing agreement (the “Expedia Lodging Outsourcing Agreement”) pursuant to which all hotel and other lodging reservations for countries outside of Latin America offered through our platforms were provided by Expedia on an exclusive basis. The Expedia Lodging Outsourcing Agreement was amended in November 2019 (hereinafter referred to as the “Expedia Amended and Restated Lodging Outsourcing Agreement”) to allow us to contract 10% of lodging inventory directly without using Expedia. Under the Expedia Amended and Restated Lodging Outsourcing Agreement, Expedia is also the preferred provider of hotel and other lodging reservations in Latin America. The term of the Expedia Amended and Restated Lodging Outsourcing Agreement renews annually automatically unless terminated in accordance with its terms. We lastly renewed the Expedia Amended and Restated Lodging Outsourcing Agreement in November 2020.

Under the Expedia Amended and Restated Lodging Outsourcing Agreement, we are required to reach certain marketing fee thresholds during specified periods. Failure to reach the minimum marketing fee thresholds may require us to pay a $125,000 termination fee. Expedia may also unilaterally terminate the Expedia Amended and Restated Lodging Outsourcing Agreement in the event of a change of control of the Company. Beginning March 2022, we may unilaterally terminate the Expedia Amended and Restated Lodging Outsourcing Agreement upon payment of a $125,000 termination fee. As noted in more detail below, in connection with the COVID-19 pandemic, Expedia has agreed to waive its termination right relating to minimum marketing fee thresholds for any period through December 31, 2021.

In August 2016, we entered into another outsourcing agreement with Expedia (the “Despegar Outsourcing Agreement”) pursuant to which we are required to make our hotel reservations inventory available to certain affiliates of Expedia. The Despegar Outsourcing Agreement has a three-year term that renews automatically for one-year periods unless either party elects not to renew. We lastly renewed the Despegar Outsourcing Agreement in August 2020 for an additional one-year term.

As a result of the impact of the COVID-19 pandemic on the global travel industry and our business in particular, on August 20, 2020, we entered into an amendment to the Expedia Amended and Restated Lodging Outsourcing Agreement. Expedia agreed to waive its termination rights under the Expedia Amended and Restated Lodging Outsourcing Agreement relating to minimum marketing fee thresholds for any period through December 31, 2021, subject to certain conditions. Additionally, we have entered into a Nominating Agreement with Expedia, pursuant to which Expedia has the right to designate one individual to be a nominee for election to our Board of Directors and we shall cause such Expedia designee to be included in the slate of directors approved and recommended by the Board for election at each meeting of shareholders at which the term of an Expedia designee will expire. According to the Nominating Agreement, Mr Adam Jay was appointed as a member of the Board.

Under the Expedia Amended and Restated Lodging Outsourcing Agreement and the Despegar Outsourcing Agreement, we maintained a net payable position with Expedia of $11,177 and $67,047 recognized under “Related party receivable” and “Related party payable” in our consolidated balance sheet as of December 31, 2020 and 2019, respectively. We generated revenue of $7,066, $38,760 and $43,975 for the years ended December 31, 2020, 2019 and 2018, respectively. Revenue from Expedia represented 5%, 7% and 8% of our total consolidated revenues for the years ended December 31, 2020, 2019 and 2018, respectively.

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Fair value measurements

12 Months Ended

Dec. 31, 2020

Fair Value Disclosures [Abstract]

Fair value measurements

23. Fair value measurements

Items measured at fair value on a recurring basis

Financial assets and liabilities carried at fair value at December 31, 2020 are classified in the categories described in the table below:

	Level 1		Level 2		Level 3			Total
Assets
Cash equivalents
Money market funds		88,061		—		—			88,061
Time deposits		45,031		—		—			45,031
Derivatives
Foreign currency forwards		—		725		—			725
Total assets at fair value	$	133,092	$	725	$	—		$	133,817
Liabilities
Accrued earnout liability		—		—		(3,765	)		(3,765	)
Total liabilities at fair value	$	—	$	—	$	(3,765	)	$	(3,765	)

Financial assets and liabilities carried at fair value at December 31, 2019 are classified in the categories described in the table below:

	Level 1		Level 2			Level 3		Total
Assets
Cash equivalents
Money market funds		36,374		—			—		36,374
Time deposits		153,838		—			—		153,838
Derivatives
Foreign currency forwards		—		454			—		454
Total assets at fair value	$	190,212	$	454		$	—	$	190,666
Liabilities
Derivatives
Foreign currency forwards		—		(1,271	)		—		(1,271	)
Total liabilities at fair value	$	—	$	(1,271	)	$	—	$	(1,271	)

We value our derivative instruments using pricing models. Pricing models consider the contract terms as well as multiple inputs where applicable, such as interest rate yield curves, option volatility and foreign currency exchange rates. Derivatives are considered “Level 2” fair value measurements. Our derivative instruments are typically short-term in nature.

We measure the fair value of the earnout payment using a series of “digital options”. We believe this methodology can be applied because our earnout payment provides for a fixed payment to the sellers if our stock price exceeds a predetermined strike price during the earnout measurement period. In the application of this methodology, we performed a valuation in a risk neutral framework, using a Black-Scholes-Merton Digital call option formula. The significant inputs used were our share price as of the valuation date, our share price historical volatility, U.S. risk free rate, estimated term and credit-risk adjustment spread.

We classify our cash equivalents and investments within Level 1 as we value our cash equivalents and investments using quoted market prices.

We hold term deposit investments with financial institutions. Term deposits with original maturities of less than three months are classified as cash equivalents and those with remaining maturities of less than one year are classified within short-term investments.

As of December 31, 2020, and 2019, our cash and cash equivalents consisted primarily of term deposits with maturities of three months or less and bank account balances.

Items measured at fair value on a non-recurring basis

Our non-financial assets, such as goodwill, intangible assets and property and equipment, as well as equity method investments, are adjusted to fair value only when an impairment charge is recognized, or the underlying investment is sold. Such fair value measurements are based predominately on Level 3 inputs. During the fourth quarter ended December 31, 2020, we recorded an impairment of $593 to carry goodwill to fair value. During the third quarter ended September 30, 2020, we recorded an impairment of $271 to carry office assets to fair value. During the second quarter ended June 30, 2020, we recorded an impairment of $1,053 to carry customer relationship intangibles to fair value. See Notes 11, 12 and 13 for details.

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Earnings per share

12 Months Ended

Dec. 31, 2020

Earnings Per Share [Abstract]

Earnings per share

24. Earnings per share

The following table presents our basic and diluted earnings per share for the years ended December 31, 2020 and 2019:

	Year ended December 31,
	2020			2019
Basic and diluted earnings per share
Net loss for the year		(142,869	)		(20,910	)
Less: Net loss for the year attributable to redeemable non-controlling interest		282			—
Net loss for the year attributable to Despegar.com, Corp.		(142,587	)		(20,910	)
Accretion of redeemable non-controlling interest to redemption value		(78	)		—
Accretion of redeemable Series A preferred stock to redemption value		(2,831	)		—
Accrued dividends of redeemable Series A preferred stock		(4,212	)		—
Dividends of redeemable Series B preferred stock		(553	)		—
Net loss for the year attributable to Despegar.com, Corp. common shareholders		(150,261	)		(20,910	)
Numerator of basic and diluted earnings per share		(150,261	)		(20,910	)
Weighted average common shares outstanding—basic and diluted		73,001			69,465
Denominator of basic and diluted earnings per share		73,001			69,465
Basic and diluted earnings per share		(2.06	)		(0.30	)

For the year ended December 31, 2020, we excluded 1,680 of outstanding stock awards and 5,405 convertible preferred stock from the calculations of diluted earnings per share attributable to common stockholders because their effect would have been antidilutive.

For the year ended December 31, 2019, we excluded 1,150 of outstanding stock awards from the calculations of diluted earnings per share attributable to common stockholders because their effect would have been antidilutive.

Basic and diluted earnings per share is presented using the two-class method required for participating securities. We consider that our Series B preferred stock to be participating securities and, in accordance with the two-class method, earnings allocated to participating securities and the related number of outstanding shares of participating securities are excluded from the computation of basic and diluted net loss per common share. If a dividend is paid on common stock, the holders of Series B preferred stock are entitled to a proportionate share of any such dividend as if they were holders of common stock (on an if-converted basis). As the holders of our Series B preferred stock do not have contractual obligation to share in the losses of the Company, the net loss attributable to common stockholders for each period is not allocated between common stock and participating securities. Accordingly, preferred stock is excluded from the calculation of basic and diluted net loss per share as the effect would have been antidilutive.

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Shareholders' equity and mezzanine equity

12 Months Ended

Dec. 31, 2020

Equity [Abstract]

Shareholders' equity and mezzanine equity

25. Shareholders’ equity and mezzanine equity

In connection with our issuances of non-convertible redeemable Series A preferred shares and warrants to L Catterton Latin America III, L.P. and convertible redeemable Series B preferred shares to Waha LATAM Investments Limited, on September 18, 2020, we amended our Memorandum of Association and Articles of Association to establish the terms of the Series A Preferred Shares and Series B Preferred Shares. See Note 6 for a description of the terms of the Series A Preferred Shares and Series B Preferred Shares.

Common Stock

We are authorized to issue an unlimited number of common shares without par value. Common stock is entitled to 1 vote per share. Common stock qualifies for dividends, when and if declared by our Board of Directors.

Preferred Stock

We are authorized to issue 150,000 series A preferred shares without par value (the “Series A Preferred Shares”) and 50,000 series B preferred shares without par value (the “Series B Preferred Shares”). Both Series A Preferred Shares and Series B Preferred Shares are not part of our shareholders’ equity, rather they are classified as mezzanine equity due to their redemption features. See Note 6 for a description of the rights attaching to the Series A Preferred Shares and Series B Preferred Shares.

The Series A Preferred Shares are classified within the mezzanine equity section on our consolidated balance sheet as of December 31, 2020 due to the provisions that could cause the equity to be redeemable at the option of the holder. The Series B Preferred Shares are classified within the mezzanine equity section on our consolidated balance sheet as of December 31, 2020 due to the provisions that cause the equity to be redeemable upon the occurrence of a change of control.

As of December 31, 2020, and 2019, we have no preferred stock outstanding as part of our shareholders’ equity.

Warrants

Pursuant to the L Catterton Investment Agreement, we agreed to issue to the Catterton Purchaser, Warrants to purchase 11,000,000 Common Shares at an exercise price of $0.01 per share (“Penny Warrants”), subject to certain customary anti-dilution adjustments provided under the Warrants, including for stock splits, reclassifications, combinations and dividends or distributions made by the Company on the Common Shares. The Penny Warrants expire ten years after the Catterton Closing Date. The Penny Warrants vest and are exercisable as of the issuance date.

We classified our warrants in our shareholders’ equity and are included in our consolidated balance sheet as of December 31, 2020 within “Additional paid-in capital”.

Treasury Stock

As of both December 31, 2020, and 2019, our treasury stock was comprised of $68,267 and 5,008,307 shares of common stock.

Share Repurchases

During the years ended December 31, 2018 and 2019, our Board of Directors approved share repurchase programs under which we were authorized to repurchase up to $75,000 and $100,000 of common stock, respectively, and were active for a period of one year as from authorization. These share repurchases could be made through a variety of methods, including in the open market, a 10b5-1 program and through privately negotiated transactions. The timing and number of common stocks repurchased depended on a variety of factors, including price, general business and market conditions, and alternative investment opportunities. We were not obligated to purchase any specific number of common stock and the share repurchase program may be suspended, terminated or modified at any time for any reason.

Shares repurchased under the authorized programs were as follows:

	Year ended December 31,
	2020		2019		2018
Number of shares repurchased		—		3,463,832		1,544,475
Average price per share		—		12.17		16.84
Total cost of repurchases (1)		—		42,167		25,999

(1) Amount excludes transaction costs.

We have no share repurchase program outstanding as of December 31, 2020.

Dividends on our Common Stock

During the years ended December 31, 2020, 2019 and 2018, we neither declared nor paid any dividends.

Dividends on our Preferred Stock

During the year ended December 31, 2020, we paid $553 of dividends to our Series B preferred shareholders.

Accumulated Other Comprehensive Income / (Loss)

The balance of accumulated other comprehensive income / (loss) as of December 31, 2020 and 2019 was comprised of foreign currency translation adjustments. These translation adjustments include foreign currency translation losses for the years ended December 31, 2020, 2019 and 2018 of $13,190, $2,441 and $13,272, respectively.

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Financial income / (expense), net

12 Months Ended

Dec. 31, 2020

Interest Income (Expense), Net [Abstract]

Financial income / (expense), net

26. Financial income / (expense), net

The following table presents the components of financial income / (expense), net:

	Year ended December 31,
	2020			2019			2018
Foreign exchange gains / (losses)		11,131			(6,982	)		(10,511	)
Gains / (losses) on derivative financial instruments		10,648			3,648			45
Interest income		3,857			7,944			7,415
Interest expense		(5,471	)		(5,767	)		(4,370	)
Factoring expense		(2,194	)		(15,379	)		(12,368	)
Bank expenses		(1,371	)		(481	)		(434	)
Others		(3,690	)		(198	)		1,056
Total financial income / (expense), net	$	12,910		$	(17,215	)	$	(19,167	)

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Stock-based compensation

12 Months Ended

Dec. 31, 2020

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-based compensation

27. Stock-based compensation

Pursuant to the Amended and Restated 2016 Stock Incentive Plan, we may grant restricted stock units (“RSUs”) and stock options to directors, officers and/or employees. As of December 31, 2020, we had 1,919,099 shares of common stock reserved for new stock-based awards under the Amended and Restated 2016 Stock Incentive Plan. We issue new shares to satisfy the exercise or release of stock-based awards.

Our employee stock options consist of service-based awards. The majority of our stock options vest over 6 years. During the year ended December 31, 2020, we started issuing RSUs as our primary form of stock-based compensation, which vest 33% or 25% after one year and will then vest quarterly over the following three or four years, respectively.

The following table presents a summary of our RSU activity:

	RSUs			Weighted average grant-date fair value
Balance as of January 1, 2018		90,626		$	7.47
Granted		1,394,159		$	12.48
Vested (1)		(164,814	)	$	10.88
Balance as of December 31, 2018		1,319,971		$	12.33
Granted		340,565		$	11.49
Vested		(362,577	)	$	12.23
Cancelled		(148,215	)	$	12.64
Balance as of December 31, 2019		1,149,744		$	12.08
Granted		1,409,680		$	7.89
Vested		(419,367	)	$	10.95
Cancelled		(460,851	)	$	10.32
Balance as of December 31, 2020		1,679,206		$	9.33

(1) 90,626 vested RSU pertained to the former 2015 Stock Incentive Plan. There is no more activity under this plan.

The total market value of shares vested during the years ended December 31, 2020, 2019 and 2018 was $3,648, $5,707 and $1,548, respectively.

The following table presents a summary of our stock option activity:

	Options			Weighted average exercise price		Remaining contractual life (in years)		Aggregate intrinsic value
Balance as of January 1, 2018		3,496,058		$	26.02		—		—
Granted		1,174,489		$	23.50		—		—
Exercised		(4,973	)	$	12.00		—		—
Forfeited / Cancelled		(1,873,213	)	$	26.43		—		—
Balance as of December 31, 2018		2,792,361		$	17.50		—		—
Granted		225,903		$	17.50		—		—
Exercised		(44,096	)	$	12.00		—		—
Forfeited / Cancelled		(436,280	)	$	17.50		—		—
Balance as of December 31, 2019		2,537,888		$	17.50		—		—
Exercised		(33,133	)	$	11.31		—		—
Forfeited / Cancelled		(1,685,242	)	$	17.05		—		—
Balance as of December 31, 2020		819,513		$	9.11		2	$	10.50
Exercisable as of December 31, 2020		423,644		$	6.03		2	$	5.43
Vested and expected to vest after December 31, 2020		819,513		$	12.41		2	$	5.07

The aggregate intrinsic value of outstanding options shown in the stock option activity table above represents the total pretax intrinsic value at December 31, 2020, based on our closing stock price of $12.81 as of the last trading date in 2020. The total intrinsic value of stock options exercised was $10,498, $34,211 and $34,653 for the years ended December 31, 2020, 2019 and 2018.

We did not grant options during the year ended December 31, 2020. The fair value of stock options granted during the years ended December 31, 2019 and 2018 were estimated at the date of grant using appropriate valuation techniques, including the Black-Scholes and Monte Carlo option-pricing models, assuming the following weighted average assumptions:

	2020		2019			2018
Risk-free interest rate		—		1.95	%		2.48	%
Expected volatility		—		39.21	%		41.52	%
Expected life (in years)		—		10			10
Weighted-average estimated fair value of options granted during the year		—		2.91			13.47

During the years ended December 31, 2020, 2019 and 2018, we recognized total stock-based compensation expense of $7,312, $11,686 and $6,766, respectively, within “General and administrative” expenses in our consolidated statements of income. Cash received from stock-based award exercises for the years ended December 31, 2020, 2019 and 2018 was $370, $564 and $136, respectively.

As of December 31, 2020, there was $20,391 of unrecognized stock-based compensation expense related to unvested stock-based awards, which is expected to be recognized in expense over a weighted-average period of 3 years.

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Leases

12 Months Ended

Dec. 31, 2020

Leases [Abstract]

Leases

28. Leases

We have operating leases for office space, customer centers and a fleet of dedicated vans. Our leases have remaining lease terms of 1 year to 15 years, some of which include options to extend the leases for up to 5 years, and some of which include options to terminate the leases within one year.

As of December 31, 2020, our weighted-average discount rate and weighted-average remaining lease term were approximately 6% and 2 to 12 years, respectively. As of December 31, 2019, our weighted-average discount rate and weighted-average remaining lease term were approximately 9% and 12 years, respectively.

We had no finance leases as of any of years presented. We had not entered into leases that had not yet commenced as of any of the years presented.

As a result of the impact of COVID-19 to the travel industry and our business and results of operations, we renegotiated some of our lease contracts which included anticipated termination, payment forgiveness and deferral of payments, and in some cases the negotiation is still open to new amendments as new events evolve.

Supplemental cash flow information related to leases were as follows:

	Year ended December 31, 2020		Year ended December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating lease payments	$	10,348	$	6,748

As of December 31, 2020, the operating lease liabilities will mature over the following periods:

	As of December 31, 2020
2021		8,650
2022		6,026
2023		4,930
2024		4,276
2025		4,331
2026 and thereafter		18,331
Total remaining lease payments	$	46,544
Less imputed interest		(9,259	)
Total operating lease liabilities:	$	37,285
Current operating lease liability		8,591
Non-current operating lease liability	$	28,694

Operating lease costs were $10,348 and $6,748 for the years ended December 31, 2020 and 2019. Under the lease accounting guidance in effect for the year ended December 31, 2018, rent expense was $4,354, which included operating lease costs as well as expense for non-lease components such as common area maintenance.

Lease Agreements

As of December 31, 2020, we have operating leases outstanding for office space with Inmobiliaria Buenaventuras, S.A. de C.V., an entity related to JBA, member of the board of Viajes Beda.

As of December 31, 2020, our weighted-average discount rate and weighted-average remaining lease term under these agreements were approximately 5.1% and 3 years, respectively. Operating lease costs under these agreements were $1,071 for the year ended December 31, 2020.

Supplemental consolidated balance sheet information related to these lease agreements were as follows:

	As of December 31, 2020
Operating lease right-of-use assets	$	692
Current lease liabilities		378
Non-current lease liabilities		341
Total operating lease liabilities	$	719

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Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2020

SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract]

Valuation and Qualifying Accounts

29. Valuation and qualifying accounts

The following table presents the changes in our valuation and qualifying accounts:

	Balance, beginning of year		Charges to earnings		Charges to other accounts			Deductions			Balance, end of year
2018
Allowance for credit expected losses		3,164		1,062		(1,098	)		(1,063	)		2,065
2019
Allowance for credit expected losses		2,065		4,294		(104	)		(3,050	)		3,205
2020
Allowance for credit expected losses		3,205		12,270		2,689			(7,369	)		10,795

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Summary of significant accounting policies (Policies)

12 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Revenue recognition

Revenue recognition

We offer traditional travel services on a stand-alone and package basis generally either through the pre-pay/merchant or the pay-at-destination/agency business models. We primarily generate revenue as a result of facilitation services, either directly or through the use of affiliated travel agencies. We consider both the traveler and the travel supplier as our customers.

Under the pre-pay/merchant model, we provide travelers access to book hotel rooms, airline seats, car rentals and destination services through our contracts with our network of travel suppliers. Our travelers pay us for merchant transactions generally when they book the reservation. We pay our travel suppliers later, generally when the travelers use the travel service. Under these transactions, we generally earn a commission from travel suppliers and service fees from travelers. Travel suppliers generally bill us for travel products sold within a 12-month period from check-out date. We recognize breakage incremental revenue from unbilled amounts when the period expires. Our revenues under the pre-pay/merchant model represented more than 75% of our total consolidated revenues for all years presented.

Under the pay-at-destination/agency model, travelers pay the travel supplier directly at destination and travel suppliers pay us our earned commissions later, generally after checkout. We receive service fees from travelers up front. Our revenue under the pay-at-destination/agency model represented less than 5% of our total consolidated revenues for all years presented.

Our primary sources of revenue are commissions and service fees, incentive fees and advertising comprising more than 90% of our consolidated revenue for all years presented.    

Commissions and service fees

We facilitate our travel suppliers the sale of their travel products and services to our travelers and travel agencies. We generally receive commissions in consideration of our facilitation services. Generally, we charge a service fee to our travelers, although this may vary depending on marketing strategies. We do not provide significant post-booking services to travelers. We consider any post-booking services beyond minor inquiries or minor administrative changes to the reservation (i.e. modifications to the original terms of the reservations) as new bookings. Accordingly, we may charge a new booking fee and administrative fees for these services. Also, if the requested change results in an incremental price of the reservation to the traveler set by the travel supplier, we receive an incremental commission from the travel supplier.

We recognize revenue upon the transfer of control of the promised facilitation services to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for those facilitation services. Generally, we recognize revenue when the booking is completed, paid and confirmed, less a reserve for cancellations based on historical experience.

We present revenue on a net basis for the majority of our transactions because the travel supplier is primarily responsible for providing the underlying travel services, we do not control the service or travel product provided by the travel supplier to the traveler and we do not bear inventory risk. Taxes assessed by a government authority, if any, are excluded from the measurement of transaction prices that are imposed on the travel related services or collected from customers (which are therefore excluded from revenue). We present revenue on a gross basis for some bookings when we pre-purchase flight seats. These transactions have been limited to date.

We partner with banks to allow our travelers the possibility of purchasing the product of their choice through financing plans established, offered and administered by such banks. Banks bear full risk of fraud, delinquency or default by travelers. When travelers elect to finance their purchases, we typically receive full payment for our services within a short period of time after booking is completed and confirmed, regardless of the payment plan selected by the traveler. However, in certain countries, we receive payment from the bank as installments become due regardless of when traveler actually makes the scheduled payments. In most cases, we receive payment before travel occurs or during travel and the period between completion of booking and reception of scheduled payments is typically one year or less. We have made use of the practical expedient in ASC 606-10-32-18 and we do not adjust the amount of consideration for the effects of a significant financing component. Beginning in late August 2020, we began providing financing to certain risk-profiled travelers only in Brazil. This activity has been very limited to date.

Our revenue from commissions and service fees represented 77%, 81% and 81% of our total consolidated revenues for the years ended December 31, 2020, 2019 and 2018, respectively.

Incentive fees

We may receive incentive fees from our travel suppliers or GDS providers if we meet certain performance conditions, for example contractually agreed volume thresholds. We recognize revenue on an accrual basis in accordance with the achievement of contractual thresholds on a case-by-case basis.

Incentive fee revenues represented 13%, 14% and 15% of our total consolidated revenues for the years ended December 31, 2020, 2019 and 2018, respectively.

Advertising

We record advertising revenue ratably over the advertising period or upon delivery of advertising material, depending on the terms of the advertising agreement.

Advertising revenues represented 4%, 3% and 3% of our total consolidated revenues for the years ended December 31, 2020, 2019 and 2018, respectively.

Other revenue:

We also derive revenue from other sources. Our other sources of revenue are not material:

Destination services

In October 2020 we began offering tours, activities and transportation services to travelers through a fleet of dedicated vans. We recognize revenue as services are provided. We present revenue on a gross basis for these transactions because we are the primary responsible for providing the underlying travel services. Our destination services represented 2% of our total consolidated revenue for the year ended December 31, 2020.

Loyalty revenue

In late 2019 we began to operate a loyalty program through which we award loyalty points to travelers who complete purchases on our websites or use the services of other program participants, such bank co-branded credit cards. Loyalty points can be redeemed for free or discounted travel products.

For loyalty points earned through travel product purchases, we apply a relative selling price approach whereby the total amount collected from each travel product sale is allocated between the travel product and the loyalty points earned. The portion of each travel product sale attributable to loyalty points is initially deferred and then recognized in loyalty revenue when the points are redeemed. Due to our recent launch of our loyalty program, lack of historical data and redemption patterns, we recognize breakage when the likelihood of the traveler exercising its remaining rights becomes remote.

For loyalty points earned through co-branded credit card partners, consideration received from the sale of loyalty points is variable and payment terms typically are within 30 days subsequent to the month of sale of loyalty points. Sales of loyalty points to business partners are comprised of two components: loyalty points and marketing (i.e. the use of intellectual property, including our brand and access to customer lists and databases, which is the predominant element in the agreements, as well as advertising, collectively, the marketing component). We allocate the consideration received from these sales of loyalty points based on the relative selling price of each product or service delivered. Accordingly, we recognize the marketing component in other revenue in the period of the loyalty points sale following the sales-based royalty method. The loyalty points component is initially deferred and then recognized in revenue when points are redeemed. This activity has been limited to date.

Interest revenue

Revenue from interest earned on financing granted to certain risk-profiled customers in Brazil is recognized over the term of the financing and is based on effective interest rates. This activity has been immaterial and very limited to date.

In the aggregate, these other revenues represented 6%, 2% and 1% of our total consolidated revenues for the years ended December 31, 2020, 2019 and 2018, respectively.

Cash and cash equivalents

Cash and cash equivalents

Cash and cash equivalents include cash on hand, deposits held with banks and other short-term liquid investments with original maturities of three months or less. Gains or losses on short-term investments are recognized in financial expenses or financial income when incurred.

Accounts receivable and allowances

Accounts receivable and allowances

Accounts receivable are generally due within thirty days and are recorded net of an allowance for expected uncollectible amounts. We consider accounts outstanding longer than the contractual payment terms as past due. The risk characteristics we generally review when analyzing our accounts receivable pools primarily include the country of origin, type of receivable, collection terms and historical or expected credit loss patterns. For each pool, we make estimates of expected credit losses for our allowance by considering a number of factors, including the length of time trade accounts receivable are past due, previous loss history continually updated for new collections data, the credit quality of our customers, current economic conditions, reasonable and supportable forecasts of future economic conditions and other factors that may affect our ability to collect from customers. The provision for estimated credit losses is recorded as “General and administrative” expenses in our consolidated statements of income. During the year ended December 31, 2020, we recorded $7,199 of incremental allowance for expected uncollectible amounts, including estimated future losses in consideration of the impact of COVID-19 pandemic on the economy and the Company. Actual future bad debt could differ materially from this estimate resulting from changes in our assumptions of the duration and severity of the impact of the COVID-19 pandemic. See Note 9 for a discussion of the adoption of ASC ASU 2016-13 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASC 326”).

Property and equipment, net

Property and equipment, net

We record property and equipment at acquisition cost, net of accumulated depreciation. We compute depreciation using the straight-line method over the estimated useful lives of the assets. Land is not depreciated. We depreciate leasehold improvement using the straight-line method, over the shorter of the estimated useful life of the improvement or the remaining term of the lease.

The estimated useful lives (in years) of the main categories of our property and equipment are as follows:

Asset	Estimated useful life (years)
Computer hardware	3
Vans	4
Office furniture and fixture	10
Buildings	50

Expenditures for repairs and maintenance are charged to expense as incurred. The cost of significant renewals and improvements is added to the carrying amount of the respective asset and it is depreciated over the life of the contract.

When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in our consolidated statements of income.  

Business combinations

Business combinations

We use the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred, and the equity interests issued, if any. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred. We assign the value of the consideration transferred to acquire a business to the tangible assets and identifiable intangible assets acquired and liabilities assumed on the basis of their fair values at the date of acquisition. Any excess purchase price over the fair value of the net tangible and intangible assets acquired is allocated to goodwill. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets. Critical estimates in valuing certain intangible assets include but are not limited to future expected cash flows from customer relationships and trademarks and tradenames, and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.

We have a period of 12 months as from the date of acquisition (the “measurement period”) to finalize the accounting for a business combination. We report provisional amounts when the accounting for a business combination is not complete by the end of the reporting period in which the business combination occurred. Any changes to provisional amounts identified during the measurement period are recognized in the reporting period in which the adjustment amounts are determined.

Goodwill

Goodwill

We record goodwill as the amount by which the aggregate of the fair value of consideration transferred, the acquisition date fair value of any previously held interest and any non-controlling interest exceeds the fair value of the assets and liabilities acquired. Goodwill is not subject to amortization and is tested at least annually for impairment, or earlier if an event occurs or circumstances change and there is an indication of impairment.

See Note 13 for further information.

Intangible assets, net

Intangible assets, net

Intangible assets acquired in business combinations are initially recorded at fair value. We determine the fair value of intangible assets using standard valuation techniques, including the income approach (discounted cash flows) and/or market approach, as considered appropriate, and based on market participant assumptions.

Indefinite-lived intangible assets such as certain trademarks and tradenames are not subject to amortization and are tested at least annually for impairment, or earlier if an event occurs or circumstances change and there is an indication of impairment.

Definite-lived intangible assets such as customer relationships, licenses and certain trademarks and tradenames are amortized over their respective estimated useful lives.

We also capitalize certain direct development costs associated with website and internal-use developed technology and include external direct costs of services and payroll costs for employees devoting time to the software projects principally related to platform development, including support systems, software coding, designing system interfaces and installation and testing of the software. These costs are recorded as definite-lived intangible assets and are generally amortized over a period of 3 to 10 years beginning when the asset is substantially ready for use. Costs incurred for enhancements that are expected to result in additional features or functionalities are capitalized and amortized over the estimated useful life of the enhancements. Costs incurred during the preliminary project stage, as well as maintenance and training costs, are expensed as incurred.

See Note 12 for further information.

Recoverability of goodwill and indefinite-lived intangible assets

Recoverability of goodwill and indefinite-lived intangible assets

Goodwill is assigned to reporting units that are expected to benefit from the synergies of the business combination as of the acquisition date. We assess goodwill and indefinite-lived intangible assets, neither of which is amortized, for impairment annually as of December 31, or more frequently, if events and circumstances indicate impairment may have occurred. In the evaluation of goodwill for impairment, we typically perform a quantitative assessment and compare the fair value of the reporting unit to its carrying value. An impairment charge is recorded based on the excess of the reporting unit’s carrying amount over its fair value. Periodically, we may choose to perform a qualitative assessment, prior to performing the quantitative analysis, to determine whether the fair value of the goodwill is more likely than not impaired.

We generally base our measurement of fair value of reporting units on an analysis of the present value of future discounted cash flows and market valuation approaches, as appropriate. The discounted cash flows model indicates the fair value of the reporting units based on the present value of the cash flows that we expect the reporting units to generate in the future. Our significant estimates in the discounted cash flows model include: our weighted average cost of capital; long-term rate of growth and profitability of our business; and working capital effects. The market valuation approach indicates the fair value of the business based on a comparison of the Company to comparable publicly traded firms in similar lines of business. Our significant estimates in the market approach model include identifying similar companies with comparable business factors such as size, growth, profitability, risk and return on investment and assessing comparable revenue and operating income multiples in estimating the fair value of the reporting units.

We believe the discounted cash flows and market approaches are the best methods for determining the fair value of our reporting units because these are the most common valuation methodologies used within the travel and internet industries.

In addition to measuring the fair value of our reporting units as described above, we consider the combined carrying and fair values of our reporting units in relation to our total fair value of equity plus debt as of the assessment date. Our equity value assumes our fully diluted market capitalization, using either the stock price on the valuation date or the average stock price over a range of dates around the valuation date, plus an estimated acquisition premium which is based on observable transactions of comparable companies. The debt value is based on the highest value expected to be paid to repurchase the debt, which can be fair value, principal or principal plus a premium depending on the terms of each debt instrument.

In our evaluation of our indefinite-lived intangible assets, we typically first perform a quantitative assessment and an impairment charge is recorded for the excess of the carrying value of indefinite-lived intangible assets over their fair value, if necessary. We base our measurement of fair value of indefinite-lived intangible assets, which primarily consist of trade name and trademarks, using the relief-from-royalty method. As with goodwill, periodically, we may choose to perform a qualitative assessment, prior to performing the quantitative analysis, to determine whether the fair value of the indefinite-lived intangible asset is more likely than not impaired.

See Notes 12 and 13 for further information.

Recoverability of intangible assets with definite lives and other long-lived assets

Recoverability of intangible assets with definite lives and other long-lived assets

Intangible assets with definite lives and other long-lived assets are carried at cost and are amortized on a straight-line basis over their estimated useful lives of 3 to 10 years and 50 years for buildings. We review the carrying value of long-lived assets or asset groups, including property and equipment, to be used in operations whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. Factors that would necessitate an impairment assessment include a significant adverse change in the extent or manner in which an asset is used, a significant adverse change in legal factors or the business climate that could affect the value of the asset, or a significant decline in the observable market value of an asset, among others. If such facts indicate a potential impairment, we would assess the recoverability of an asset group by determining if the carrying value of the asset group exceeds the sum of the projected undiscounted cash flows expected to result from the use and eventual disposition of the assets over the remaining economic life of the primary asset in the asset group. If the recoverability test indicates that the carrying value of the asset group is not recoverable, we will estimate the fair value of the asset group using appropriate valuation methodologies which would typically include an estimate of discounted cash flows. Any impairment would be measured as the difference between the asset groups carrying amount and its estimated fair value.

Assets held for sale, to the extent we have any, are reported at the lower of cost or fair value less costs to sell.

See Notes 11 and 12 for further information.

Equity method investments

Equity method investments

We use the equity method to account for investments in companies, if our investment provides us with the ability to exercise significant influence, but not control, over operating and financial policies of the investee. Our judgment regarding the level of influence over each equity method investment includes considering key factors such as our ownership interest, representation on the board of directors, participation in policy-making decisions and material intercompany transactions. We include the total of our investments in equity-method investees, including identifiable intangible assets, deferred tax liabilities, and goodwill, if any, within “Non-current other assets” in our consolidated balance sheets. We include our proportionate share of earnings and/or losses of our equity method investees in “Loss from equity investments” in our consolidated statements of income.

In the event that net losses of the investee reduce our equity-method investment carrying amount to zero, additional net losses may be recorded if we have committed to provide financial support to the investee. We regularly evaluate these investments, which are not carried at fair value, for other-than-temporary impairment. We also consider whether our equity-method investments generate sufficient cash flows from their operating or financing activities to meet their obligations and repay their liabilities when they come due. When our share in the net assets of associates is negative, we include the balance within “Non-current other liabilities” in our consolidated balance sheets. In the event we no longer have the ability to exercise significant influence over an equity-method investee, we would discontinue accounting for the investment under the equity method.

Redeemable Non-controlling Interests

Redeemable non-controlling interests

We have a non-controlling interest in a majority owned entity which was valued at fair value at acquisition date. The non-controlling interest contains certain rights, whereby we have the right but not the obligation to acquire, and the minority shareholders have the right but not the obligation to sell to us, the additional shares of the company for cash at a fixed price other than fair value. The non-controlling interest is not currently redeemable, but it is probable of becoming redeemable (the redemption depends solely on the passage of time). Accordingly, we record the non-controlling interest at the greater of (i) its acquisition date fair value as adjusted for its share (if any) of earnings, losses, or dividends or (ii) an accreted value from the date of the acquisition to the earliest redemption date, February 20, 2022. The accretion of the non-controlling interest to February 20, 2022 is recorded using the interest method.

We adopted a policy to charge the carrying value adjustment to retained earnings or, absent retained earnings, additional paid-in capital and will reduce net income available to our common shareholders in the calculation of earnings per share in accordance with the two-class method. We record the non-controlling interest amount in the “mezzanine” section of our consolidated balance sheet as of December 31, 2020, outside of shareholders’ equity.

The details of the balances and changes in the redeemable non-controlling interest are presented in Note 5.

Travel accounts payable

Travel accounts payable

Travel accounts payable comprises trade accounts payable to airlines, hotels and other travel suppliers for products and services offered. Airline suppliers are generally within thirty days of a confirmed air booking reservation. Under the pre-pay model, hotel suppliers are generally paid after traveler checks out. Generally, our contracts with hotels and other suppliers provide for a 12-month time period for invoicing us for past services. If an invoice is not received after that period, we recognize breakage revenue for the unbilled payable.

Severance payments

Severance payments

We recognize a liability for severance payments if the following criteria are met: (a) management, having the authority to approve the action, commits to a plan of termination; (b) the plan identifies the number of employees to be terminated, their job classifications or functions and their locations, and the expected completion date; (c) the plan establishes the terms of the benefit arrangement, including the benefits that employees will receive upon termination, in sufficient detail to enable employees to determine the type and amount of benefits they will receive if they are involuntarily terminated; (d) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn; and (e) the plan has been communicated to employees.

Pension information

Pension information

We do not maintain any pension plans. Certain countries in which we operate provide for pension benefits to be paid to retired employees from government pension plans and/or private pension plans. Amounts payable to such plans are accounted for on an accrual basis.

Contingent liabilities

Contingent liabilities

We have a number of tax, regulatory and legal matters outstanding, as discussed further in Note 21.

Periodically, we review the status of all significant outstanding matters to assess the potential financial exposure. When (i) it is probable that an asset has been impaired or a liability has been incurred and (ii) the amount of the loss can be reasonably estimated, we record the estimated loss in our consolidated statements of income. We provide disclosure in the notes to the consolidated financial statements for loss contingencies that do not meet both of these conditions if there is a reasonable possibility that a loss may have been incurred that would be material to the financial statements. Significant judgment is required to determine the probability that a liability has been incurred and whether such liability is reasonably estimable. We base accruals made on the best information available at the time which can be highly subjective. The final outcome of these matters could vary significantly from the amounts included in the accompanying consolidated financial statements.

Derivative financial instruments

Derivative financial instruments

We carry derivative instruments at fair value on our consolidated balance sheets. The fair values of the derivative financial instruments generally represent the estimated amounts we would expect to receive or pay upon termination of the contracts as of the reporting date. As of December 31, 2020 and 2019, our derivative instruments primarily consisted of foreign currency forward contracts. We are exposed to various market risks that may affect our consolidated results of operations, cash flows and financial position. These market risks include, but are not limited to, fluctuations in foreign currency exchange rates. Our primary foreign currency exposures are to the currencies of Argentina, Brazil and Mexico, in which we conduct a significant portion of our business activities. As a result, we face exposure to adverse movements in foreign currency exchange rates as the results of our international operations are translated from local currencies into U.S. dollars upon consolidation. Additionally, foreign currency exchange rate fluctuations on transactions denominated in currencies other than the functional currency of an entity result in gains and losses that are reflected in net income.

We use foreign currency forward contracts to economically hedge these exposures. Our goal in managing our foreign exchange risk is to reduce, to the extent practicable, our potential exposure to the changes that exchange rates might have on our earnings, cash flows and financial position. Our foreign currency forward contracts are typically short-term and, as they do not qualify for hedge accounting treatment, we classify the changes in their fair value in “Financial income / (expense), net” in our consolidated statements of income in the period that the changes occur and are classified within “Net cash provided by operating activities” in our consolidated statements of cash flows. We do not hold or issue financial instruments for speculative or trading purposes. We report the fair value of our derivative assets and liabilities on a gross basis in our consolidated balance sheets in “Other assets and prepaid expenses” and “Other liabilities”, respectively.

Leases

Leases

We determine if an arrangement is a lease, or contains a lease, at inception. Operating leases are primarily for office space, customer service centers and a fleet of dedicated vans, and, as of January 1, 2019 with the adoption of the new guidance for leasing arrangements, are included in operating lease right-of-use (“ROU”) assets, accrued expenses and other current liabilities, and operating lease liabilities on our consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

For operating leases with a term of one year or less, we have elected to not recognize a lease liability or ROU asset on our consolidated balance sheet. Instead, we recognize the lease payments as expense on a straight-line basis over the lease term. Short-term lease costs are immaterial to our consolidated statements of operations and cash flows.

Our lease agreements have insignificant non-lease components and accordingly we have elected the practical expedient to combine and account for lease and non-lease components as a single lease component.

Financial income / (expense), net

Financial income / (expense), net

We incur in financial results such as factoring interest and commissions on receivables, gains or losses on derivative financial instruments, interest income from financial investments, interest paid on financial liabilities and foreign exchange gains or losses.

Stock-based compensation

Stock-based compensation

We measure and amortize the fair value of restricted stock units (“RSUs”) and stock options as follows:

Restricted Stock Units. RSUs are stock awards that are granted to employees entitling the holder to shares of common stock as the award vests, typically over a 3 or 4-year period, but may accelerate in certain circumstances. During the year ended December 31, 2020, we started issuing RSUs as our primary form of stock-based compensation, some of them vest 33% after one year and others vest 25% after one year and will then vest yearly over the following 3 or 4 years, as appropriate. We measure the value of RSUs at fair value based on the number of shares granted and the quoted price of our common stock at the date of grant. We amortize the fair value as stock-based compensation expense over the vesting term on a straight-line basis.

Stock Options. Our employee stock options consist of service-based awards. We measure the value of stock options issued or modified, including unvested options assumed in acquisitions, if any, on the grant date (or modification or acquisition dates, if applicable) at fair value, using appropriate valuation techniques, including the Black-Scholes and Monte Carlo option pricing models. The Black-Scholes valuation models incorporate various assumptions including expected volatility, expected term and risk-free interest rates.

The expected volatility is based on historical volatility of our common stock and other relevant factors. We base our expected term assumptions on our historical experience and on the terms and conditions of the stock awards granted to employees. We amortize the fair value over the remaining explicit vesting term in the case of service-based awards. The majority of our stock options vest over 6 years.

Estimates of fair value are not intended to predict actual future events or the value ultimately realized by employees who receive these awards, and subsequent events are not indicative of the reasonableness of our original estimates of fair value.

Marketing and advertising expenses

Marketing and advertising expenses

We incur advertising expense consisting of offline costs, including television and radio advertising, and online advertising expense to promote our business. We expense the production costs associated with advertisements in the period in which the advertisement first takes place. We expense the costs of advertisement in the period during which the advertisement space or airtime is consumed. Internet advertising expenses are recognized based on the terms of the individual agreements, which is generally over the greater of (i) the ratio of the number of clicks delivered over the total number of contracted clicks, on a pay-per-click basis, or (ii) on a straight-line basis over the term of the contract. Our advertising expenses were $27,661, $147,693 and $151,372 for the years ended December 31, 2020, 2019 and 2018, respectively.

Accounting for income taxes

Accounting for income taxes

We are organized as a British Virgin Islands corporation. However, under the “anti-inversion” rules of Section 7874 of the U.S. Internal Revenue Code, we are treated as a U.S. corporation for U.S. federal tax purposes. Accordingly, we are subject to U.S. federal income tax on our worldwide income. We are subject to foreign income taxes in the jurisdictions where we operate in accordance with the respective local tax laws.

We account for income taxes under the asset and liability method that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in our financial statements or tax returns. Judgment is required in assessing the future tax consequences of events that have been recognized in our financial statements or tax returns. Variations in the actual outcome of these future tax consequences could materially impact our financial position, results of operations or effective tax rate.

Significant judgment is required in determining our worldwide income tax provision. In the ordinary course of a global business, there are many transactions and calculations where the ultimate tax outcome is uncertain. Some of these uncertainties arise as a consequence of revenue sharing and cost reimbursement arrangements among related entities, the process of identifying items of revenues and expenses that qualify for preferential tax treatment, and segregation of foreign and domestic earnings and expenses to avoid double taxation. Although we believe that our estimates are reasonable, the final tax outcome of these matters could be different from that which is reflected in our historical income tax provisions and accruals. Such differences could have a material effect on our income tax provision and net income in the period in which such determination is made.

In estimating future tax consequences, all expected future events are considered other than enactments of changes in tax laws or rates. Valuation allowances are established when necessary to reduce deferred tax assets to amounts which are more likely than not to be realized. We consider future growth, forecasted earnings, future taxable income, the mix of earnings in the jurisdictions in which we operate, historical earnings, the carryforward periods available for tax reporting purposes and prudent and feasible tax planning strategies in determining the need for a valuation allowance. In the event we were to determine that we would not be able to realize all or part of our net deferred tax assets in the future, an adjustment to the deferred tax assets valuation allowance would be charged to earnings in the period in which we make such a determination, or goodwill would be adjusted at our final determination of the valuation allowance related to an acquisition within the measurement period. If we later determine that it is more likely than not that the net deferred tax assets would be realized, we would reverse the applicable portion of the previously provided valuation allowance as an adjustment to earnings at such time.

The amount of income tax we pay is subject to ongoing audits by federal, state and foreign tax authorities, which often result in proposed assessments. Our estimate of the potential outcome for any uncertain tax issue is highly judgmental. We account for these uncertain tax issues pursuant to ASC 740, Income Taxes, which contains a two-step approach to recognizing and measuring uncertain tax positions taken or expected to be taken in a tax return. The first step is to determine if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. Although we believe we have adequately reserved for our uncertain tax positions, no assurance can be given with respect to the final outcome of these matters. We adjust reserves for our uncertain tax positions due to changing facts and circumstances, such as the closing of a tax audit, judicial rulings, refinement of estimates or realization of earnings or deductions that differ from our estimates. To the extent that the final outcome of these matters is different than the amounts recorded, such differences generally will impact our provision for income taxes in the period in which such a determination is made. Our provisions for income taxes include the impact of reserve provisions and changes to reserves that are considered appropriate and also include the related interest and penalties.

We treat taxes on global intangible low-taxed income (“GILTI”) introduced by the U.S. Tax Cuts and Jobs Act (the “Tax Act”) as period costs.

See Note 19 for further information.

Earnings per share

Earnings per share

We compute basic earnings per share by dividing our net loss or income for the year attributable to Despegar.com, Corp. common shareholders, as adjusted for preferred stock accretion and dividends accrued, by our weighted-average outstanding common shares during the year on a basic and diluted basis. Since we issue warrants for nominal consideration which vest and are exercisable as from the issuance date, we include the shares of common stock underlying the outstanding warrants when calculating our basic earnings per share.

We compute diluted earnings per share using our weighted-average outstanding common shares including the dilutive effect of stock options and convertible preferred stock as determined under the if-converted method. In periods when we recognize a net loss, we exclude the impact of outstanding stock awards and convertible preferred stock from the diluted loss per share calculation as their inclusion would have an antidilutive effect.

We present basic and diluted earnings per share using the two-class method required for participating securities. We consider that our Series B preferred stock to be participating securities and, in accordance with the two-class method, earnings allocated to participating securities and the related number of outstanding shares of participating securities are excluded from the computation of basic and diluted net loss per common share. If a dividend is paid on common stock, the holders of Series B preferred stock are entitled to a proportionate share of any such dividend as if they were holders of common stock (on an if-converted basis). As the holders of our Series B preferred stock do not have contractual obligation to share in the losses of the Company, the net loss attributable to common stockholders for each period is not allocated between common stock and participating securities. Accordingly, preferred stock is excluded from the calculation of basic and diluted net loss per share as the effect would have been antidilutive.

For additional information on how we compute earnings per share, see Note 24.

Fair value recognition, measurement and disclosure

Fair value recognition, measurement and disclosure

The carrying amounts of cash and cash equivalents and restricted cash reported on our consolidated balance sheets approximate fair value as we maintain them with various high-quality financial institutions. The accounts receivable are short-term in nature and are generally settled shortly after the sale.

We disclose the fair value of our financial instruments based on the fair value hierarchy using the following three categories:

Level 1 — Valuations based on quoted prices for identical assets and liabilities in active markets.

Level 2 — Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3 — Valuations based on unobservable inputs reflecting the Company’s own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

For additional information on items measured at fair value on a recurring or non-recurring basis, see Note 23.

Recently adopted accounting policies

Recently adopted accounting policies

Simplifying the Test for Goodwill Impairment

In January 2017, the Financial Accounting Standards Board (“FASB”) issued a new accounting update to simplify the test for goodwill impairment. The revised guidance eliminates the previously required step two of the goodwill impairment test, which required a hypothetical purchase price allocation to measure goodwill impairment. Under the revised guidance, a goodwill impairment loss will be measured at the amount by which a reporting unit’s carrying amount exceeds its fair value, not to exceed the carrying amount of goodwill. In addition, income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. The amendments also eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. We adopted and applied this update in the first quarter of 2020.

Measurement of Credit Losses on Financial Instruments

In June 2016, the FASB issued a new accounting update on the measurement of credit losses for certain financial assets measured at amortized cost and available-for-sale debt securities. For financial assets measured at amortized cost, this update requires an entity to (1) estimate its lifetime expected credit losses upon recognition of the financial assets and establish an allowance to present the net amount expected to be collected, (2) recognize this allowance and changes in the allowance during subsequent periods through net income and (3) consider relevant information about past events, current conditions and reasonable and supportable forecasts in assessing the lifetime expected credit losses. We adopted this update in the first quarter of 2020 and applied it on a modified retrospective basis. The adoption did not have a material impact on our consolidated financial statements. See Note 9 for details of the adoption of the new standard.

Disclosure requirements on fair value measurements

In August 2018, the FASB issued ASU 2018-13 “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement”. The update is related to the disclosure requirements on fair value measurements, which removes, modifies or adds certain disclosures. We adopted this update in the first quarter of 2020 and applied it on a prospective basis. The adoption did not have a material impact on our consolidated financial statements.

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract

In August 2018, the FASB issued a new accounting standard to address a customer’s accounting for implementation costs incurred in a cloud computing arrangement that is a service contract and also added certain disclosure requirements related to implementation costs incurred for internal-use software and cloud computing arrangements. The amendment aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). We adopted this update in the first quarter of 2020 and applied it on a prospective basis. The adoption did not have a material impact on our consolidated financial statements.

Recent accounting policies not yet adopted

Simplifying the Accounting for Income Taxes

In December 2019, the FASB issued a new accounting update relating to income taxes. This update provides an exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. This update also (1) requires an entity to recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax, (2) requires an entity to evaluate when a step-up in the tax basis of goodwill should be considered part of the business combination in which goodwill was originally recognized for accounting purposes and when it should be considered a separate transaction, and (3) requires that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. For public business entities, this update is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. The amendment related to franchise taxes that are partially based on income should be applied on either a retrospective basis for all periods presented or a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. All other amendments should be applied on a prospective basis. We have evaluated the impact to our consolidated financial statements of adopting this update and we do not expect it to have a material impact.

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Basis of consolidation and presentation (Tables)

12 Months Ended

Dec. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Summary of Company's Main Operating Subsidiaries

The following are our subsidiaries as of the end of the years presented:

Name of the subsidiary (in alphabetical order)	Type	Country of incorporation	As of December 31, 2020			As of December 31, 2019
			% Owned
Agencia de Viajes y Turismo Falabella S.A.S. (1)	Operating	Colombia		—			100	%
Badurey S.A.	Holding	Uruguay		100	%		100	%
BD Travelsolution, S. de R.L. de C.V.	Operating	Mexico		100	%		—
BDTP Venture, Inc.	Operating	United States		100	%		—
Beda Transportation, Inc.	Operating	United States		100	%		—
Beda Travel & Tours, Inc.	Operating	United States		100	%		—
Beda Travel, Inc.	Holding	United States		100	%		—
Click Hoteles.com, LLC	Holding	United States		100	%		—
Decolar.com Ltda.	Operating	Brazil		100	%		100	%
Decolar.com, Inc.	Holding	United States		100	%		100	%
Desonproc S.L. (6)	Operating	Spain		—			100	%
Despegar Colombia S.A.S.	Operating	Colombia		100	%		100	%
Despegar Ecuador S.A.	Operating	Ecuador		100	%		100	%
Despegar Servicios, S.A. de C.V. (5)	Operating	Mexico		100	%		100	%
Despegar.com Chile SpA	Operating	Chile		100	%		100	%
Despegar.com México S.A. de C.V.	Operating	Mexico		100	%		100	%
Despegar.com Panama S.A. (6)	Operating	Panama		—			100	%
Despegar.com Peru S.A.C.	Operating	Peru		100	%		100	%
Despegar.com USA, Inc.	Operating	United States		100	%		100	%
Despegar.com.ar S.A.	Operating	Argentina		100	%		100	%
DFinance Holding Ltda.	Holding	Brazil		100	%		—
Holidays S.A.	Operating	Uruguay		100	%		100	%
Jamiray International S.A.	Operating	Uruguay		100	%		—
Koin Administradora de Cartões e Meios de Pagamento S.A.	Operating	Brazil		84	%		—
Rivamor S.A.	Holding	Uruguay		100	%		100	%
Satylca S.C.A.	Holding	Uruguay		100	%		100	%
Servicios Online 3351 de Venezuela C.A.	Operating	Venezuela		100	%		100	%
Servicios Online S.A.S. (1)	Operating	Colombia		—			100	%
South Net Chile, LTDA	Operating	Chile		100	%		—
South Net Travel, Inc.	Operating	United States		100	%		—
South Net Turismo Colombia, S.A.	Operating	Colombia		100	%		—
South Net Turismo Perú S.R.L.	Operating	Peru		100	%		—
South-Net Turismo Brasil, LTDA	Operating	Brazil		100	%		—
South-Net Turismo S.A.	Operating	Argentina		100	%		—
Tecnobelt S.A.	Operating	Uruguay		100	%		100	%
Transporturist, S.A. de C.V.	Operating	Mexico		100	%		—
Travel Reservations S.R.L.	Operating	Uruguay		100	%		100	%
Viaceco Travel, S.A. de C.V. (5)	Operating	Mexico		100	%		—
Viajes Beda, S.A. de C.V.	Operating	Mexico		100	%		—

Name of the subsidiary (in alphabetical order)	Type	Country of incorporation	As of December 31, 2020			As of December 31, 2019
Viajes Despegar.com O.N.L.I.N.E. S.A.	Operating	Costa Rica		100	%		100	%
Viajes Falabella S.A. (2)	Operating	Argentina		—			100	%
Viajes Falabella S.A.C. (3)	Operating	Peru		—			100	%
Viajes Falabella SpA (4)	Operating	Chile		—			100	%

(1) Merged with and into Despegar Colombia S.A.S.

(2) Merged with and into Despegar.com.ar S.A.

(3) Merged with and into Despegar.com Peru S.A.C.

(4) Merged with and into Despegar.com Chile SpA.

(5) Merged with and into Despegar.com México S.A. de C.V. on January 1, 2021.

(6) Liquidated as of December 31, 2020.

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Summary of significant accounting policies (Tables)

12 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Summary of Estimated Useful Lives of Property and Equipment

The estimated useful lives (in years) of the main categories of our property and equipment are as follows:

Asset	Estimated useful life (years)
Computer hardware	3
Vans	4
Office furniture and fixture	10
Buildings	50

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Acquisitions (Tables)

12 Months Ended

Dec. 31, 2020

Business Acquisition [Line Items]

Summary of Intangible assets acquired

Intangible assets acquired consisted of the following:

	Amount		Estimated useful life (years)
Trademarks		13,299		20
Domains		204		20
Developed technology		8,206		2.5
Licenses		634		1.3
Customer relationships		29,415		7
Total intangible assets acquired	$	51,758

Business Acquisition, Pro Forma Information [Table Text Block]

The following table summarizes the revenue and net loss (including purchase accounting amortization and the impact of intercompany eliminations) of the Best Day Group included in our consolidated statements of income for the year ended December 31, 2020 since October 1, 2020, the date of acquisition:

	Period from the date of acquisition to December 31, 2020
Revenue	$	14,125
Net loss	$	(14,983	)

The following pro forma summary presents certain consolidated information as if the acquisition of the Best Day Group had occurred on January 1, 2019:

	For the years ended December 31,
	2020			2019
Revenue	$	165,122		$	658,147
Net loss	$	(242,261	)	$	(38,241	)

Best Day Group [Member]

Business Acquisition [Line Items]

Summary of preliminary purchase price allocation

The following table summarizes the estimated preliminary purchase price:

Consideration:
Fair value of purchase price payable on October 1, 2023		8,642
Fair value of contingent consideration payable on October 1, 2024		1,526
Total consideration as of acquisition date	$	10,168
Recognized amounts of assets acquired and liabilities assumed:
Cash and cash equivalents		5,404
Restricted cash		2,763
Trade accounts receivable, net of credit expected loss		9,122
Related party receivable		2,337
Lease right-of-use assets		7,415
Property and equipment, net		8,836
Intangible assets, net		51,758
Deferred tax assets		12,851
Seller indemnification		11,814
Other assets and prepaid expenses		33,446
Total assets acquired	$	145,746
Accounts payable and accrued expenses		7,948
Travel accounts payable		82,170
Related party payable		266
Short-term and long-term debt		10,618
Lease liabilities		7,955
Contingent liabilities (1)		22,436
Deferred revenue		775
Taxes payable (2)		29,573
Deferred tax liabilities		11,015
Promissory notes issued (3)		13,928
Other liabilities		16,534
Total liabilities assumed	$	203,218
Total net liabilities assumed	$	57,472
Goodwill	$	67,640

(1) Includes $17,933 of identified acquisition-date probable contingencies related to non-income tax and $4,503 of identified acquisition-date probable contingencies related to social security and other matters. Amount reflects the best estimate of probable outcome. See Note 21.

(2) Includes a liability of $28,955 for acquisition-date unrecognized tax benefits related to uncertain tax positions taken by the acquiree prior to our acquisition. See Note 19.

(3) As part of the Acquisition Agreement, we legally assumed a debt that the acquired companies had with its previous shareholders. We issued four promissory notes for an aggregate nominal amount of $14,323 (which fair value was $13,928 as of the date of acquisition). The notes accrue interest at a fixed rate of 5% per annum and will be payable in cash on October 1, 2023.

Koin Administradora De Cartoes E Meios De Pagamentos SA [Member]

Business Acquisition [Line Items]

Summary of preliminary purchase price allocation

The following table presents the final purchase price allocation as of December 31, 2020:

Consideration:
Fair value of purchase price	$	977
Redeemable non-controlling interest:	$	2,655
Recognized amounts of assets acquired and liabilities assumed:
Cash and cash equivalents		322
Restricted cash		4
Trade accounts receivable, net of credit expected loss		1,194
Lease right-of-use assets		177
Property and equipment, net		99
Intangible assets, net		743
Other assets and prepaid expenses		66
Total assets acquired	$	2,605
Accounts payable and accrued expenses		1,721
Short-term debt		1,250
Lease liabilities		178
Contingent liabilities		19
Taxes payable		684
Deferred tax liabilities		253
Other liabilities		479
Total liabilities assumed	$	4,584
Total net liabilities assumed	$	1,979
Goodwill	$	5,611

Viajes Falabella [Member]

Business Acquisition [Line Items]

Summary of preliminary purchase price allocation

The following table presents the final purchase price allocation as of December 31, 2019 and the reconciliation with “Payments for acquired business, net of cash acquired” line item in our consolidated statements of cash flows for the year ended December 31, 2019:

Consideration:
Fair value of purchase price	$	22,196
Recognized amounts of assets acquired and liabilities assumed:
Cash and cash equivalents		11,272
Trade accounts receivable, net of credit expected loss		11,828
Other assets and prepaid expenses		34,611
Property and equipment, net		2,420
Intangible assets, net		3,663
Total assets acquired	$	63,794
Travel accounts payable		36,656
Other liabilities		15,807
Total liabilities assumed	$	52,463
Total net assets acquired	$	11,331
Goodwill	$	10,865

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Redeemable non-controlling interest (Tables)

12 Months Ended

Dec. 31, 2020

Temporary Equity Disclosure [Abstract]

Redeemable non-controlling interest

Reconciliation of changes in redeemable non-controlling interests

Beginning balance as of January 1, 2020	$	—
Initial fair value of redeemable non-controlling interest of acquired businesses		2,655
Comprehensive loss adjustments:
Net loss attributable to redeemable non-controlling interest		(282	)
Other comprehensive loss attributable to redeemable non-controlling interest		170
Additional paid-in-capital adjustments:
Adjustment to redemption value		78
Ending balance as of December 31, 2020	$	2,621

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Debt (Tables)

12 Months Ended

Dec. 31, 2020

Debt Disclosure [Abstract]

Summary of outstanding short-term and long-term debt

The following table sets forth our outstanding short-term and long-term debt:

	Book Value December 31,				Fair Value December 31,
	2020		2019		2020		2019
Loan with HSBC Mexico, S.A. principal amount 100,000,000 Mexican Pesos		5,026		—		5,026		—
Loan with Bank Sabadell Mexico S.A. principal amount 83,831,941 Mexican Pesos		3,833		—		3,833		—
Loan with Bank Sabadell Mexico S.A. principal amount 20,000,000 Mexican Pesos		1,005		—		1,005		—
Loan with Banco de Crédito e Inversiones principal amount 500,000,000 Chilean Pesos		699		—		694		—
Long-term debt, including current maturities	$	10,563		—	$	10,558		—
Less current maturities of long-term debt		196		—		196		—
Long-term debt, excluding current maturities	$	10,367		—	$	10,362		—
Short-term debt, including current maturities of long-term debt		8,949		19,209		8,949		19,209
Total short-term and long-term debt	$	19,316		19,209	$	19,311		19,209

Summary of changes in debt

The changes in the balance of the total debt as of December 31, 2020 and December 31, 2019 consist of the following:

	As of December 31, 2020			As of December 31, 2019
Balance, beginning of year	$	19,209		$	31,162
Acquisitions		9,335			—
Borrowings obtained		640			—
Payment of borrowings		(375	)		—
Accrued interest		196			—
Interest paid		(195	)		—
Foreign currency translation adjustment		962			—
Short-term loans, net		(10,456	)		(11,953	)
Balance, end of year	$	19,316		$	19,209

Summary of long-term debt instruments

The following table shows the details of the long-term debt outstanding as of December 31, 2020:

Loan	Issuance date	Maturity date	Currency	Principal amount in original currency		Principal amount in U.S. dollars		Interest rate	Interest payment
HSBC Mexico, S.A.	February 2020	March 2023	Mexican Pesos		100,000,000		5,100	TIIE(1)+3.25%		Monthly
Bank Sabadell Mexico S.A.	January 2020	March 2023	Mexican Pesos		83,831,941		4,433	TIIE(1)+2.5%		Monthly
Bank Sabadell Mexico S.A.	January 2020	January 2022	Mexican Pesos		20,000,000		1,058	TIIE(1)+3.2%		Monthly
Banco de Crédito e Inversiones	June 2020	May 2024	Chilean Pesos		500,000,000		640	3.50		Monthly

(1) TIIE represents an interbank interest rate in Mexico. As of December 31, 2020, interest rates for HSBC Mexico, S.A. loan, Bank Sabadell I loan and Bank Sabadell II loan were 7.5%, 6.75% and 7.45%, respectively.

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Cash and cash equivalents and restricted cash (Tables)

12 Months Ended

Dec. 31, 2020

Cash and Cash Equivalents [Abstract]

Schedule of Cash and Cash Equivalents

Cash and cash equivalents consist of the following:

	As of December 31, 2020		As of December 31, 2019
Cash on hand		121		42
Bank deposits		201,217		118,933
Time deposits		45,031		153,838
Money market funds		88,061		36,374
	$334,430		$309,187

Summary of cash and cash equivalents and restricted cash

The following table reconciles our cash and cash equivalents and restricted cash as reported in our consolidated balance sheets to the total amount shown in our consolidated statements of cash flows:

	As of December 31, 2020		As of December 31, 2019		As of December 31, 2018
As included in our consolidated balance sheets:
Cash and cash equivalents		334,430		309,187		346,480
Restricted cash		16,055		4,457		5,709
Total cash and cash equivalents and restricted cash as shown in our consolidated statements of cash flows:	$	350,485	$	313,644	$	352,189

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Measurement of credit losses on financial instruments (Tables)

12 Months Ended

Dec. 31, 2020

Receivables [Abstract]

Summary of the impact of adopting ASC 326

The following table illustrates the impact of adopting ASC 326 as of January 1, 2020:

	As of January 1, 2020
	As reported under previous GAAP		Impact of ASC 326 adoption		As reported under ASC 326
Allowance for credit expected losses:		3,205		1,076		4,281

Summary of the Activity on the Expected Credit Loss Allowance for Trade Receivables

The following table shows the activity on the expected credit loss allowance for trade receivables during the years ended December 31, 2020 and 2019:

	As of December 31, 2020			As of December 31, 2019
Balance, beginning of year	$	3,205		$	2,065
Impact of adoption of ASC 326		1,076			—
Provisions		12,270			4,294
Recoveries and write-off		(7,369	)		(3,050	)
Foreign currency translation adjustment		1,613			(104	)
Balance, end of year	$	10,795		$	3,205

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Other Assets and Prepaid Expenses (Tables)

12 Months Ended

Dec. 31, 2020

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Summary of Other Current Assets and Prepaid Expenses

Other current assets and prepaid expenses consist of the following:

	As of December 31, 2020		As of December 31, 2019
Tax credits		34,465		37,067
Prepaid expenses and advance to suppliers		15,664		29,083
Prepaid advertising		175		1,483
Others		1,991		2,061
	$	52,295	$	69,694

Summary of Other Assets, Non-current

Other non-current assets consist of the following:

	As of December 31, 2020		As of December 31, 2019
Deferred tax assets		57,742		25,351
Seller indemnification		14,053		—
	$	71,795	$	25,351

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Property and equipment, net (Tables)

12 Months Ended

Dec. 31, 2020

Property, Plant and Equipment [Abstract]

Summary of Property and Equipment

Property and equipment, net consists of the following:

	As of December 31, 2020			As of December 31, 2019
Computer hardware and software		48,895			31,966
Office furniture and fixtures		17,909			21,882
Buildings		3,128			2,086
Vans		1,571			—
Land		266			41
Total property and equipment	$	71,769		$	55,975
Accumulated depreciation (1)		(49,036	)		(34,770	)
Impairment charge		(271	)		—
Total property and equipment, net	$	22,462		$	21,205

(1)  Accumulated depreciation as of December 31, 2020 comprised of $37,171, $10,169, $852 and $844 for computer hardware and software, office furniture and fixtures, buildings and vans, respectively. Accumulated depreciation as of December 31, 2019 comprised of $23,955, $10,345 and $470 for computer hardware and software, office furniture and fixtures and buildings, respectively.

Summary of movements in property, plant and equipment

The changes in the balance of property and equipment for the years ended December 31, 2020 and 2019 consist of the following:

	As of December 31, 2020			As of December 31, 2019
Balance, beginning of year	$	21,205		$	19,716
Additions		3,458			5,942
Disposals		—			(597	)
Write-off of leasehold improvements		(3,661	)		—
Acquisitions (1)		8,935			2,420
Depreciation		(7,981	)		(6,659	)
Impairment charge		(271	)		—
Foreign currency translation adjustment		777			383
Balance, end of year	$	22,462		$	21,205

(1)  Acquired property and equipment was comprised mainly of computer hardware and software, office furniture and fixtures and a fleet of dedicated vans.

Summary of Depreciation expense property, plant and equipment

Depreciation expense for the years ended December 31, 2020, 2019 and 2018 was classified as follows:

	For the year ended December 31, 2020		For the year ended December 31, 2019		For the year ended December 31, 2018
Technology and product development		4,351		4,001		1,036
General and administrative		3,377		2,658		3,949
Selling and marketing		253		—		—
Total depreciation expense	$	7,981	$	6,659	$	4,985

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Intangible assets, net (Tables)

12 Months Ended

Dec. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets and Goodwill [Table Text Block]

Indefinite-lived and definite-lived intangible assets, net consists of the following:

	As of December 31, 2020			As of December 31, 2019
Indefinite-lived intangible assets:
Trademarks and domains		13,882			13,882
Definite-lived intangible assets:
Trademarks and domains		14,296			—
Developed technology		91,107			72,532
Licenses		9,823			1,795
Customer relationships		35,706			3,663
Total intangible assets	$	164,814		$	91,872
Accumulated amortization (1)		(67,266	)		(42,253	)
Impairment charge		(1,053	)		—
Total intangible assets, net	$	96,495		$	49,619

(1)  Accumulated amortization as of December 31, 2020 comprised of $56,770, $7,751 and $2,745 for developed technology, licenses and customer relationships, respectively. Accumulated amortization as of December 31, 2019 comprised of $41,605, $154 and $494 for developed technology, licenses and customer relationships, respectively.

Summary of Finite-Lived Intangible Assets

The changes in the balance of intangible assets, net as of December 31, 2020 and December 31, 2019 consist of the following:

	As of December 31, 2020			As of December 31, 2019
Balance, beginning of year	$	49,619		$	37,512
Additions		14,028			24,614
Acquisitions (1)		52,501			3,663
Amortization		(21,699	)		(16,137	)
Impairment charge		(1,053	)		—
Foreign currency translation adjustment		3,099			(33	)
Balance, end of year	$	96,495		$	49,619

(1) Acquired intangible assets was comprised mainly of customer relationships, trademarks and developed technology.

Summary of Amortization expense Of Intangible Assets

Amortization expense for the years ended December 31, 2020, 2019 and 2018 was classified as follows:

	For the year ended December 31, 2020		For the year ended December 31, 2019		For the year ended December 31, 2018
Technology and product development		17,190		14,198		9,495
General and administrative		3,753		1,523		645
Selling and marketing		756		416		—
Total amortization expense	$	21,699	$	16,137	$	10,140

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

The estimated future amortization expense related to intangible assets with definite lives as of December 31, 2020, assuming no subsequent impairment of the underlying assets, is as follows:

Year	Amount
2021		16,794
2022		16,652
2023		16,641
2024		6,445
2025		6,259
2026 and thereafter		19,822
Total	$	82,613

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Goodwill (Tables)

12 Months Ended

Dec. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of goodwill

Goodwill consists of the following:

	As of December 31, 2020		As of December 31, 2019
Goodwill	$	123,217	$	46,956

Summary Of Movements In Goodwill

The following table presents the changes in goodwill by reportable segment:

	Air			Packages, Hotels and Other Travel Products			Total
Balance as of January 1, 2019	$	36,207		$	—		$	36,207
Additions		2,772			8,093			10,865
Foreign currency translation adjustment		(96	)		(20	)		(116	)
Balance as of December 31, 2019	$	38,883		$	8,073		$	46,956
Additions		2,328			70,923			73,251
Impairment charge		(593	)		—			(593	)
Foreign currency translation adjustment		(2,677	)		6,280			3,603
Balance as of December 31, 2020	$	37,941		$	85,276		$	123,217

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Accounts Payable and Accrued Expenses (Tables)

12 Months Ended

Dec. 31, 2020

Payables and Accruals [Abstract]

Summary of Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consist of the following:

	As of December 31, 2020		As of December 31, 2019
Marketing suppliers		7,706		29,957
Unbilled suppliers		15,360		10,742
Other suppliers		9,095		18,974
	$	32,161	$	59,673

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Travel Accounts Payable (Tables)

12 Months Ended

Dec. 31, 2020

Text Block [Abstract]

Schedule of Travel Accounts Payables

Travel accounts payable consist of the following:

	As of December 31, 2020		As of December 31, 2019
Hotels and other travel service suppliers (1)		131,744		179,397
Cancelled reservations pending payment to travelers		90,764		—
Airlines		6,927		27,557
	$	229,435	$	206,954

(1) Includes $76,603 and $140,987 as of December 31, 2020 and December 31, 2019, respectively, for deferred merchant bookings which will be due after the traveler has checked out.

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Other Liabilities (Tables)

12 Months Ended

Dec. 31, 2020

Other Liabilities Disclosure [Abstract]

Summary of Other Current Liabilities

Other current liabilities consist of the following:

	As of December 31, 2020		As of December 31, 2019
Taxes payable		32,955		10,958
Salaries payable		14,444		25,196
Seller financing Viajes Falabella (1)		5,624		5,477
Other		3,086		5,091
	$	56,109	$	46,722

Summary of Other Non-current Liabilities

Other non-current liabilities consist of the following:

	As of December 31, 2020		As of December 31, 2019
Seller financing Viajes Falabella		—		5,219
Taxes payable		598		1,427
Deferred tax liabilities		11,111		—
Purchase price payable for Best Day Group (2)		8,768		—
Accrued earnout liability (3)		3,765		—
Promissory notes issued (4)		14,490		—
Equity method investments		2,059		—
Other		4,122		—
	$	44,913	$	6,646

(1)  As of December 31, 2020, this amount corresponds to the last installment due June 2021.

(2)  We will pay the purchase price on October 1, 2023. See Note 4 for details.

(3)  Under the terms of the acquisition of the Best Day Group, we may be required to pay an earnout amount up to a maximum of $20,000 on October 1, 2024. The amount represents the fair value of the earnout consideration as of December 31, 2020. Changes in the fair value of the earnout consideration are charged to earnings in the period incurred. See Note 21 for details of the earnout consideration.

(4)  Under the terms of the acquisition of the Best Day Group, we legally assumed a debt that Best Day Group had with their prior shareholders. We issued four promissory notes for an aggregate nominal amount of $14,323 which accrue interest at a fixed rate of 5% and are payable on October 1, 2023. The fair value of this debt as of December 31, 2020 was $14,341.

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Derivative financial instruments (Tables)

12 Months Ended

Dec. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Summary of Derivative Position

As of December 31, 2020, and 2019, derivative financial instruments consist of foreign currency forward contracts of a short-term nature. The following table shows the derivative financial position as of the end of each year:

	Local currency	Notional amount		Type	Maturity	Fair value
2020
	Brazilian reais	$	10,500	Sell	Jan / Feb 21		77
	Mexican pesos	$	15,000	Sell	Jan 21		395
	Mexican pesos	$	10,000	Sell	Jan 21		262
	Mexican pesos	$	5,000	Sell	Jan 21		51
	Mexican pesos	$	10,000	Sell	Feb 21		166
	Mexican pesos	$	10,000	Sell	Feb 21		103
	Mexican pesos	$	10,000	Sell	Feb 21		103

	Local currency		Notional amount	Type	Maturity	Fair value
2019
	Argentinian pesos	$	15,000	Purchase	Jan - 20	(360	)
	Chile pesos	$	24,500	Purchase	Jan / Feb / Mar - 20	(848	)
	Colombian pesos	$	2,000	Purchase	Jan - 20	(63	)
	Argentinian pesos	$	6,000	Sell	Jan - 20	335
	Mexican pesos	$	7,000	Sell	Jan / Feb - 20	119

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Restructuring and Related Reorganization Charges (Tables)

12 Months Ended

Dec. 31, 2020

Restructuring and Related Activities [Abstract]

Summary of Restructuring and Related Reorganization Activity

The following table summarizes the restructuring and related reorganization activity for the year ended December 31, 2020:

	Employee severance and benefits			Other			Total
Accrued liability as of January 1, 2020	$	—		$	—		$	—
Charges		12,961			399			13,360
Payments		(12,961	)		(248	)		(13,209	)
Accrued liability as of December 31, 2020	$	—		$	151		$	151

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Income taxes (Tables)

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Summary of U.S and Foreign (loss) / Income Before Income Taxes

The following table summarizes our U.S. and foreign (loss) / income before income taxes for the years ended December 31, 2020, 2019 and 2018:

	Year ended December 31,
	2020			2019			2018
U.S.		(15,510	)		1,942			17,296
Foreign		(148,797	)		(28,077	)		8,927
Total	$	(164,307	)	$	(26,135	)	$	26,223

Summary of Income Tax Expense Components

The following table summarizes our provision for income taxes for the years ended December 31, 2020, 2019 and 2018:

	Year ended December 31,
	2020			2019			2018
Current income tax expense:
U.S. Federal		1,424			1,035			(1,608	)
Foreign		(4,440	)		(8,235	)		(14,210	)
Total current income tax expense		(3,016	)		(7,200	)		(15,818	)
Deferred income tax expense:
U.S. Federal		2,653			—			—
Foreign		21,801			12,425			8,749
Total deferred income tax expense		24,454			12,425			8,749
Income tax benefit / (expense)	$	21,438		$	5,225		$	(7,069	)

Summary of Deferred Tax Assets Liabilities by Current and Non-current

As of December 31, 2020 and 2019, the significant components of our deferred tax assets and deferred tax liabilities were as follows:

	As of December 31, 2020			As of December 31, 2019
Non-current deferred tax assets		66,768			36,700
Total deferred tax assets		66,768			36,700
Less valuation allowance		(9,026	)		(11,349	)
Net deferred tax assets		57,742			25,351
Non-current tax liabilities		(11,111	)		—
Total deferred tax liabilities		(11,111	)		—
Total deferred tax	$	46,631		$	25,351

Summary of Tax Loss Carryforwards Expiry

As of December 31, 2020, we have both foreign and U.S. net operating loss carryforwards (“NOLs”) of $143,823. If not utilized, the NOLs will begin to expire, as follows:

	As of December 31, 2020
Expiration date	U.S.		Foreign
Expires 2021		—		536
Expires 2022		—		977
Expires 2023		—		31,162
Expires 2024 and thereafter		—		58,464
Without expiration dates		1,305		51,379
Total NOLs (1)	$	1,305	$	142,518

(1) A partial valuation allowance is booked as of December 31, 2020 in order to reserve $58,765 of the tax loss carryforwards detailed above.

Summary of Composition of Deferred Tax Assets and Liabilities

The following table summarizes the composition of deferred tax assets and deferred tax liabilities as of December 31, 2020 and 2019:

	As of December 31, 2020			As of December 31, 2019
Tax loss carryforwards		33,036			25,717
Allowance for credit expected losses		4,161			462
Royalties		533			69
Provisions and other assets		22,978			11,319
Property and equipment		268			(438	)
Intangible assets		(9,377	)		—
Others		4,058			(429	)
Total deferred tax assets, net before valuation allowance	$	55,657		$	36,700
Less valuation allowance		(9,026	)		(11,349	)
Total deferred tax assets, net after valuation allowance	$	46,631		$	25,351

Summary of Reconciliation of Difference between Actual Provision for Income Taxes and Provision Computed by Applying Weighted Average Income Tax Rate

A reconciliation of the provision for income taxes computed by applying the weighted average income tax rate for the years ended December 31, 2020, 2019 and 2018 to total income tax expense is as follows:

	Year ended December 31,
	2020			2019			2018
Net (loss) / income before income tax	$	(164,307	)	$	(26,135	)	$	26,223
Weighted average income tax rate (3)		27	%		29	%		39	%
Income tax (benefit) / expense at weighted average income tax rate	$	(43,651	)	$	(7,474	)	$	10,273
Permanent differences:
Non-taxable income (1)		7,959			(469	)		(1,448	)
Foreign non-creditable withholding tax (2)		1,471			4,439			4,193
Non-deductible expenses		12,161			1,054			1,346
Currency translation adjustment		1,289			1,891			1,902
Tax credits recovery		12			(157	)		—
Others		20			553			540
Provisions and contingencies		1,747			—			—
True up		849			(2,693	)		1,204
Change in valuation allowance		(3,367	)		(5,010	)		(10,941	)
Change in tax rate		72			2,641			—
Income tax (benefit) / expense	$	(21,438	)	$	(5,225	)	$	7,069

(1) Includes tax (benefits) / losses generated by operations located in the Uruguayan “Free Trade Zone”.

(2)  Includes foreign withholding taxes on royalties and services.

(3) We use a weighted average rate for the income tax reconciliation, since the majority of our operations are outside the U.S. The calculation is performed based on an average between the enacted tax rates of the foreign jurisdictions.

Summary of Changes in Valuation Allowance

The following table presents the changes in our valuation allowance for the years ended December 31, 2020, 2019 and 2018:

	Valuation allowance
Balance as of January 1, 2018	$	42,584
Increases		997
Decreases		(25,574	)
Balance as of December 31, 2018	$	18,007
Increases		5,892
Decreases		(12,550	)
Balance as of December 31, 2019	$	11,349
Increases		754
Decreases		(3,077	)
Balance as of December 31, 2020	$	9,026

Summary of NOLs by country of origin

The following table shows the breakdown of our NOLs by country of origin as of December 31, 2020:

Country	NOL gross amount		Expiration terms
Brazil		48,584	No expiration. Offset limitation to 30% of taxable income
Mexico		47,824	10 years
Argentina		35,408	5 years
Colombia		7,559	12 years
Others		4,448
Total NOLs	$	143,823

Summary of income tax contingencies

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits and interest is as follows:

	Year ended December 31,
	2020		2019		2018
Balance, beginning of year		—		—		—
Increases to tax positions related to current year		—		—		—
Increases to tax positions related to prior years (1)		31,778		—		—
Decreases to tax positions related to prior years		—		—		—
Reductions due to lapsed statute of limitations		—		—		—
Settlements during current year		—		—		—
Interest and penalties		1,128		—		—
Balance, end of year	$	32,906	$	—	$	—

(1) Corresponds to uncertain tax positions recognized as part of the acquisition of the Best Day Group. See Note 4.

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Segment information (Tables)

12 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

Schedule of Segment Information

The following tables present our segment information for the years ended December 31, 2020, 2019 and 2018:

	Year ended December 31, 2020
	Air			Packages, Hotels and Other travel products			Unallocated			Total Consolidated
Revenue	$	62,713		$	68,621		$	—		$	131,334
Adjusted EBITDA	$	(32,890	)	$	(82,377	)	$	(6,546	)	$	(121,813	)
Depreciation and amortization		(9,784	)		(9,784	)		(10,112	)		(29,680	)
Stock-based compensation expense		—			—			(7,312	)		(7,312	)
Impairment charges		—			—			(1,917	)		(1,917	)
Restructuring charges		—			—			(13,360	)		(13,360	)
Acquisition transaction costs		—			—			(3,135	)		(3,135	)
Operating loss	$	(42,674	)	$	(92,161	)	$	(42,382	)	$	(177,217	)
Financial income, net		—			—			—			12,910
Loss before income tax		—			—			—		$	(164,307	)
Income tax benefit		—			—			—			21,438
Net loss for the year		—			—			—		$	(142,869	)
Net loss attributable to redeemable non-controlling interest		—			—			—			282
Net loss attributable to Despegar.com, Corp.		—			—			—		$	(142,587	)

	Year ended December 31, 2019
	Air			Packages, Hotels and other travel products			Unallocated			Total Consolidated
Revenue	$	201,638		$	323,238		$	—		$	524,876
Adjusted EBITDA	$	3,346		$	36,546		$	(13,249	)	$	26,643
Depreciation and amortization		(7,716	)		(7,716	)		(7,364	)		(22,796	)
Stock-based compensation expense		—			—			(11,686	)		(11,686	)
Impairment charges		—			—			—			—
Restructuring charges		—			—			—			—
Acquisition transaction costs		—			—			(1,081	)		(1,081	)
Operating (loss) / income	$	(4,370	)	$	28,830		$	(33,380	)	$	(8,920	)
Financial expense, net		—			—			—			(17,215	)
Loss before income tax		—			—			—		$	(26,135	)
Income tax benefit		—			—			—			5,225
Net loss for the year		—			—			—		$	(20,910	)

	Year ended December 31, 2018
	Air			Packages, Hotels and other travel products			Unallocated			Total Consolidated
Revenue	$	214,804		$	315,810		$	—		$	530,614
Adjusted EBITDA	$	27,790		$	37,739		$	2,115		$	67,644
Depreciation and amortization		(4,630	)		(4,582	)		(5,913	)		(15,125	)
Stock-based compensation expense		—			—			(6,766	)		(6,766	)
Impairment charges		—			—			(363	)		(363	)
Restructuring charges		—			—			—			—
Acquisition transaction costs		—			—			—			—
Operating income / (loss)	$	23,160		$	33,157		$	(10,927	)	$	45,390
Financial expense, net		—			—			—			(19,167	)
Income before income tax		—			—			—		$	26,223
Income tax expense		—			—			—			(7,069	)
Net income for the year		—			—			—		$	19,154

Summary of Revenues by Segment and Business Model

The following table presents our revenues by business model, revenue type and country for the years ended December 31, 2020, 2019 and 2018:

	Year ended December 31,
	2020		2019		2018
Business Model:
Prepay/Merchant Model		102,591		407,258		415,812
Pay-at-Destination/Agency Model		1,305		13,130		20,143
Others (1)		27,438		104,488		94,659
Total Revenue	$	131,334	$	524,876	$	530,614
Revenue Type:
Commissions and service fees		100,908		426,082		428,722
Incentive fees		17,040		72,912		80,710
Advertising		5,040		15,063		15,170
Others (2)		8,346		10,819		6,012
Total Revenue	$	131,334	$	524,876	$	530,614
Country:
Argentina		16,112		98,946		122,656
Brazil		45,289		159,676		165,688
Uruguay		9,240		131,160		142,902
Mexico		30,801		39,500		38,243
Other countries (3)		29,892		95,594		61,125
Total Revenue	$	131,334	$	524,876	$	530,614

(1) Others includes incentive fees, advertising, breakage, loyalty and interest revenue.

(2) Others includes breakage, loyalty, destination services and interest revenue.

(3) Other countries include Chile, Peru, Colombia, Ecuador and United States.

Schedule of Allocation of Long-lived Assets Based on Geography

The following table presents our main assets by country:

	As of December 31, 2020		As of December 31, 2019
Goodwill:
Argentina		2,455		3,048
Brazil		14,132		10,508
Mexico		81,137		7,543
Uruguay		16,839		16,839
Other countries (1)		8,654		9,018
	$	123,217	$	46,956
Intangible assets:
Argentina		28,104		28,487
Uruguay		28,500		14,859
Mexico		36,546		—
Other countries (2)		3,345		6,273
	$	96,495	$	49,619

	As of December 31, 2020		As of December 31, 2019
Property and equipment:
Argentina		9,661		7,067
Brazil		2,056		3,779
Mexico		3,538		—
Uruguay		499		929
United States		3,304		4,357
Other countries (3)		3,404		5,073
	$	22,462	$	21,205

(1) Other countries include Chile, Peru and Colombia

(2) Other countries include Chile, Peru, Colombia, Brazil and United States.

(3) Other countries include Chile, Peru, Colombia and Ecuador.

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Fair value measurements (Tables)

12 Months Ended

Dec. 31, 2020

Fair Value Disclosures [Abstract]

Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

Financial assets and liabilities carried at fair value at December 31, 2020 are classified in the categories described in the table below:

	Level 1		Level 2		Level 3			Total
Assets
Cash equivalents
Money market funds		88,061		—		—			88,061
Time deposits		45,031		—		—			45,031
Derivatives
Foreign currency forwards		—		725		—			725
Total assets at fair value	$	133,092	$	725	$	—		$	133,817
Liabilities
Accrued earnout liability		—		—		(3,765	)		(3,765	)
Total liabilities at fair value	$	—	$	—	$	(3,765	)	$	(3,765	)

Financial assets and liabilities carried at fair value at December 31, 2019 are classified in the categories described in the table below:

	Level 1		Level 2			Level 3		Total
Assets
Cash equivalents
Money market funds		36,374		—			—		36,374
Time deposits		153,838		—			—		153,838
Derivatives
Foreign currency forwards		—		454			—		454
Total assets at fair value	$	190,212	$	454		$	—	$	190,666
Liabilities
Derivatives
Foreign currency forwards		—		(1,271	)		—		(1,271	)
Total liabilities at fair value	$	—	$	(1,271	)	$	—	$	(1,271	)

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Earnings per share (Tables)

12 Months Ended

Dec. 31, 2020

Earnings Per Share [Abstract]

Basic and Diluted Earnings Per Share

The following table presents our basic and diluted earnings per share for the years ended December 31, 2020 and 2019:

	Year ended December 31,
	2020			2019
Basic and diluted earnings per share
Net loss for the year		(142,869	)		(20,910	)
Less: Net loss for the year attributable to redeemable non-controlling interest		282			—
Net loss for the year attributable to Despegar.com, Corp.		(142,587	)		(20,910	)
Accretion of redeemable non-controlling interest to redemption value		(78	)		—
Accretion of redeemable Series A preferred stock to redemption value		(2,831	)		—
Accrued dividends of redeemable Series A preferred stock		(4,212	)		—
Dividends of redeemable Series B preferred stock		(553	)		—
Net loss for the year attributable to Despegar.com, Corp. common shareholders		(150,261	)		(20,910	)
Numerator of basic and diluted earnings per share		(150,261	)		(20,910	)
Weighted average common shares outstanding—basic and diluted		73,001			69,465
Denominator of basic and diluted earnings per share		73,001			69,465
Basic and diluted earnings per share		(2.06	)		(0.30	)

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Shareholders' equity and mezzanine equity (Tables)

12 Months Ended

Dec. 31, 2020

Equity [Abstract]

Summary of Shares Repurchased under the Authorized Program

Shares repurchased under the authorized programs were as follows:

	Year ended December 31,
	2020		2019		2018
Number of shares repurchased		—		3,463,832		1,544,475
Average price per share		—		12.17		16.84
Total cost of repurchases (1)		—		42,167		25,999

(1) Amount excludes transaction costs.

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Financial income / (expense), net (Tables)

12 Months Ended

Dec. 31, 2020

Interest Income (Expense), Net [Abstract]

Summary of Components of Financial Income Expense Net

The following table presents the components of financial income / (expense), net:

	Year ended December 31,
	2020			2019			2018
Foreign exchange gains / (losses)		11,131			(6,982	)		(10,511	)
Gains / (losses) on derivative financial instruments		10,648			3,648			45
Interest income		3,857			7,944			7,415
Interest expense		(5,471	)		(5,767	)		(4,370	)
Factoring expense		(2,194	)		(15,379	)		(12,368	)
Bank expenses		(1,371	)		(481	)		(434	)
Others		(3,690	)		(198	)		1,056
Total financial income / (expense), net	$	12,910		$	(17,215	)	$	(19,167	)

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Stock-based compensation (Tables)

12 Months Ended

Dec. 31, 2020

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Share Based Compensation Restricted Stock Units Award Activity

The following table presents a summary of our RSU activity:

	RSUs			Weighted average grant-date fair value
Balance as of January 1, 2018		90,626		$	7.47
Granted		1,394,159		$	12.48
Vested (1)		(164,814	)	$	10.88
Balance as of December 31, 2018		1,319,971		$	12.33
Granted		340,565		$	11.49
Vested		(362,577	)	$	12.23
Cancelled		(148,215	)	$	12.64
Balance as of December 31, 2019		1,149,744		$	12.08
Granted		1,409,680		$	7.89
Vested		(419,367	)	$	10.95
Cancelled		(460,851	)	$	10.32
Balance as of December 31, 2020		1,679,206		$	9.33

(1) 90,626 vested RSU pertained to the former 2015 Stock Incentive Plan. There is no more activity under this plan.

Summary of Weighted Average Assumptions of Black-Scholes and Monte Carlo Option-Pricing Models

We did not grant options during the year ended December 31, 2020. The fair value of stock options granted during the years ended December 31, 2019 and 2018 were estimated at the date of grant using appropriate valuation techniques, including the Black-Scholes and Monte Carlo option-pricing models, assuming the following weighted average assumptions:

	2020		2019			2018
Risk-free interest rate		—		1.95	%		2.48	%
Expected volatility		—		39.21	%		41.52	%
Expected life (in years)		—		10			10
Weighted-average estimated fair value of options granted during the year		—		2.91			13.47

Summary of Stock Option Activity

The following table presents a summary of our stock option activity:

	Options			Weighted average exercise price		Remaining contractual life (in years)		Aggregate intrinsic value
Balance as of January 1, 2018		3,496,058		$	26.02		—		—
Granted		1,174,489		$	23.50		—		—
Exercised		(4,973	)	$	12.00		—		—
Forfeited / Cancelled		(1,873,213	)	$	26.43		—		—
Balance as of December 31, 2018		2,792,361		$	17.50		—		—
Granted		225,903		$	17.50		—		—
Exercised		(44,096	)	$	12.00		—		—
Forfeited / Cancelled		(436,280	)	$	17.50		—		—
Balance as of December 31, 2019		2,537,888		$	17.50		—		—
Exercised		(33,133	)	$	11.31		—		—
Forfeited / Cancelled		(1,685,242	)	$	17.05		—		—
Balance as of December 31, 2020		819,513		$	9.11		2	$	10.50
Exercisable as of December 31, 2020		423,644		$	6.03		2	$	5.43
Vested and expected to vest after December 31, 2020		819,513		$	12.41		2	$	5.07

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Leases (Tables)

12 Months Ended

Dec. 31, 2020

Leases [Abstract]

Schedule of cash flow information related to leases

Supplemental cash flow information related to leases were as follows:

	Year ended December 31, 2020		Year ended December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating lease payments	$	10,348	$	6,748

Schedule of lessee, operating lease, liability, maturity

As of December 31, 2020, the operating lease liabilities will mature over the following periods:

	As of December 31, 2020
2021		8,650
2022		6,026
2023		4,930
2024		4,276
2025		4,331
2026 and thereafter		18,331
Total remaining lease payments	$	46,544
Less imputed interest		(9,259	)
Total operating lease liabilities:	$	37,285
Current operating lease liability		8,591
Non-current operating lease liability	$	28,694

Schedule of balance sheet information related to lease agreements

Supplemental consolidated balance sheet information related to these lease agreements were as follows:

	As of December 31, 2020
Operating lease right-of-use assets	$	692
Current lease liabilities		378
Non-current lease liabilities		341
Total operating lease liabilities	$	719

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Valuation and Qualifying Accounts (Tables)

12 Months Ended

Dec. 31, 2020

SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract]

Schedule of Changes in Valuation and Qualifying Accounts

The following table presents the changes in our valuation and qualifying accounts:

	Balance, beginning of year		Charges to earnings		Charges to other accounts			Deductions			Balance, end of year
2018
Allowance for credit expected losses		3,164		1,062		(1,098	)		(1,063	)		2,065
2019
Allowance for credit expected losses		2,065		4,294		(104	)		(3,050	)		3,205
2020
Allowance for credit expected losses		3,205		12,270		2,689			(7,369	)		10,795

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Business - Additional Information (Detail)	12 Months Ended
	Dec. 31, 2020	Oct. 01, 2020
Viajes Beda S.A. de C.V. [Member]
Business [Line Items]
Equity method investment, ownership percentage		100.00%
Transporturist, S.A. de C.V. [member]
Business [Line Items]
Equity method investment, ownership percentage		100.00%
Covid -19 [Member]
Business [Line Items]
Percentage of decrease in revenue	75.00%

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Basis of Consolidation - Summary of Company's Main Operating Subsidiaries (Detail)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Agencia de Viajes y Turismo Falabella S.A.S. [member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Operating
Country of Incorporation	Colombia
Noncontrolling Interest Ownership Percentage		100.00%
Badurey S A [member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Holding
Country of Incorporation	Uruguay
Noncontrolling Interest Ownership Percentage	100.00%	100.00%
BD Travelsolution, S. de R.L. de C.V. [member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Operating
Country of Incorporation	Mexico
Noncontrolling Interest Ownership Percentage	100.00%
BDTP Venture, Inc. [member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Operating
Country of Incorporation	United States
Noncontrolling Interest Ownership Percentage	100.00%
Beda Transportation, Inc.[member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Operating
Country of Incorporation	United States
Noncontrolling Interest Ownership Percentage	100.00%
Beda Travel & Tours, Inc. [member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Operating
Country of Incorporation	United States
Noncontrolling Interest Ownership Percentage	100.00%
Beda Travel, Inc. [member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Holding
Country of Incorporation	United States
Noncontrolling Interest Ownership Percentage	100.00%
Click Hoteles.com, LLC [member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Holding
Country of Incorporation	United States
Noncontrolling Interest Ownership Percentage	100.00%
Decolar.com Ltda. [member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Operating
Country of Incorporation	Brazil
Noncontrolling Interest Ownership Percentage	100.00%	100.00%
Decolar.com, Inc.[member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Holding
Country of Incorporation	United States
Noncontrolling Interest Ownership Percentage	100.00%	100.00%
Desonproc S.L. [member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Operating
Country of Incorporation	Spain
Noncontrolling Interest Ownership Percentage		100.00%
Despegar Colombia S.A.S. [member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Operating
Country of Incorporation	Colombia
Noncontrolling Interest Ownership Percentage	100.00%	100.00%
DespegarEcuador S.A. [member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Operating
Country of Incorporation	Ecuador
Noncontrolling Interest Ownership Percentage	100.00%	100.00%
Despegar Servicios, S.A. de C.V. [member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Operating
Country of Incorporation	Mexico
Noncontrolling Interest Ownership Percentage	100.00%	100.00%
Despegar.com Chile SpA [member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Operating
Country of Incorporation	Chile
Noncontrolling Interest Ownership Percentage	100.00%	100.00%
Despegar.com Mexico S.A. de C.V. [member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Operating
Country of Incorporation	Mexico
Noncontrolling Interest Ownership Percentage	100.00%	100.00%
Despegar.com Panama S.A.[member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Operating
Country of Incorporation	Panama
Noncontrolling Interest Ownership Percentage		100.00%
Despegar.com Peru S.A.C. [member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Operating
Country of Incorporation	Peru
Noncontrolling Interest Ownership Percentage	100.00%	100.00%
Despegar.com USA, Inc. [member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Operating
Country of Incorporation	United States
Noncontrolling Interest Ownership Percentage	100.00%	100.00%
Despegar.com.ar S.A. [member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Operating
Country of Incorporation	Argentina
Noncontrolling Interest Ownership Percentage	100.00%	100.00%
DFinance Holding Ltda. [member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Holding
Country of Incorporation	Brazil
Noncontrolling Interest Ownership Percentage	100.00%	0.00%
Holidays S.A. [member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Operating
Country of Incorporation	Uruguay
Noncontrolling Interest Ownership Percentage	100.00%	100.00%
Jamiray International S.A. [member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Operating
Country of Incorporation	Uruguay
Noncontrolling Interest Ownership Percentage	100.00%
Koin Administradora de Cartões e Meios de Pagamento S.A. [member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Operating
Country of Incorporation	Brazil
Noncontrolling Interest Ownership Percentage	84.00%
Rivamor S.A. [member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Holding
Country of Incorporation	Uruguay
Noncontrolling Interest Ownership Percentage	100.00%	100.00%
Satylca S.C.A. [member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Holding
Country of Incorporation	Uruguay
Noncontrolling Interest Ownership Percentage	100.00%	100.00%
Servicios Online 3351 de Venezuela C.A. [member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Operating
Country of Incorporation	Venezuela
Noncontrolling Interest Ownership Percentage	100.00%	100.00%
Servicios Online S.A.S. [member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Operating
Country of Incorporation	Colombia
Noncontrolling Interest Ownership Percentage		100.00%
South Net Chile, LTDA [member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Operating
Country of Incorporation	Chile
Noncontrolling Interest Ownership Percentage	100.00%
South Net Travel, Inc. [member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Operating
Country of Incorporation	United States
Noncontrolling Interest Ownership Percentage	100.00%
South Net Turismo Colombia, S.A. [member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Operating
Country of Incorporation	Colombia
Noncontrolling Interest Ownership Percentage		100.00%
South Net Turismo Perú S.R.L. [member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Operating
Country of Incorporation	Peru
Noncontrolling Interest Ownership Percentage		100.00%
South-Net Turismo Brasil, LTDA [member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Operating
Country of Incorporation	Brazil
Noncontrolling Interest Ownership Percentage	100.00%
South-Net Turismo S.A.[member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Operating
Country of Incorporation	Argentina
Noncontrolling Interest Ownership Percentage	100.00%
Tecnobelt S.A. [member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Operating
Country of Incorporation	Uruguay
Noncontrolling Interest Ownership Percentage	100.00%	100.00%
Transporturist, S.A. de C.V. [member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Operating
Country of Incorporation	Mexico
Noncontrolling Interest Ownership Percentage	100.00%
Travel Reservations S.R.L. [member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Operating
Country of Incorporation	Uruguay
Noncontrolling Interest Ownership Percentage	100.00%	100.00%
Viaceco Travel, S.A. de C.V. [member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Operating
Country of Incorporation	Mexico
Noncontrolling Interest Ownership Percentage	100.00%
Viajes Beda, S.A. de C.V. [member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Operating
Country of Incorporation	Mexico
Noncontrolling Interest Ownership Percentage	100.00%
Viajes Despegar.com O.N.L.I.N.E. S.A. [member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Operating
Country of Incorporation	Costa Rica
Noncontrolling Interest Ownership Percentage	100.00%	100.00%
Viajes Falabella S.A. [member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Operating
Country of Incorporation	Argentina
Noncontrolling Interest Ownership Percentage		100.00%
Viajes Falabella S.A.C. [member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Operating
Country of Incorporation	Peru
Noncontrolling Interest Ownership Percentage		100.00%
Viajes Falabella SpA [member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Type	Operating
Country of Incorporation	Chile
Noncontrolling Interest Ownership Percentage		100.00%

XML

Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Significant Accounting Policies [Line Items]
Advertising expense	$ 27,661	$ 147,693	$ 151,372
Increase decrease in the allowances for doubtful accounts receivable	$ 12,270	$ 4,294	$ 1,062
Advertising Revenue [member]
Significant Accounting Policies [Line Items]
Customer concentration risk	4.00%	3.00%	3.00%
Commissions and Service Fees [member]
Significant Accounting Policies [Line Items]
Customer concentration risk	77.00%	81.00%	81.00%
Destination Services [member]
Significant Accounting Policies [Line Items]
Customer concentration risk	2.00%
Other Revenues [member]
Significant Accounting Policies [Line Items]
Customer concentration risk	6.00%	2.00%	1.00%
Commissions and Service Fees Incentive Fees and Advertising [member]
Significant Accounting Policies [Line Items]
Customer concentration risk	90.00%
Travel Service Suppliers [Member]
Significant Accounting Policies [Line Items]
Customer concentration risk	13.00%	14.00%	15.00%
Covid -19 [Member]
Significant Accounting Policies [Line Items]
Increase decrease in the allowances for doubtful accounts receivable	$ 7,199
Minimum [member]
Significant Accounting Policies [Line Items]
Amortization period	3 years
Intangible assets useful life	3 years
Minimum [member] | Restricted Stock Units (RSUs) [member]
Significant Accounting Policies [Line Items]
Share-based compensation arrangement by Share based payment award vesting period	3 years
Share based compensation arrangement by share-based payment award vesting rights	25.00%
Maximum [member]
Significant Accounting Policies [Line Items]
Amortization period	10 years
Intangible assets useful life	10 years
Maximum [member] | Restricted Stock Units (RSUs) [member]
Significant Accounting Policies [Line Items]
Share-based compensation arrangement by Share based payment award vesting period	4 years
Share based compensation arrangement by share-based payment award vesting rights	33.00%
Buildings [member]
Significant Accounting Policies [Line Items]
Intangible assets useful life	50 years
Merchant Model [member] | Customer Concentration Risk [member] | Sales Revenue [member]
Significant Accounting Policies [Line Items]
Customer concentration risk	75.00%
Agency Model [member] | Customer Concentration Risk [member] | Sales Revenue [member]
Significant Accounting Policies [Line Items]
Customer concentration risk	5.00%

XML

Summary of Significant Accounting Policies - Summary Estimated Useful Lives of Property and Equipment (Detail)	12 Months Ended
	Dec. 31, 2020
Computer Hardware [member]
Property, Plant and Equipment [Line Items]
Estimated useful life	3 years
Vans [member]
Property, Plant and Equipment [Line Items]
Estimated useful life	4 years
Office Furniture and Fixture [member]
Property, Plant and Equipment [Line Items]
Estimated useful life	10 years
Buildings [member]
Property, Plant and Equipment [Line Items]
Estimated useful life	50 years

XML

Acquisitions - Preliminary purchase price allocation (Details) - USD ($) $ in Thousands			12 Months Ended
	Oct. 01, 2020	Jun. 07, 2019	Dec. 31, 2020	Aug. 20, 2020	Dec. 31, 2019	Dec. 31, 2018
Recognized amounts of assets acquired and liabilities assumed:
Goodwill			$ 123,217		$ 46,956	$ 36,207
Koin Administradora De Cartoes E Meios De Pagamentos SA [Member]
Consideration:
Fair value of purchase price			977
Redeemable non-controlling interest:			2,655	$ 2,655
Recognized amounts of assets acquired and liabilities assumed:
Cash and cash equivalents			322
Restricted cash			4
Trade accounts receivable, net of credit expected loss			1,194	$ 977
Lease right-of-use assets			177
Property and equipment, net			99
Intangible assets, net			743
Other assets and prepaid expenses			66
Total Assets Acquired			2,605
Accounts payable and accrued expenses			1,721
Short-term debt			1,250
Lease liabilities			178
Contingent liabilities			19
Taxes payable			684
Deferred tax liabilities			253
Other liabilities			479
Total Liabilities Assumed			4,584
Total net liabilities assumed			1,979
Goodwill			5,611
Best Day Group [Member]
Consideration:
Fair value of purchase price payable on October 1, 2023			8,642
Fair value of contingent consideration payable on October 1, 2024			1,526
Total consideration as of acquisition date	$ 10,288		10,168
Recognized amounts of assets acquired and liabilities assumed:
Cash and cash equivalents			5,404
Restricted cash			2,763
Trade accounts receivable, net of credit expected loss			9,122
Related party receivable			2,337
Lease right-of-use assets			7,415
Property and equipment, net			8,836
Intangible assets, net			51,758
Deferred tax assets			12,851
Seller indemnification			11,814
Other assets and prepaid expenses			33,446
Total Assets Acquired			145,746
Accounts payable and accrued expenses			7,948
Travel accounts payable			82,170
Related party payable			266
Short-term and long-term debt			10,618
Lease liabilities			7,955
Contingent liabilities			22,436
Deferred revenue			775
Taxes payable			29,573
Deferred tax liabilities			11,015
Promissory notes issued			13,928
Other liabilities			16,534
Total Liabilities Assumed			203,218
Total net liabilities assumed			57,472
Goodwill			$ 67,640
Viajes Falabella [Member]
Consideration:
Total consideration as of acquisition date		$ 23,000
Fair value of purchase price					22,196
Recognized amounts of assets acquired and liabilities assumed:
Cash and cash equivalents					11,272
Trade accounts receivable, net of credit expected loss					11,828
Property and equipment, net					2,420
Intangible assets, net					3,663
Other assets and prepaid expenses					34,611
Total Assets Acquired					63,794
Travel accounts payable					36,656
Other liabilities					15,807
Total Liabilities Assumed					52,463
Total net liabilities assumed					11,331
Goodwill					$ 10,865

XML

Acquisitions - Preliminary purchase price allocation (Parenthetical) (Details) - Best Day Group [Member] $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($) Promissorynotes
Business Acquisition [Line Items]
Date of purchase price payable	Oct. 01, 2023
Date of contingent Consideration payable	Oct. 01, 2024
Business Combination ,Contingencies related to Non income tax	$ 17,933
Business Combination ,Contingencies realted to social security and other matters	4,503
Business Combination,uncertain tax positions assumed	28,955
Promissory Notes [Member]
Business Acquisition [Line Items]
Debt instrument Nominal amount	14,323
Debt instrument fair value	$ 13,928
Debt Instrument, Interest Rate	5.00%
Debt Instrument, Maturity Date	Oct. 01, 2023
Number of debt instrument issued | Promissorynotes	4

XML

Acquisitions - Summary of Intangible assets acquired (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired	$ 52,501	$ 3,663
Best Day Group [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired	51,758
Best Day Group [Member] | Trademarks [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired	$ 13,299
Estimated useful life (years)	20 years
Best Day Group [Member] | Domains [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired	$ 204
Estimated useful life (years)	20 years
Best Day Group [Member] | Developed Technology [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired	$ 8,206
Estimated useful life (years)	2 years 6 months
Best Day Group [Member] | Licenses [member]
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired	$ 634
Estimated useful life (years)	1 year 3 months 18 days
Best Day Group [Member] | Customer relationships [member]
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired	$ 29,415
Estimated useful life (years)	7 years

XML

Acquisitions - Summary of the revenue and net loss (Detail) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Best Day Group [Member]
Business Acquisition [Line Items]
Revenue	$ 14,125
Net loss	$ (14,983)
Revenue		$ 165,122	$ 658,147
Net loss		$ (242,261)	(38,241)
Viajes Falabella [Member]
Business Acquisition [Line Items]
Revenue			20,710
Net loss			(3,060)
Revenue			532,710	$ 584,986
Net loss			$ (20,872)	$ 19,770

XML

Acquisitions - Additional Information (Details) - USD ($) $ in Thousands			1 Months Ended		3 Months Ended	6 Months Ended	12 Months Ended
	Oct. 01, 2020	Jun. 07, 2019	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020	Sep. 30, 2024	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Aug. 20, 2020
Best Day Group [Member]
Business Acquisition [Line Items]
Consideration transferred	$ 10,288						$ 10,168
Business Acquisition Effective Date Of Cash Payment	Oct. 01, 2023
Business Acquisition Effective Date Of Earn out Payable	Oct. 01, 2024
Contigent consideration	$ 10,288
Incremental depreciation and amortization expense							5,034	$ 6,712
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables					$ 9,122		9,122
Net revenue					14,125
Business acquisitions, revenue							165,122	658,147
Net loss					(14,983)
Koin Administradora De Cartoes E Meios De Pagamentos SA [Member]
Business Acquisition [Line Items]
Business combination percentage of voting rights acquired										84.00%
Business acquisition redeemable non controlling interest percentage retained										16.00%
Equity Method Investment, Ownership Percentage										16.00%
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables					1,194		1,194			$ 977
Business Combination Non Controlling Interest Agreed Consideration					4,320		4,320
Business Combination Noncontrolling Interest Fixed Consideration At Their Option					2,880		2,880
Redeemable non-controlling interest:					$ 2,655		2,655			$ 2,655
Net revenue							138
Net loss							$ 1,786
Viajes Falabella [Member]
Business Acquisition [Line Items]
Consideration transferred		$ 23,000
Acquisition related costs								464
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables								11,828
Net revenue								$ 20,710
Consideration paid		$ 11,500	$ 5,750	$ 5,750
Commercial Agreement Term								10 years
Business acquisitions, revenue								$ 532,710	$ 584,986
Net loss								(3,060)
Viajes Falabella [Member] | Pro Forma [Member]
Business Acquisition [Line Items]
Business acquisitions, revenue								757	$ 757
Maximum [Member]
Business Acquisition [Line Items]
Intangible assets useful life							10 years
Maximum [Member] | Best Day Group [Member]
Business Acquisition [Line Items]
Earn out payable						$ 20,000
Minimum [Member]
Business Acquisition [Line Items]
Intangible assets useful life							3 years
Minimum [Member] | Best Day Group [Member]
Business Acquisition [Line Items]
Earn out payable						$ 0
Viajes Beda S A de C V [Member]
Business Acquisition [Line Items]
Business acquisition redeemable non controlling interest percentage retained	100.00%
Equity Method Investment, Ownership Percentage	100.00%
Transporturist S A de C V [Member]
Business Acquisition [Line Items]
Business acquisition redeemable non controlling interest percentage retained	100.00%
Equity Method Investment, Ownership Percentage	100.00%
Koin Administradora De Cartoes E Meios De Pagamentos SA [Member]
Business Acquisition [Line Items]
Business combination percentage of voting rights acquired										84.00%
General and Administrative Expense [Member] | Best Day Group [Member]
Business Acquisition [Line Items]
Acquisition related costs							$ 2,856	$ 617
General and Administrative Expense [Member] | Koin Administradora De Cartoes E Meios De Pagamentos SA [Member]
Business Acquisition [Line Items]
Business combination acquistion related costs recognised in the income statement							$ 279
Developed Technology Rights [Member] | Best Day Group [Member]
Business Acquisition [Line Items]
Intangible assets amortization period							2 years 6 months
Developed Technology Rights [Member] | Koin Administradora De Cartoes E Meios De Pagamentos SA [Member]
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles										$ 150
Trademarks [Member] | Best Day Group [Member]
Business Acquisition [Line Items]
Intangible assets amortization period							20 years
Trademarks [Member] | Koin Administradora De Cartoes E Meios De Pagamentos SA [Member]
Business Acquisition [Line Items]
Redeemable non-controlling interest:										$ 593
Trade Names [Member] | Viajes Falabella [Member]
Business Acquisition [Line Items]
Intangible assets useful life								4 years
Customer Relationships [Member] | Best Day Group [Member]
Business Acquisition [Line Items]
Intangible assets amortization period							7 years
Customer Relationships [Member] | Viajes Falabella [Member]
Business Acquisition [Line Items]
Intangible assets amortization period								3 years 8 months 12 days

XML

Redeemable non-controlling interest (Detail) $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($)
Temporary Equity Disclosure [Abstract]
Balance, beginning of period
Initial fair value of redeemable non-controlling interest of acquired businesses	2,655
Comprehensive loss adjustments:
Net loss attributable to redeemable non-controlling interest	(282)
Other comprehensive loss attributable to redeemable non-controlling interest	170
Additional paid-in-capital adjustments:
Adjustment to redemption value	78
Balance, end of period	$ 2,621

XML

Redeemable non-controlling interest - Additional Information (Details) - USD ($) $ in Thousands		12 Months Ended
	Aug. 20, 2020	Dec. 31, 2020
Redeemable Noncontrolling Interest [Line Items]
Business combination acquisition of redeemable non controlling interest		$ 2,655
Temporary equity accretion to redemption value		78
Koin Administradora De Cartoes E Meios De Pagamentos SA [Member]
Redeemable Noncontrolling Interest [Line Items]
Business combination percentage of voting rights acquired	84.00%
Business combination acquisition of redeemable non controlling interest	$ 2,655
Business acquisition redeemable non controlling interest percentage retained	16.00%
Temporary equity accretion to redemption value		$ 78
Koin Administradora De Cartoes E Meios De Pagamentos SA [Member] | Put Option [Member]
Redeemable Noncontrolling Interest [Line Items]
Business combination consideration payable to redeemable non controlling interest	$ 2,880

XML

Debt - Summary of outstanding short-term and long-term debt (Detail) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Long-term Debt	$ 10,367
Less current maturities of long-term debt	196
Short-term debt, including current maturities of long-term debt	8,949	$ 19,209
Total short-term and long-term debt	19,316	$ 19,209	$ 31,162
HSBC Mexico, S.A [Member]
Debt Instrument [Line Items]
Long-term Debt	5,026
Bank Sabadell I [Member]
Debt Instrument [Line Items]
Long-term Debt	3,833
Bank Sabadell II [Member]
Debt Instrument [Line Items]
Long-term Debt	1,005
Book value [Member]
Debt Instrument [Line Items]
Long-term Debt	10,563
Long-term debt, excluding current maturities	10,367
Total short-term and long-term debt	19,316
Book value [Member] | Banco de Crédito e Inversiones [Member]
Debt Instrument [Line Items]
Long-term Debt	699
Fair value [Member]
Debt Instrument [Line Items]
Long-term Debt	10,558
Long-term debt, excluding current maturities	10,362
Total short-term and long-term debt	19,311
Fair value [Member] | Banco de Crédito e Inversiones [Member]
Debt Instrument [Line Items]
Long-term Debt	$ 694

XML

Debt - Summary of outstanding short-term and long-term debt (Parenthetical) (Detail) - Dec. 31, 2020 $ in Thousands	USD ($)	MXN ($)	CLP ($)
HSBC Mexico, S.A [Member]
Debt Instrument [Line Items]
Debt instrument face amount	$ 5,100	$ 100,000,000
Bank Sabadell I [Member]
Debt Instrument [Line Items]
Debt instrument face amount	4,433	83,831,941
Bank Sabadell II [Member]
Debt Instrument [Line Items]
Debt instrument face amount	1,058	$ 20,000,000
Banco de Crédito e Inversiones [Member]
Debt Instrument [Line Items]
Debt instrument face amount	$ 640		$ 500,000,000

XML

Debt - Summary of changes in debt (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
Balance, beginning of year	$ 19,209	$ 31,162
Acquisitions	9,335
Borrowings obtained	640
Payment of borrowings	375
Accrued interest	196
Interest paid	(195)
Foreign currency translation adjustment	962
Short-term loans, net	(10,456)	(11,953)
Balance, end of year	$ 19,316	$ 19,209

XML

Debt - Summary of long-term debt instruments (Detail) - 12 months ended Dec. 31, 2020 $ in Thousands	USD ($)	MXN ($)	CLP ($)
HSBC Mexico, S.A [Member]
Debt Instrument [Line Items]
Issuance date	February 2020
Maturity date	March 2023
Currency	Mexican Pesos
Principal amount in original currency	$ 5,100	$ 100,000,000
Debt instrument description	TIIE(1)+3.25%
Debt Instrument, variable Interest Rate	3.25%
Interest payment	Monthly
Bank Sabadell I [Member]
Debt Instrument [Line Items]
Issuance date	January 2020
Maturity date	March 2023
Currency	Mexican Pesos
Principal amount in original currency	$ 4,433	83,831,941
Debt instrument description	TIIE(1)+2.5%
Debt Instrument, variable Interest Rate	2.50%
Interest payment	Monthly
Bank Sabadell II [Member]
Debt Instrument [Line Items]
Issuance date	January 2020
Maturity date	January 2022
Currency	Mexican Pesos
Principal amount in original currency	$ 1,058	$ 20,000,000
Debt instrument description	TIIE(1)+3.2%
Debt Instrument, variable Interest Rate	3.20%
Interest payment	Monthly
Banco de Crédito e Inversiones [Member]
Debt Instrument [Line Items]
Issuance date	June 2020
Maturity date	May 2024
Currency	Chilean Pesos
Principal amount in original currency	$ 640		$ 500,000,000
Debt Instrument, variable Interest Rate	3.50%
Interest payment	Monthly

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Debt - Summary of long-term debt instruments (Parenthetical) (Detail)	Dec. 31, 2020
HSBC Mexico, S.A [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate	7.50%
Bank Sabadell I [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate	6.75%
Bank Sabadell II [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate	7.45%

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Debt - Additional Information (Detail)	Dec. 31, 2020	Dec. 31, 2019
Debt Disclosure [Abstract]
Short-term Debt, Weighted Average Interest Rate	3.40%	4.30%

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Preferred Stock and warrants - Additional Information (Detail)			1 Months Ended	12 Months Ended
	Sep. 21, 2020 USD ($) shares	Sep. 18, 2020 USD ($) $ / shares shares	Sep. 30, 2020 USD ($)	Dec. 31, 2020 USD ($) $ / shares shares
Redeemable Preferred Stock And Warrants [Line Items]
Debt amount that can be incurred in terms of number of times the product of earnings before interest tax depreciation and amortisation				0.010
Adjustments to additional paid in capital warrant issue of warrants				$ 56,339,000
Temporary equity period during which the value is accreted to its redemption worth				5 years
Adjustments to additional paid in capital accretion to temporary equity				$ (78,000)
Adjustments to additional paid in capital accretion of dividends on temporary equity				$ (4,212,000)
Number of shares of common stock issuable for each share of temporary equity converted				108.1081
Dividend paid [Member]
Redeemable Preferred Stock And Warrants [Line Items]
Dividends				$ 553,000
Catterton investment agreement [Member] | LLCA Daylight LP [Member]
Redeemable Preferred Stock And Warrants [Line Items]
Class of warrants or rights excercise price of warrant per share | $ / shares				$ 0.01
Class of warrants or rights expiry date				Sep. 18, 2030
Penny warrants [Member]
Redeemable Preferred Stock And Warrants [Line Items]
Payment of stock issuance costs				$ 3,604,000
Adjustments to additional paid in capital warrant issue of warrants				$ 56,339,000
Penny warrants [Member] | Catterton investment agreement [Member] | LLCA Daylight LP [Member]
Redeemable Preferred Stock And Warrants [Line Items]
Class or warrants or rights number of warrants issued during the period warrants | shares		11,000,000
Class of warrants or rights number of securities called by the warrants or rights | shares				11,000,000
Class of warrants or rights outstanding term				10 years
Series A redeemable non convertible preferred stock [Member]
Redeemable Preferred Stock And Warrants [Line Items]
Payment of stock issuance costs				$ 5,415,000
Temporary equity dividend rate			10.00%
Temporary equity frequency of payment of compound interest on accumulated dividends			semi-annually
Temporary equity liquidation preference per share | $ / shares				$ 1,000
Redeemable equity preferred amount at fair value				$ 84,643,000
Temporary equity liquidation preference				150,000,000
Adjustments to additional paid in capital accretion to temporary equity				2,831,000
Temporary equity redemption value				91,686,000
Adjustments to additional paid in capital accretion of dividends on temporary equity				4,212,000
Redeemable non controlling interest equity preferred carrying amount				$ 91,686,000
Series A redeemable non convertible preferred stock [Member] | After 3 years but not later than 4 years from the issue closing date [Member]
Redeemable Preferred Stock And Warrants [Line Items]
Temporary equity redemption price as a percentage of liquidation preference per share				105.00%
Series A redeemable non convertible preferred stock [Member] | After 4 years but not later than 5 years from the issue closing date [Member]
Redeemable Preferred Stock And Warrants [Line Items]
Temporary equity redemption price as a percentage of liquidation preference per share				102.50%
Series A redeemable non convertible preferred stock [Member] | Later than years from the issue closing date [Member]
Redeemable Preferred Stock And Warrants [Line Items]
Temporary equity redemption price as a percentage of liquidation preference per share				110.00%
Series A redeemable non convertible preferred stock [Member] | On dividends declared and unpaid [Member]
Redeemable Preferred Stock And Warrants [Line Items]
Temporary equity compound interest payable on accumulated dividends				10.00%
Series A redeemable non convertible preferred stock [Member] | On dividends not delcated [Member]
Redeemable Preferred Stock And Warrants [Line Items]
Temporary equity compound interest payable on accumulated dividends				10.00%
Series A redeemable non convertible preferred stock [Member] | Catterton investment agreement [Member] | LLCA Daylight LP [Member]
Redeemable Preferred Stock And Warrants [Line Items]
Temporary equity shares issued during the period shares | shares		150,000
Temporary equity share no par value | $ / shares				$ 0
Maximum amount that Can be incurred by way of Debt				$ 60,000,000
Percentage of the total fair value of assets that can be transferred without the consent of the investors of temporary equity				10.00%
Series A redeemable non convertible preferred stock [Member] | Catterton investment agreement [Member] | LLCA Daylight LP [Member] | Change of control in the company [Member]
Redeemable Preferred Stock And Warrants [Line Items]
Temporary equity redemption price as a percentage of liquidation preference per share				110.00%
Series A redeemable non convertible preferred stock [Member] | Catterton investment agreement [Member] | LLCA Daylight LP [Member] | Minimum [member] | Investor nominate directors to continue [Member]
Redeemable Preferred Stock And Warrants [Line Items]
Temporary equity percentage of the total shares acquired by the investors held by them				50.00%
Series A redeemable non convertible preferred stock and penny warrants [Member] | Catterton investment agreement [Member] | LLCA Daylight LP [Member]
Redeemable Preferred Stock And Warrants [Line Items]
Temporary equity stock shares issued during the period and warrants or rights issued during the period value		$ 150,000
Payment of stock issuance costs		$ 2,250,000
Series B redeemable convertible preferred stock [Member]
Redeemable Preferred Stock And Warrants [Line Items]
Proceeds from the investment			$ 50,000,000
Temporary equity issuance costs			$ 3,300,000
Redeemable non controlling interest equity preferred carrying amount				$ 46,700,000
Temporary equity undeclared dividends				$ 0
Series B redeemable convertible preferred stock [Member] | Waha investment agreement [Member] | Waha Latam Investments Limited [Member]
Redeemable Preferred Stock And Warrants [Line Items]
Temporary equity shares issued during the period shares | shares	50,000
Temporary equity share no par value | $ / shares				$ 0
Payment of stock issuance costs				$ 1,000,000
Temporary equity dividend rate			4.00%
Temporary equity terms of payment of dividend			payable quarterly in arrears
Temporary equity shares issued during the period value	$ 50,000
Temporary equity converison price per share | $ / shares				$ 9.251
Series B redeemable convertible preferred stock [Member] | Waha investment agreement [Member] | Waha Latam Investments Limited [Member] | More than 3 years and Within 5 years from the closure of issue of temporary equity [Member]
Redeemable Preferred Stock And Warrants [Line Items]
Voume weighted average price per share | $ / shares		$ 13.88
Volume weighted average price per share as a percentage of initial conversion price			(150.00%)
Percentage of conversion amount of redeemable preferred shares for conversion base			105.00%
Series B redeemable convertible preferred stock [Member] | Waha investment agreement [Member] | Waha Latam Investments Limited [Member] | More than 5 years and Within 7 years from the closure of issue of temporary equity [Member]
Redeemable Preferred Stock And Warrants [Line Items]
Voume weighted average price per share | $ / shares				$ 12.49
Volume weighted average price per share as a percentage of initial conversion price				(135.00%)
Percentage of conversion amount of redeemable preferred shares for conversion base				105.00%
Series B redeemable convertible preferred stock [Member] | Waha investment agreement [Member] | Waha Latam Investments Limited [Member] | Minimum [member] | For further issuance of preference share at par with temporary equity [Member]
Redeemable Preferred Stock And Warrants [Line Items]
Temporary equity percentage of the total shares acquired by the investors held by them				50.00%
Series B redeemable convertible preferred stock [Member] | Waha investment agreement [Member] | Waha Latam Investments Limited [Member] | Minimum [member] | Investor nominate directors to continue [Member]
Redeemable Preferred Stock And Warrants [Line Items]
Temporary equity percentage of the total shares acquired by the investors held by them				50.00%
Percentage of the common stock shares to be held by the investors on converison of temporary equity				50.00%
Series B redeemable convertible preferred stock [Member] | Waha investment agreement [Member] | Waha Latam Investments Limited [Member] | 7 years or more from the closure of issue of temporary equity [Member]
Redeemable Preferred Stock And Warrants [Line Items]
Temporary equity initial stated value per share | $ / shares				$ 1,000
Series B redeemable convertible preferred stock [Member] | Waha investment agreement [Member] | Waha Latam Investments Limited [Member] | 7 years or more from the closure of issue of temporary equity [Member] | Within seven years from the issue closing date of temporary equity issue change of control occurs [Member]
Redeemable Preferred Stock And Warrants [Line Items]
Temporary equity redemption price as a percentage of liquidation preference per share				110.00%
Series B redeemable convertible preferred stock [Member] | Waha investment agreement [Member] | Waha Latam Investments Limited [Member] | 7 years or more from the closure of issue of temporary equity [Member] | After seven years from the issue closing date of temporary equity issue change of control occurs [Member]
Redeemable Preferred Stock And Warrants [Line Items]
Temporary equity redemption price as a percentage of initial value per share | $ / shares				$ 100.0
Common stock [Member] | Catterton investment agreement [Member] | LLCA Daylight LP [Member] | Minimum [member] | Investor nominate directors to continue [Member]
Redeemable Preferred Stock And Warrants [Line Items]
Common stock holding as percentage of common stock shares underlying warrants acquired by the investors				50.00%

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Cash and cash equivalents and restricted cash - Schedule of Cash and Cash Equivalents (Detail) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Cash and Cash Equivalents [Abstract]
Cash on hand	$ 121	$ 42
Bank deposits	201,217	118,933
Time deposits	45,031	153,838
Money market funds	88,061	36,374
Cash and cash equivalents	$ 334,430	$ 309,187	$ 346,480

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Cash and cash equivalents and restricted cash - Additional Information (Detail) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Cash Cash Equivalents Restricted Cash And Cash Equivalents [Line Items]
Restricted cash	$ 16,055	$ 4,457	$ 5,709

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Cash and cash equivalents and restricted cash - Summary of cash and cash equivalents and restricted cash (Detail) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Restricted Cash [Abstract]
Cash and cash equivalents	$ 334,430	$ 309,187	$ 346,480
Restricted cash	16,055	4,457	5,709
Total cash and cash equivalents and restricted cash as shown in our consolidated statements of cash flows:	$ 350,485	$ 313,644	$ 352,189

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Measurement of credit losses on financial instrument - Additional Information (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Jan. 01, 2020	Dec. 31, 2019	Dec. 31, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts Receivable, Allowance for Credit Loss, Current	$ 10,795	$ 3,205	$ 3,205	$ 2,065
Incremental allowance for expected uncollectible amount	$ 7,199
Cumulative Effect, Period of Adoption, Adjustment [member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts Receivable, Allowance for Credit Loss, Current		$ 1,076

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Measurement of credit losses on financial instrument - Summary of the impact of adopting ASC 326 (Detail) - USD ($) $ in Thousands	Dec. 31, 2020	Jan. 01, 2020	Dec. 31, 2019	Dec. 31, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit expected losses	$ 10,795	$ 3,205	$ 3,205	$ 2,065
Impact of ASC 326 adoption [member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit expected losses		1,076
As reported under ASC 326 [member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit expected losses		$ 4,281

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Measurement of credit losses on financial instrument - Summary of the Activity on the Expected Credit Loss Allowance for Trade Receivables (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Allowance for Credit Loss [Abstract]
Balance, beginning of year	$ 3,205	$ 2,065
Impact of adoption of ASC 326	1,076
Provisions	12,270	4,294	$ 1,062
Write-off	(7,369)	(3,050)
Foreign currency translation adjustment	1,613	(104)
Balance, end of year	$ 10,795	$ 3,205	$ 2,065

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Other Assets and Prepaid Expenses - Summary of Other Current Assets and Prepaid Expenses (Detail) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Prepaid Expense and Other Assets, Current [Abstract]
Tax credits	$ 34,465	$ 37,067
Prepaid expenses and advance to suppliers	15,664	29,083
Prepaid advertising	175	1,483
Others	1,991	2,061
Total prepaid expense and other assets	$ 52,295	$ 69,694

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Other Assets and Prepaid Expenses - Summary of Other Assets, Non-current (Detail) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Other Assets, Noncurrent [Abstract]
Deferred tax assets	$ 57,742	$ 25,351
Other assets	71,795	$ 25,351
Seller indemnification noncurrent	$ 14,053

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Property and Equipment, Net - Summary of Property and Equipment, Net (Detail) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 71,769	$ 55,975
Accumulated depreciation	(49,036)	(34,770)
Total property and equipment, net	22,462	21,205
Impairment charge	(271)
Computer Hardware and Software [member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	48,895	31,966
Accumulated depreciation	(37,171)	(23,955)
Office Furniture and Fixture [member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	17,909	21,882
Accumulated depreciation	(10,169)	(10,345)
Buildings [member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	3,128	2,086
Accumulated depreciation	(852)	(470)
Land [member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	266	$ 41
Vehicles [member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	1,571
Accumulated depreciation	$ (844)

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Property and Equipment, Net - Summary of Property and Equipment, Net (Parenthetical) (Detail) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Property, Plant and Equipment [Line Items]
Accumulated Depreciation	$ 49,036	$ 34,770
Computer Hardware and Software [member]
Property, Plant and Equipment [Line Items]
Accumulated Depreciation	37,171	23,955
Office Furniture and Fixture [member]
Property, Plant and Equipment [Line Items]
Accumulated Depreciation	10,169	10,345
Buildings [member]
Property, Plant and Equipment [Line Items]
Accumulated Depreciation	852	$ 470
Vehicles [member]
Property, Plant and Equipment [Line Items]
Accumulated Depreciation	$ 844

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Property and Equipment, Net - Summary of movements in property, plant and equipment (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Property, Plant and Equipment [Abstract]
Balance, beginning of year	$ 21,205	$ 19,716
Additions	3,458	5,942
Disposals		597
Write-off of leasehold improvements	(3,661)
Acquisitions	8,935	2,420
Depreciation	(7,981)	(6,659)	$ (4,985)
Impairment charge	(271)
Foreign currency translation adjustment	777	383
Balance, end of year	$ 22,462	$ 21,205

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Property and Equipment, Net - Summary of Depreciation expense property, plant and equipment (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Property, Plant and Equipment [Line Items]
Depreciation	$ 7,981	$ 6,659	$ 4,985
Technology and Product Development [member]
Property, Plant and Equipment [Line Items]
Depreciation	4,351	4,001	1,036
General and Administrative Expense [member]
Property, Plant and Equipment [Line Items]
Depreciation	3,377	$ 2,658	$ 3,949
Selling and Marketing Expense [member]
Property, Plant and Equipment [Line Items]
Depreciation	$ 253

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Property and Equipment, Net - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2020	Dec. 31, 2018
Impairment of Long-Lived Assets Held-for-use	$ 271	$ 1,917	$ 363

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Intangible assets, net- Schedule Of Indefinite-lived And Definite-lived Intangible Assets (Detail) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Indefinite-lived Intangible Assets (Excluding Goodwill) [Abstract]
Trademarks and domains	$ 13,882	$ 13,882
Finite lived intangible assets gross	164,814	91,872
Accumulated amortization	(67,266)	(42,253)
Impairment charge	(1,053)
Total intangible assets, net	96,495	49,619
Licenses [member]
Indefinite-lived Intangible Assets (Excluding Goodwill) [Abstract]
Finite lived intangible assets gross	9,823	1,795
Accumulated amortization	(7,751)	(154)
Customer relationships [member]
Indefinite-lived Intangible Assets (Excluding Goodwill) [Abstract]
Finite lived intangible assets gross	35,706	3,663
Accumulated amortization	(2,745)	(494)
Trademarks and domains [member]
Indefinite-lived Intangible Assets (Excluding Goodwill) [Abstract]
Finite lived intangible assets gross	14,296
Software development costs [member]
Indefinite-lived Intangible Assets (Excluding Goodwill) [Abstract]
Finite lived intangible assets gross	91,107	72,532
Accumulated amortization	$ (56,770)	$ (41,605)

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Intangible assets, net - Intangible assets, net- Schedule Of Indefinite-lived And Definite-lived Intangible Assets (parenthetical) (Detail) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Accumulated Amortization	$ 67,266	$ 42,253
Software development costs [member]
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Accumulated Amortization	56,770	41,605
Licensing Agreements [member]
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Accumulated Amortization	7,751	154
Customer relationships [member]
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Accumulated Amortization	$ 2,745	$ 494

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Intangible assets, net - Summary of Finite-Lived Intangible Assets (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Finite-Lived Intangible Assets [Line Items]
Balance, beginning of year	$ 49,619	$ 37,512
Additions	14,028	24,614
Acquisitions	52,501	3,663
Amortization	(21,699)	(16,137)	$ (10,140)
Impairment charge	(1,053)
Foreign currency translation adjustment	3,099	(33)
Balance, end of year	$ 96,495	$ 49,619	$ 37,512

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Intangible assets, net - Summary of Amortization expense Of Intangible Assets (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Amortization of intangible assets	$ 21,699	$ 16,137	$ 10,140
Technology and Product Development [member]
Amortization of intangible assets	17,190	14,198	9,495
General and Administrative Expense [member]
Amortization of intangible assets	3,753	1,523	$ 645
Selling and Marketing Expense [member]
Amortization of intangible assets	$ 756	$ 416

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Intangible assets, net - Schedule of Finite Lived Intangible Assets Future Amortization Expense (Detail) $ in Thousands	Dec. 31, 2020 USD ($)
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
2021	$ 16,794
2022	16,652
2023	16,641
2024	6,445
2025	6,259
2026 and thereafter	19,822
Total	$ 82,613

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Intangible assets, net - Additional Information (Detail) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Impairment of intangible assets	$ 1,053
Fair value assets written down		$ 815

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Goodwill - Summary Of Goodwill (Detail) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Goodwill [Line Items]
Goodwill	$ 123,217	$ 46,956	$ 36,207

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Goodwill - Summary Of Changes In Goodwill By Reportable Segment (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Goodwill [Line Items]
Balance of beginning of period	$ 46,956	$ 36,207
Additions	73,251	10,865
Impairment charge	(593)
Foreign currency translation adjustments	3,603	(116)
Balance at end of period	123,217	46,956
Air [member]
Goodwill [Line Items]
Balance of beginning of period	38,883	36,207
Additions	2,328	2,772
Impairment charge	(593)
Foreign currency translation adjustments	(2,677)	(96)
Balance at end of period	37,941	38,883
Packages, Hotels and Other Travel Products [member]
Goodwill [Line Items]
Balance of beginning of period	8,073
Additions	70,923	8,093
Foreign currency translation adjustments	6,280	(20)
Balance at end of period	$ 85,276	$ 8,073

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Goodwill - Additional Information (Detail) $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill, Impairment Loss	$ 593

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Accounts payable and accrued expenses - Summary of Accounts Payable and Accrued Expenses (Detail) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Accounts Payable And Accrued Expenses [Line Items]
Accounts payable and accrued expenses	$ 32,161	$ 59,673
Marketing Suppliers [member]
Accounts Payable And Accrued Expenses [Line Items]
Accounts payable and accrued expenses	7,706	29,957
Unbilled Suppliers [member]
Accounts Payable And Accrued Expenses [Line Items]
Accounts payable and accrued expenses	15,360	10,742
Other Suppliers [member]
Accounts Payable And Accrued Expenses [Line Items]
Accounts payable and accrued expenses	$ 9,095	$ 18,974

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Travel Accounts Payable - Schedule of Travel Accounts Payables (Detail) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Accounts Payable And Accrued Expenses [Line Items]
Travel accounts payable	$ 229,435	$ 206,954
Hotels and Other Travel Service Suppliers [member]
Accounts Payable And Accrued Expenses [Line Items]
Travel accounts payable	131,744	179,397
Cancelled reservations pending payment to travelers [member]
Accounts Payable And Accrued Expenses [Line Items]
Travel accounts payable	90,764
Airlines [member]
Accounts Payable And Accrued Expenses [Line Items]
Travel accounts payable	$ 6,927	$ 27,557

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Travel Accounts Payable - Schedule Of Travel Accounts Payables (Parenthetical) (Detail) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Payables and Accruals [Abstract]
Deferred merchant bookings	$ 76,603	$ 140,987

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Other Liabilities - Summary of Other Current Liabilities (Detail) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Other Liabilities, Current [Abstract]
Taxes payable	$ 32,955	$ 10,958
Salaries payable	14,444	25,196
Seller financing Viajes Falabella	5,624	5,477
Other	3,086	5,091
Other current liabilities	$ 56,109	$ 46,722

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Other Liabilities - Summary of Other Non-current Liabilities (Detail) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Other Liabilities, Noncurrent [Abstract]
Seller financing Viajes Falabella		$ 5,219
Taxes payable	$ 598	1,427
Deferred tax liabilities	11,111
Purchase price payable for Best Day Group	8,768
Accrued earnout liability	3,765
Promissory notes issued	14,490
Equity method investments	2,059
Other	4,122
Other non-current liabilities	$ 44,913	$ 6,646

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Other Liabilities - Summary of Other Non-current Liabilities (Parenthetical) (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Oct. 01, 2024
Accrued earnout liability	$ 3,765
Commercial Paper [member]
Debt instrument face amount	$ 14,323
Debt Instrument, Interest Rate	5.00%
Debt Instrument, Maturity Date	Oct. 01, 2023
Debt Instrument, Fair Value Disclosure	$ 14,341
Scenario, forecast [member] | Maximum [member] | Earnout Consideration [member]
Accrued earnout liability		$ 20,000

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Derivative financial instruments - Summary of Derivative Position (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Argentinian Pesos [member] | Derivative Instrument 1 [member] | Long [Member]
Derivative [Line Items]
Notional amount		$ 15,000
Type		Purchase
Maturity		Jan - 20
Fair value		$ (360)
Argentinian Pesos [member] | Derivative Instrument 4 [member] | Short [Member]
Derivative [Line Items]
Notional amount		$ 6,000
Type		Sell
Maturity		Jan - 20
Fair value		$ 335
Brazil, Brazil Real [member] | Derivative Instrument 1 [member] | Short [Member]
Derivative [Line Items]
Notional amount	$ 10,500
Type	Sell
Maturity	Jan / Feb 21
Fair value	$ 77
Chile Pesos [member] | Derivative Instrument 2 [member] | Long [Member]
Derivative [Line Items]
Notional amount		$ 24,500
Type		Purchase
Maturity		Jan / Feb / Mar - 20
Fair value		$ (848)
Colombia, Pesos | Derivative Instrument 3 [member] | Long [Member]
Derivative [Line Items]
Notional amount		$ 2,000
Type		Purchase
Maturity		Jan - 20
Fair value		$ (63)
Mexican Pesos [member] | Derivative Instrument 2 [member] | Short [Member]
Derivative [Line Items]
Notional amount	$ 15,000
Type	Sell
Maturity	Jan 21
Fair value	$ 395
Mexican Pesos [member] | Derivative Instrument 3 [member] | Short [Member]
Derivative [Line Items]
Notional amount	$ 10,000
Type	Sell
Maturity	Jan 21
Fair value	$ 262
Mexican Pesos [member] | Derivative Instrument 4 [member] | Short [Member]
Derivative [Line Items]
Notional amount	$ 5,000
Type	Sell
Maturity	Jan 21
Fair value	$ 51
Mexican Pesos [member] | Derivative Instrument 5 [member] | Short [Member]
Derivative [Line Items]
Notional amount	$ 10,000	$ 7,000
Type	Sell	Sell
Maturity	Feb 21	Jan / Feb - 20
Fair value	$ 166	$ 119
Mexican Pesos [member] | Derivative Instrument 6 [member] | Short [Member]
Derivative [Line Items]
Notional amount	$ 10,000
Type	Sell
Maturity	Feb 21
Fair value	$ 103
Mexican Pesos [member] | Derivative Instrument 7 [member] | Short [Member]
Derivative [Line Items]
Notional amount	$ 10,000
Type	Sell
Maturity	Feb 21
Fair value	$ 103

XML

Restructuring and Related Reorganization Charges - Additional Information (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2018
Restructuring Cost and Reserve [Line Items]
Restructuring charges	$ 13,360	$ 0
Payments for restructuring	13,209
Cost of Sales [member]
Restructuring Cost and Reserve [Line Items]
Payments for restructuring	2,662
Selling and Marketing Expense [member]
Restructuring Cost and Reserve [Line Items]
Payments for restructuring	3,851
General and Administrative Expense [member]
Restructuring Cost and Reserve [Line Items]
Restructuring charges	399
Payments for restructuring	3,239
Technology and Product Development [member]
Restructuring Cost and Reserve [Line Items]
Payments for restructuring	3,209
Employee severance [member]
Restructuring Cost and Reserve [Line Items]
Restructuring headcount reduction benefits recognized	$ 12,961
Restructuring reserve adjustment description	Based on current plans, we expect total severance benefits in 2021 to decrease.
Restructuring charges	$ 12,961
Payments for restructuring	12,961
Other restructuring [member]
Restructuring Cost and Reserve [Line Items]
Restructuring charges	399
Payments for restructuring	$ 248

XML

Restructuring and Related Reorganization Charges - Summary of restructuring and related reorganization activity (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2018
Restructuring Cost and Reserve [Line Items]
Accrued liability	$ 0
Charges	13,360	$ 0
Payments	(13,209)
Accrued liability	151
Employee severance [member]
Restructuring Cost and Reserve [Line Items]
Accrued liability	0
Charges	12,961
Payments	(12,961)
Accrued liability	0
Other restructuring [member]
Restructuring Cost and Reserve [Line Items]
Accrued liability	0
Charges	399
Payments	(248)
Accrued liability	$ 151

XML

Income Taxes - Summary of U.S and Foreign (loss) / Income Before Income Taxes (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest [Abstract]
U.S.	$ (15,510)	$ 1,942	$ 17,296
Foreign	(148,797)	(28,077)	8,927
Total	$ (164,307)	$ (26,135)	$ 26,223

XML

Income Taxes - Summary of Income Tax Expense Components (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Current income tax expense:
U.S. Federal	$ 1,424	$ 1,035	$ (1,608)
Foreign	(4,440)	(8,235)	(14,210)
Total current income tax expense	(3,016)	(7,200)	(15,818)
Deferred income tax expense:
U.S. Federal	2,653
Foreign	21,801	12,425	8,749
Total deferred income tax expense	24,454	12,425	8,749
Income tax benefit / (expense)	$ 21,438	$ 5,225	$ (7,069)

XML

Income Taxes - Summary of Classification of Deferred Tax Assets Liabilities by Current and Non-current (Detail) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Components of Deferred Tax Assets and Liabilities [Abstract]
Total deferred tax assets	$ 66,768	$ 36,700
Less valuation allowance	(9,026)	(11,349)	$ (18,007)	$ (42,584)
Net deferred tax assets	57,742	25,351
Non-current tax liabilities	11,111
Total deferred tax liabilities	11,111
Total deferred tax	$ 46,631	$ 25,351

XML

Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands		3 Months Ended	12 Months Ended
	Jan. 01, 2018	Sep. 30, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income Tax [Line Items]
Federal Statutory Income Tax Rate, Percent	21.00%					35.00%
Loss carryforwards for income tax purposes			$ 143,823
Operating loss carryforwards without expiration date			52,684
Valuation allowance			9,026	$ 11,349	$ 18,007	$ 42,584
Decrease valuation allowance			(3,077)	$ (12,550)	(25,574)
Undistributed earnings of foreign subsidiaries			$ 27,506
Effective income tax rate			13.00%	20.00%
weighted average tax rate			27.00%	29.00%
Unrecognized tax benefits			$ 32,906	$ 0	0	$ 0
Interest and penalties			18,879
Interest expenses			$ 1,128	0	$ 0
Income tax credits and adjustments		$ 1,649
Percentage of taxable income			80.00%
Tax Year 2014 [Member] | Mexican Tax Authority [Member]
Income Tax [Line Items]
Income tax examination			2014
Tax Year 2015 [Member] | Mexican Tax Authority [Member]
Income Tax [Line Items]
Income tax examination			2015
Tax Year 2017 [Member] | Mexican Tax Authority [Member]
Income Tax [Line Items]
Income tax examination			2017
Brazil [member]
Income Tax [Line Items]
Loss carryforwards for income tax purposes			$ 48,584
Valuation allowance			$ 8,742
Decrease valuation allowance				$ 2,323
Percentage of taxable income			30.00%
Argentina [member]
Income Tax [Line Items]
Loss carryforwards for income tax purposes			$ 35,408
Effective income tax rate			15.00%

XML

Income Taxes - Summary of Tax Loss Carryforwards Expiration (Detail) $ in Thousands	Dec. 31, 2020 USD ($)
Operating Loss Carryforwards [Line Items]
NOLs Amount	$ 143,823
Without expiration dates	52,684
U.S. [Member]
Operating Loss Carryforwards [Line Items]
Without expiration dates	1,305
TOTAL	1,305
U.S. [Member] | Expires 2021 [Member]
Operating Loss Carryforwards [Line Items]
NOLs Amount	0
U.S. [Member] | Expires 2022 [Member]
Operating Loss Carryforwards [Line Items]
NOLs Amount	0
U.S. [Member] | Expires 2023 [Member]
Operating Loss Carryforwards [Line Items]
NOLs Amount	0
U.S. [Member] | Expires 2024 and thereafter [Member]
Operating Loss Carryforwards [Line Items]
NOLs Amount	0
Foreign [Member]
Operating Loss Carryforwards [Line Items]
Without expiration dates	51,379
TOTAL	142,518
Foreign [Member] | Expires 2021 [Member]
Operating Loss Carryforwards [Line Items]
NOLs Amount	536
Foreign [Member] | Expires 2022 [Member]
Operating Loss Carryforwards [Line Items]
NOLs Amount	977
Foreign [Member] | Expires 2023 [Member]
Operating Loss Carryforwards [Line Items]
NOLs Amount	31,162
Foreign [Member] | Expires 2024 and thereafter [Member]
Operating Loss Carryforwards [Line Items]
NOLs Amount	$ 58,464

XML

Income Taxes - Summary of Tax Loss Carryforwards Expiration (Parenthetical) (Detail) $ in Thousands	Dec. 31, 2020 USD ($)
Income Tax Disclosure [Abstract]
Tax loss carryforwards booked as valuation allowance	$ 58,765

XML

Income taxes - Summary of NOLs by country of origin (Detail) $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($)
Operating Loss Carryforwards [Line Items]
NOLs Amount	$ 143,823
Brazil [member]
Operating Loss Carryforwards [Line Items]
NOLs Amount	$ 48,584
NOLs carryforwards expiration description	No expiration. Offset limitation to 30% of taxable income
Mexico [member]
Operating Loss Carryforwards [Line Items]
NOLs Amount	$ 47,824
Net operating loss carryforward expiration period	10 years
Argentina [member]
Operating Loss Carryforwards [Line Items]
NOLs Amount	$ 35,408
Net operating loss carryforward expiration period	5 years
Colombia [member]
Operating Loss Carryforwards [Line Items]
NOLs Amount	$ 7,559
Net operating loss carryforward expiration period	12 years
Others [member]
Operating Loss Carryforwards [Line Items]
NOLs Amount	$ 4,448

XML

Income taxes - Summary of NOLs by country of origin (Parenthetical) (Detail)	12 Months Ended
	Dec. 31, 2020
Operating Loss Carryforwards [Line Items]
Percentage of Taxable Income	80.00%
Brazil [member]
Operating Loss Carryforwards [Line Items]
Percentage of Taxable Income	30.00%

XML

Income Taxes - Summary of Composition of Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Components of Deferred Tax Assets and Liabilities [Abstract]
Tax loss carryforwards	$ 33,036	$ 25,717
Allowance for credit expected losses	4,161	462
Royalties	533	69
Provisions and other assets	22,978	11,319
Property and equipment	268	(438)
Intangible assets	(9,377)
Others	4,058	(429)
Total deferred tax assets, net before valuation allowance	55,657	36,700
Less valuation allowance	(9,026)	(11,349)	$ (18,007)	$ (42,584)
Total deferred tax assets, net after valuation allowance	$ 46,631	$ 25,351

XML

Income Taxes - Summary of Reconciliation of Difference between Actual Provision for Income Taxes and Provision Computed by Applying Weighted Average Income Tax Rate (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Income Tax Disclosure [Abstract]
Net (loss) / income before income tax	$ (164,307)	$ (26,135)	$ 26,223
Weighted average income tax rate	27.00%	29.00%	39.00%
Income tax (benefit) / expense at weighted average income tax rate	$ (43,651)	$ (7,474)	$ 10,273
Permanent differences:
Non-taxable income	7,959	(469)	(1,448)
Foreign non-creditable withholding tax	1,471	4,439	4,193
Non-deductible expenses	12,161	1,054	1,346
Currency translation adjustment	1,289	1,891	1,902
Tax credits recovery	12	(157)
Others	20	553	540
Provisions and contingencies	1,747
True up	849	(2,693)	1,204
Change in Valuation allowance	(3,367)	(5,010)	(10,941)
Change in tax rate	72	2,641
Income tax (benefit) / expense	$ (21,438)	$ (5,225)	$ 7,069

XML

Income Taxes - Summary of Changes in Valuation Allowance (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Income Tax Disclosure [Abstract]
Balance of beginning of period	$ 11,349	$ 18,007	$ 42,584
Increases	754	5,892	997
Decreases	(3,077)	(12,550)	(25,574)
Balance at end of period	$ 9,026	$ 11,349	$ 18,007

XML

Income taxes - Summary of income tax contingencies (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Income Tax Contingency [Line Items]
Balance, beginning of year	$ 0	$ 0	$ 0
Increases to tax positions related to current year	0	0	0
Increases to tax positions related to prior years	31,778	0	0
Decreases to tax positions related to prior years	0	0	0
Reductions due to lapsed statute of limitations	0	0	0
Settlements during current year	0	0	0
Interest and penalties	1,128	0	0
Balance, end of year	$ 32,906	$ 0	$ 0

XML

Segment Information - Additional Information (Detail)	12 Months Ended
	Dec. 31, 2020 Segment
Segment Reporting [Abstract]
Number of operating segments	2

XML

Segment Information - Schedule of Segment Information (Detail) - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Segment Reporting Information [Line Items]
Revenue	[1]	$ 131,334	$ 524,876	$ 530,614
Adjusted EBITDA		(121,813)	26,643	67,644
Depreciation and amortization		(29,680)	(22,796)	(15,125)
Stock-based compensation		(7,312)	(11,686)	(6,766)
Impairment charges		(1,917)		(363)
Restructuring charges		(13,360)		0
Acquisition Transaction Costs		(3,135)	(1,081)
Operating (loss) / income		(177,217)	(8,920)	45,390
Financial income		12,910
Financial expense			(17,215)	(19,167)
Income loss before income tax		(164,307)	(26,135)	26,223
Income tax benefit / (expense)		21,438	5,225	(7,069)
Net loss for the year		(142,869)	(20,910)	19,154
Net loss attributable to redeemable non-controlling interest		282
Net loss attributable to Despegar.com, Corp		(142,587)	(20,910)	19,154
Operating Segments [member] | Air [member]
Segment Reporting Information [Line Items]
Revenue		62,713	201,638	214,804
Adjusted EBITDA		(32,890)	3,346	27,790
Depreciation and amortization		(9,784)	(7,716)	(4,630)
Operating (loss) / income		(42,674)	(4,370)	23,160
Operating Segments [member] | Packages, Hotels and Other Travel Products [member]
Segment Reporting Information [Line Items]
Revenue		68,621	323,238	315,810
Adjusted EBITDA		(82,377)	36,546	37,739
Depreciation and amortization		(9,784)	(7,716)	(4,582)
Operating (loss) / income		(92,161)	28,830	33,157
Unallocated [member]
Segment Reporting Information [Line Items]
Adjusted EBITDA		(6,546)	(13,249)	2,115
Depreciation and amortization		(10,112)	(7,364)	(5,913)
Stock-based compensation		(7,312)	(11,686)	(6,766)
Impairment charges		(1,917)		(363)
Restructuring charges		(13,360)
Acquisition Transaction Costs		(3,135)	(1,081)
Operating (loss) / income		$ (42,382)	$ (33,380)	$ (10,927)

[1] Includes $7,066, $38,760 and $43,975 for related party transactions for the years 2020, 2019 and 2018, respectively. See Note 22.

XML

Segment information - Summary of Revenues by Segment and Business Model (Detail) - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Segment Reporting Information [Line Items]
Revenue	[1]	$ 131,334	$ 524,876	$ 530,614
Argentina [member]
Segment Reporting Information [Line Items]
Revenue		16,112	98,946	122,656
Brazil [member]
Segment Reporting Information [Line Items]
Revenue		45,289	159,676	165,688
Uruguay [member]
Segment Reporting Information [Line Items]
Revenue		9,240	131,160	142,902
Mexico [member]
Segment Reporting Information [Line Items]
Revenue		30,801	39,500	38,243
Other Countries [member]
Segment Reporting Information [Line Items]
Revenue	[2]	29,892	95,594	61,125
Commissions and Service Fees [Member]
Segment Reporting Information [Line Items]
Revenue		100,908	426,082	428,722
Incentives [Member]
Segment Reporting Information [Line Items]
Revenue		17,040	72,912	80,710
Advertising [Member]
Segment Reporting Information [Line Items]
Revenue		5,040	15,063	15,170
Others [Member]
Segment Reporting Information [Line Items]
Revenue	[3]	8,346	10,819	6,012
Prepay/Merchant model [member]
Segment Reporting Information [Line Items]
Revenue		102,591	407,258	415,812
Pay-at-Destination/Agency Model [member]
Segment Reporting Information [Line Items]
Revenue		1,305	13,130	20,143
Others [member]
Segment Reporting Information [Line Items]
Revenue	[4]	$ 27,438	$ 104,488	$ 94,659

[1] Includes $7,066, $38,760 and $43,975 for related party transactions for the years 2020, 2019 and 2018, respectively. See Note 22.

[2] Other countries include Chile, Peru, Colombia, Ecuador and United States.

[3] Others includes breakage, loyalty, destination services and interest revenue.

[4] Others includes incentive fees, advertising, breakage, loyalty and interest revenue.

XML

Segment Information - Schedule of Allocation of Long-lived Assets Based on Geography (Detail) - USD ($) $ in Thousands		Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Segment Reporting Information [Line Items]
Goodwill		$ 123,217	$ 46,956	$ 36,207
Intangible assets		96,495	49,619
Long-lived assets		22,462	21,205
Argentina [member]
Segment Reporting Information [Line Items]
Goodwill		2,455	3,048
Intangible assets		28,104	28,487
Long-lived assets		9,661	7,067
Brazil [member]
Segment Reporting Information [Line Items]
Goodwill		14,132	10,508
Long-lived assets		2,056	3,779
Mexico [member]
Segment Reporting Information [Line Items]
Goodwill		81,137	7,543
Intangible assets		36,546
Long-lived assets		3,538
Uruguay [member]
Segment Reporting Information [Line Items]
Goodwill		16,839	16,839
Intangible assets		28,500	14,859
Long-lived assets		499	929
USA [member]
Segment Reporting Information [Line Items]
Long-lived assets		3,304	4,357
Other Countries [member]
Segment Reporting Information [Line Items]
Goodwill	[1]	8,654	9,018
Intangible assets	[2]	3,345	6,273
Long-lived assets	[3]	$ 3,404	$ 5,073

[1] Other countries include Chile, Peru and Colombia

[2] Other countries include Chile, Peru, Colombia, Brazil and United States.

[3] Other countries include Chile, Peru, Colombia and Ecuador.

XML

Commitments and Contingencies - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands		12 Months Ended
	Oct. 01, 2020	Dec. 31, 2020	Sep. 30, 2020
Other Commitments [Line Items]
Accrued earnout liability		$ 3,765
Litigation expenses		9,990
Provided for labor, social security and non-income tax contingencies		23,357
Mr Julin Balbuena Alonso And BD Operadora De ServiciosSA De CV [Member] | General and Administrative Expense [member]
Other Commitments [Line Items]
Accrued payables on completion of services		1,819
Best Day Group [Member]
Other Commitments [Line Items]
Accrued earnout liability		3,765
Fair value contingent consideration		$ 1,526
Earnout Consideration [member] | Best Day Group [Member] | Share Trigerring Price One [Member]
Other Commitments [Line Items]
Share Price		$ 10
Minimum [member] | Mr Julin Balbuena Alonso And BD Operadora De ServiciosSA De CV [Member] | Services Agreement [Member]
Other Commitments [Line Items]
Related party costs	$ 0
Minimum [member] | Earnout Consideration [member] | Best Day Group [Member]
Other Commitments [Line Items]
Accrued earnout liability		$ 0
Minimum [member] | Earnout Consideration [member] | Best Day Group [Member] | Share Trigerring Price One [Member]
Other Commitments [Line Items]
Share Price		$ 10
Minimum [member] | Earnout Consideration [member] | Best Day Group [Member] | Share Trigerring Price Two [Member]
Other Commitments [Line Items]
Share Price		15
Minimum [member] | Earnout Consideration [member] | Best Day Group [Member] | Share Trigerring Price Three [Member]
Other Commitments [Line Items]
Share Price		$ 20
Maximum [member] | Mr Julin Balbuena Alonso And BD Operadora De ServiciosSA De CV [Member] | Services Agreement [Member]
Other Commitments [Line Items]
Related party costs	$ 5,000
Maximum [member] | Earnout Consideration [member] | Best Day Group [Member]
Other Commitments [Line Items]
Accrued earnout liability			$ 20,000
Business combination, contingent consideration, liability, payable date		October 1, 2024
Maximum [member] | Earnout Consideration [member] | Best Day Group [Member] | Price Between Ten And Fifteen [Member]
Other Commitments [Line Items]
Accrued earnout liability		$ 5,000
Maximum [member] | Earnout Consideration [member] | Best Day Group [Member] | Price Between Fifteen And Twenty [Member]
Other Commitments [Line Items]
Accrued earnout liability		10,000
Maximum [member] | Earnout Consideration [member] | Best Day Group [Member] | Price Between Twenty And Twenty Five [Member]
Other Commitments [Line Items]
Accrued earnout liability		15,000
Maximum [member] | Earnout Consideration [member] | Best Day Group [Member] | Price is more than twenty five [Member]
Other Commitments [Line Items]
Accrued earnout liability		$ 20,000
Maximum [member] | Earnout Consideration [member] | Best Day Group [Member] | Share Trigerring Price Two [Member]
Other Commitments [Line Items]
Share Price		$ 15
Maximum [member] | Earnout Consideration [member] | Best Day Group [Member] | Share Trigerring Price Three [Member]
Other Commitments [Line Items]
Share Price		20
Maximum [member] | Earnout Consideration [member] | Best Day Group [Member] | Share Trigerring Price Four [Member]
Other Commitments [Line Items]
Share Price		$ 25

XML

Related Party Transaction - Additional Information (Detail) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Aug. 31, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Related Party Transaction [Line Items]
Related party liability		$ 125,000	$ 125,000
Net related party transactions		$ 7,066	38,760	$ 43,975
Despegar outsourcing agreement [Member]
Related Party Transaction [Line Items]
Renewal of agreement for additional period term	1 year
Expedia [member]
Related Party Transaction [Line Items]
Maximum percentage of inventory outsourced		10.00%
Terminataion Fee		$ 125,000
Expedia [member] | Expedia amended and restated lodging outsourcing agreement and the despegar outsourcing agreement [Member]
Related Party Transaction [Line Items]
Related party liability		11,177	67,047
Net related party transactions		$ 7,066	$ 38,760	$ 43,975
Percentage of revenue		5.00%	7.00%	8.00%

XML

Fair Value Measurements - Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - Fair Value, Measurements, Recurring [member] - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives	$ 725	$ 454
Total assets at fair value	133,817	190,666
Foreign currency forward contract		(1,271)
Accrued earnout liability	(3,765)
Total financial Liabilities	(3,765)	(1,271)
Money market funds [member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	88,061	36,374
Time deposits [member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	45,031	153,838
Level 1 [member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets at fair value	133,092	190,212
Level 1 [member] | Money market funds [member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	88,061	36,374
Level 1 [member] | Time deposits [member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	45,031	153,838
Level 2 [member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives	725	454
Total assets at fair value	725	454
Foreign currency forward contract		(1,271)
Total financial Liabilities		$ (1,271)
Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Accrued earnout liability	(3,765)
Total financial Liabilities	$ (3,765)

XML

Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended			12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Dec. 31, 2020	Dec. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impairment Charges				$ 1,917	$ 363
Fair Value Nonrecurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impairment Charges	$ 593	$ 271	$ 1,053

XML

Earnings Per Share - Additional Information (Detail) - shares shares in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Share-based Payment Arrangement [member]
Impairment Effects on Earnings Per Share [Line Items]
Antidilutive securities excluded from the computation of earnings per share	1,680	1,150
Convertible Preferred Stock [member]
Impairment Effects on Earnings Per Share [Line Items]
Antidilutive securities excluded from the computation of earnings per share	5,405

XML

Earnings Per Share - Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Basic and diluted earnings per share
Net loss for the year	$ (142,869)	$ (20,910)	$ 19,154
Less: Net loss for the year attributable to redeemable and non-redeemable non-controlling interest	282
Net loss for the year attributable to Despegar.com, Corp.	(142,587)	(20,910)	$ 19,154
Accretion of redeemable non-controlling interest to redemption value	(78)
Accretion of redeemable Series A preferred stock to redemption value	(2,831)
Accrued dividends of redeemable Series A preferred stock	(4,212)
Dividends of redeemable Series B preferred stock	(553)
Net loss for the year attributable to Despegar.com, Corp. common shareholders	(150,261)	(20,910)
Numerator of basic and diluted earnings per share	$ (150,261)	$ (20,910)
Weighted average common shares outstanding—basic and diluted	73,001	69,465
Denominator of basic and diluted earnings per share	73,001	69,465
Basic and diluted earnings per share	$ (2.06)	$ (0.30)

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Shareholders' equity and mezzanine equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Preferred stock shares outstanding	0	0
Treasury stock common shares	68,267	5,008,307
Share repurchase program [Member]
Stock repurchase program remaining authorized repurchase amount	$ 0
Dividend paid [Member]
Dividends	$ 553
L Catterton Investment Agreement [Member] | Penny warrants [Member]
Class of warrants or right number of securities issued in period	11,000,000
Warrants Exercise price	$ 0.01
Class of warrant or right expiration period	10 years
Common Stock [Member]
Common stock voting rights	1 vote per share
Common Stock [Member] | Share repurchase program [Member]
Share repurchase program, authorized amount		$ 100,000	$ 75,000
Accumulated Other Comprehensive Income / (Loss) [Member]
Accumulated other comprehensive income loss foreign currency translation adjustments net of tax	$ 13,190	$ 2,441	$ 13,272
Series A Preferred Stock [Member]
Preferred stock shares authorized	150,000
Series B Preferred Stock [Member]
Preferred stock shares authorized	50,000
Series B Preferred Stock [Member] | Dividend paid [Member]
Dividends	$ 553

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Shareholders' equity and mezzanine equity - Summary of Shares Repurchased under the Authorized Program (Detail) - Share repurchase program [Member] - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Equity, Class of Treasury Stock [Line Items]
Number of shares repurchased	0	3,463,832	1,544,475
Average price per share	$ 0	$ 12.17	$ 16.84
Total cost of repurchases	$ 0	$ 42,167	$ 25,999

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Financial income / (expense), net - Summary of Components of Financial Income Expense Net (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Interest Income (Expense), Net [Abstract]
Foreign exchange gains / (losses)	$ 11,131	$ (6,982)	$ (10,511)
Gains / (losses) on derivative financial instruments	10,648	3,648	45
Interest income	3,857	7,944	7,415
Interest expense	(5,471)	(5,767)	(4,370)
Factoring expense	(2,194)	(15,379)	(12,368)
Bank expenses	(1,371)	(481)	(434)
Others	(3,690)	(198)	1,056
Total financial income / (expense), net	$ 12,910	$ (17,215)	$ (19,167)

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Stock-Based Compensation - Schedule of Share Based Compensation Restricted Stock Units Award Activity (Detail) - Restricted Stock Units (RSUs) [member] - $ / shares	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Beginning balance	$ 12.08	$ 12.33	$ 7.47
Granted	7.89	11.49	12.48
Cancelled	10.32	12.64
Vested	10.95	12.23	10.88
Ending balance	$ 9.33	$ 12.08	$ 12.33
Beginning balance	1,149,744	1,319,971	90,626
Granted	1,409,680	340,565	1,394,159
Vested	(419,367)	(362,577)	(164,814)
Cancelled	(460,851)	(148,215)
Ending balance	1,679,206	1,149,744	1,319,971

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Stock-Based Compensation - Schedule of Share Based Compensation Restricted Stock Units Award Activity (Parenthetical) (Detail)	12 Months Ended
	Dec. 31, 2020 shares
2015 Restricted Stock Unit Plan [member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of vested RSUs	90,626

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Stock-Based Compensation - Summary of Stock Option Activity (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Number of options, beginning balance	2,537,888	2,792,361	3,496,058
Number of options, exercised	(33,133)	(44,096)	(4,973)
Number of options, granted		225,903	1,174,489
Number of options, forfeited/cancelled	(1,685,242)	(436,280)	(1,873,213)
Number of options, ending balance	819,513	2,537,888	2,792,361
Number of options, exercisable	423,644
Number of options, vested and expected to vest after December 31, 2020	819,513
Weighted Average Exercise Price, balance	$ 17.50	$ 17.50	$ 26.02
Weighted Average Exercise Price, exercised	11.31	12.00	12.00
Weighted Average Exercise Price, granted		17.50	23.50
Weighted Average Exercise Price, forfeited/cancelled	17.05	17.50	26.43
Weighted Average Exercise Price, balance	9.11	$ 17.50	$ 17.50
Weighted Average Exercise Price, exercisable	6.03
Weighted Average Exercise Price, vested and expected to vest after December 31, 2020	$ 12.41
Remaining Contractual Life, outstanding	2 years
Remaining Contractual Life, exercisable	2 years
Remaining Contractual Life, vested and expected to vest after December 31, 2020	2 years
Aggregate Intrinsic Value, balance	$ 10,500
Aggregate Intrinsic Value, exercisable	5,430
Aggregate Intrinsic Value, vested and expected to vest after December 31, 2020	$ 5,070.00

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Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total Compensation Cost Not Yet Recognized	$ 20,391
Unrecognized stock-based compensation expense, expected weighted average period for recognition	3 years
Share Based Compensation Expense	$ 7,312	$ 11,686	$ 6,766
Share Based Payment Award, Options, Grants In Period, Grant Date Fair Value	$ 0
Restricted stock units vested in period total fair market value	$ 3,648	5,707	1,548
Majority of Stock options vesting period	2 years
Total intrinsic value of stock options exercised	$ 10,498	34,211	34,653
Cash received from stock based award exercises for the period	$ 370	$ 564	$ 136
Pretax intrinsic value [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation arrangements by share based payment award options exercises in period based on closing stock price	$ 12.81
Employee Stock Option [member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share Based Payment Award, Options, Grants In Period, Grant Date Fair Value	$ 0	$ 2.91	$ 13.47
Restricted Stock Units (RSUs) [member] | Maximum [member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting Percentage	33.00%
Restricted Stock Units (RSUs) [member] | Minimum [member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting Percentage	25.00%
Amended and Restated 2016 Stock Incentive Plan [Member] | Employee Stock Option [member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Majority of Stock options vesting period	6 years
Amended and Restated 2016 Stock Incentive Plan [Member] | Employee Stock Option [member] | Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares approved for issuance under the plan	1,919,099
Amended and Restated 2016 Stock Incentive Plan [Member] | Restricted Stock Units (RSUs) [member] | Maximum [member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting Percentage	33.00%
Amended and Restated 2016 Stock Incentive Plan [Member] | Restricted Stock Units (RSUs) [member] | Minimum [member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting Percentage	25.00%

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Stock-Based Compensation - Schedule of Fair Value of Stock Options Granted with Weighted Average Assumptions of Black-Scholes and Monte Carlo Option-Pricing Models (Detail) - $ / shares	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted-average estimated fair value of options granted during the year	$ 0
Employee Stock Option [member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate	0.00%	1.95%	2.48%
Expected volatility	0.00%	39.21%	41.52%
Expected life (in years)		10 years	10 years
Weighted-average estimated fair value of options granted during the year	$ 0	$ 2.91	$ 13.47

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Leases - Additional Information (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Lessee, Lease, Description [Line Items]
Weighted-average discount rate	6.00%	9.00%
Weighted-average remaining lease term	12 years	12 years
Lease term option to extend description	options to extend the leases for up to 5 years
Lease term option to terminate description	options to terminate the leases within one year.
Finance lease liability	$ 0
Operating lease costs	$ 10,348	$ 6,748
Operating leases rent expense			$ 4,354
Lease Agreements [Member]
Lessee, Lease, Description [Line Items]
Weighted-average discount rate	5.10%
Weighted-average remaining lease term	3 years
Operating lease costs	$ 1,071
Minimum [Member]
Lessee, Lease, Description [Line Items]
Operaing lease remaining lease term	1 year
Maximum [Member]
Lessee, Lease, Description [Line Items]
Operaing lease remaining lease term	15 years

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Leases - Schedule of cash flow information related to leases (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating lease payments	$ 10,348	$ 6,748

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Leases - Schedule of lessee, operating lease, liability, maturity (Detail) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Leases [Abstract]
2021	$ 8,650
2022	6,026
2023	4,930
2024	4,276
2025	4,331
2026 and thereafter	18,331
Total remaining lease payments	46,544
Less imputed interest	(9,259)
Total operating lease liabilities:	37,285
Current operating lease liability	8,591	$ 6,498
Non-current operating lease liability	$ 28,694	$ 34,469

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Leases - Schedule of balance sheet information related to lease agreements (Detail) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Assets and Liabilities, Lessee [Abstract]
Operating lease right-of-use assets	$ 36,239	$ 41,638
Current lease liabilities	8,591	6,498
Non-current lease liabilities	28,694	$ 34,469
Total operating lease liabilities:	37,285
Lease Agreements [Member]
Assets and Liabilities, Lessee [Abstract]
Operating lease right-of-use assets	692
Current lease liabilities	378
Non-current lease liabilities	341
Total operating lease liabilities:	$ 719

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Valuation and Qualifying Accounts - Schedule of Changes in Valuation and Qualifying Accounts (Detail) - Allowance for Doubtful Accounts [member] - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items]
Balance, beginning of year	$ 3,205	$ 2,065	$ 3,164
Charges to earnings	12,270	4,294	1,062
Charges to other accounts	2,689	(104)	(1,098)
Deductions	(7,369)	(3,050)	(1,063)
Balance, end of year	$ 10,795	$ 3,205	$ 2,065