Travelzoo Announces Major Management Shuffles

Travelzoo (NASDAQ:TZOO) has announced a few changes in its top level management. The most important change is the appointment of Holger Bartel as the global CEO of the company. Holger, who is the brother of Travelzoo’s founder Ralph Bartel, will assume this newly created position in 2016. Post its weak performance in 2014, Travelzoo is finally making a gradual recovery. In 2015, its refurbished hotel booking platform witnessed improved demand and Travelzoo reacquired its Asia Pacific business recently to expand the reach of the hotel platform. Travelzoo appointed Vivian Young as the president of its Asia Pacific business, effective January 1, 2016. In its local deals division, Travelzoo is trying to introduce more demand-based live deals and phase-out its rigid voucher format. Along with all these changes the company might be embarking on a change in its leadership in order to better follow its new strategies.

Travelzoo Will Get A Global CEO In 2016

Travelzoo’s CEO Chris Loughlin resigned recently and its chairman Holger Bartel will assume the position of the global CEO, effective January 1, 2016. Holger Bartel had been the CEO of Travelzoo between 2008 and 2010. Loughlin had been associated with Travelzoo in various positions since 2001 and had assumed the role of Travelzoo’s CEO since July 2010. ^[1]

Possible Reasons For The CEO Change

• Changes In The Company’s Focus: Currently, Travelzoo has a 27 million member base for its deals newsletter. However, Travelzoo has been struggling with its local deals and search segments lately. Also, the company tried making a significant shift in its business model with the pull-based hotel booking platform (launched in 2014) and only recently did the platform show some significant signs of traction. In August, Travelzoo repurchased its Asian business to further expand the hotel platform’s reach. Maybe the company felt that the new initiatives called for a management overhaul and hence the change in leadership.
• Declining Demand For The Local Deals Vouchers: Mr. Loughlin had been instrumental in taking the company into the local deals market and consequently, under his initiative, voucher sales became a popular aspect of the company. ^[2] However, Travelzoo’s local deals division had been suffering lately. The local segment witnessed a 22% decline in revenues to around $22 million in 2014. The decline continued in 2015 where the revenues from this segment fell by 17% to around $12 million.The company had noticed a change in consumer preference in this segment towards pull or demand based products, over push or supply based products. Currently, Travelzoo is increasing the number of live deals on its platform and focusing on products that will facilitate users to find deals closer to their locations. The company is also trying to scrape off the rigid voucher format of its deals. Travelzoo had recently witnessed an increase in pull-based purchases as a percentage of total deals on a year-on-year basis.

• Lack Of Autonomy: According to Skift, the reason for Loughlin’s resignation might be the lack of freedom to perform his functions, as founder Ralph Bartel allegedly makes the important decisions for the company. Ralph Bartel is currently the chief talent officer at Travelzoo. ^[2]

Other Changes In Management

Other management changes were announced by the company, as well. Mike Stitt had been announced the president of Travelzoo North America, effective immediately. Till recently, Stitt oversaw Travelzoo’s entertainment and local deals along with its publishing and product planning.

Vivian Hong, who currently heads operations in Travelzoo China, Hong Kong, and Taiwan will be the president of Travelzoo Asia Pacific, effective January 1, 2016. Hence, along with the aforementioned regions, Australia, Japan, and Southeast Asia will be added to Hong’s set of responsibilities. Travelzoo’s newly reacquired Asia Pacific business would require an operational head and we believe this was a logical step by the company.

Recent Changes In Travelzoo’s Focus

Travel: The Company Is Finally Gaining Customers For The New Platform

Travelzoo’s hotel booking platform allows travelers to book full priced hotels and hence Travelzoo is slowly gaining the stature of a regular OTA, thus evolving from being solely a seller of discounted travel and entertainment deals. The platform received a lukewarm response in 2014, but the company made a fresh attempt to relaunch the hotel booking platform at the end of February 2015, with newer content pertaining to six destinations including New York, Las Vegas, and Chicago. ^[3] Travelzoo finally started gaining traction, post these new initiatives. The hotel search, and searching for deals for specific dates, have witnessed significant growth on the platform. The company will attempt to roll-out the hotel platform on a global scale in the near future.

Search: Increased Monetization Of Search Traffic Has Been Observed, Lately

Travelzoo’s search division performed poorly in 2014, on account of intense competition in this field and the company’s delay in investing in the search segment. Search revenue declined by 25% year on year to ~$18 million in 2014. ^{[4] [5]}

However, in 2015, Search has finally started picking up. For the first half of 2015, revenues in the search segment increased by around 2% to almost $9.5 million. ^[6] The management had increased spend on Search products i.e., SuperSearch and Fly.com, post the performance improvement in Q1 2015. The company is currently observing better monetization of its Search traffic.

In August, Travelzoo added Beatrice Tarka, the CEO and founder of travel search engine platform, Mobissimo, onto its board of directors. ^[7] Though Travelzoo refused to draw any connection between Travelzoo and Mobissimo’s relationship due to this inclusion, there might be a possibility that Travelzoo is looking for the further bolstering of its Search segment.

View Interactive Institutional Research (Powered by Trefis):

Global Large Cap | U.S. Mid & Small Cap | European Large & Mid Cap
More Trefis Research

1. Travelzoo Press Release, October 1, 2015 [↩]
2. Travelzoo CEO Steps Down and Chairman Assumes Role, Skift, October 1, 2015 [↩] [↩]
3. Travelzoo’s Q1 2015 Earnings Call Transcript, Seeking Alpha, April 16, 2015 [↩]
4. Travelzoo Form 10-K [↩]
5. Travelzoo Reports Fourth Quarter 2014 Results , Travelzoo, January 2015 [↩]
6. Travelzoo Form 10-Q for the period ending June 30, 2015 [↩]
7. Travelzoo Reacquires Its Asia-Pacific Business From Founder for $22.6 Million, Skift, August 26, 2015 [↩]