Key Takeaways From Travelzoo’s Q4 2016 Earnings

by Trefis Team
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Travelzoo’s fourth quarter earnings declined by 9% y-o-y to $29.3 million. The decline was mainly driven by the planned reduction in the local search and syndication revenues and the negative impact of foreign currency fluctuations. However, the company’s profitability improved on account of efficient management of operating costs. As a result, its operating profit for the quarter increased by ~98% y-o-y to reach $1.9 million. The earnings per share for Q4 2016 was $0.07 which was around $0.04 higher than Q4 2015. The company ended the quarter with a strong cash position of $6.8 million, even after making continuous stock repurchases. The company’s current growth strategy revolves around building its membership base, which currently stands at around 28.8 million, and enhancing its products and services for a better user experience, such as not only offering members deals through emails and social media but also helping members with their specific searches for accommodations on a particular date or packaged travels for a certain month.

The management expects the declining revenue trend to persist in Q1 2017 on account of the company’s ongoing transition in several of its offerings such as local deals, getaways, and search. The company will continue with its investments towards capturing more members and towards its business in the Asia Pacific with a focus on China. Travelzoo was erstwhile known for its supply or push-based offerings, however, now the company is trying to transform primarily into a provider of demand or pull based services. After the introduction of its hotel booking platform, it is focusing on its travel related services that over time are expected to contribute to a higher portion of the company’s revenues. The local deals and search related services’ contribution to revenue will continue declining over time.

Current Focus Areas For Travelzoo

  • The company aims to boost its revenues per members (that has been on a decline over the last three years) through improved products and services. The products and services are being made more mobile friendly and easier to use. Also, the company is trying to communicate with its members beyond emails through social media channels such as Facebook in Europe and North America, WeChat in China, etc. Travelzoo is also personalizing deals to suit the preference of individual members.

  • Travelzoo is concentrating on its Asia Pacific business with greater investments as it believes that there is a great opportunity for growth in the region.
  • The new website launch that has been completed in the US, will be rolled out across the globe over the next few months. The website will let users search for specific deals for particular dates, and there will be an increased number of exclusive offers for hotels, vacation packages, cruises, and local entertainment.
  • The search results for the hotel platform is being improved with functionalities such as date specific searches. The number of hotels on the hotel booking platform has also been doubled y-o-y.

Have more questions about Travelzoo? See the links below.


1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Travelzoo

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