What To Watch For In Travelzoo’s Q1 2017 Earnings?

by Trefis Team
+7.31%
Upside
6.30
Market
6.76
Trefis
TZOO
Travelzoo
Rate   |   votes   |   Share

Though Travelzoo’s revenues declined by ~9% to around $129 million in 2016, the company is taking all the right steps for its long term growth. The company’s profitability showed significant improvement with its operating profits growing by almost 55% to $11 million. The erosion of its top line was mainly due to its planned reduction in the local search and syndication revenues and the negative impact of foreign currency fluctuations. Travelzoo is emphasizing the growth of its membership base (which currently stands at around 29 million) and improving its products and services. Also, after gradually ramping down its Search and Local Deals business for the last couple of years, this year Travelzoo finally took the decision to sell off its metasearch domain, Fly.com. Travelzoo’s revenues are expected to keep declining even in Q1 2017 on account of the company’s ongoing transition in several of its offerings such as local deals, getaways, and search.

Travelzoo’s Selling Off Of Fly.com

A few days back, Travelzoo made the decision to sell off its metasearch engine domain, Fly.com, to an anonymous buyer. After buying the Fly.com domain in 2009, Travelzoo initially launched a metasearch for flights on the domain and later added hotel search to it. Though Travelzoo thought of competing with prominent metasearch companies such as Kayak and Skyscanner with the help of its Fly.com, the search model didn’t meet with resounding success as was expected in the beginning. Also, while Priceline bought Kayak in 2012 and strengthened it further, Travelzoo itself started concentrating more on its hotel booking platform. As a result the marketing spend on arms such as Fly.com automatically were reduced. Travelzoo’s search revenues declined from $23 million in 2013 to $14 million in 2016 and the monthly searches on Fly.com fell by 50% between 2013 to 2016.

What Are Travelzoo’s Current Areas Of Interest? 

  • Travelzoo is currently aiming at improving and personalizing its products and services with an aim to boost its revenues per members (that has been on a decline over the last three years). It is also trying to expand its mode of communications with its members beyond emails through social media channels such as Facebook in Europe and North America, WeChat in China, etc.
  • Over the next few months, Travelzoo’s new website which is currently in the U.S. will be rolled out to the rest of the world. Along with allowing users to search for deals on their chosen dates, the new website is supposed to include more exclusive offers for hotels, vacation packages, cruises, and local entertainment.
  • Travelzoo is also strengthening its hotel platform with enhanced functionalities such as date specific searches. The number of hotels on the hotel booking platform has also been doubled y-o-y.
  • The company is specifically looking into the Asia Pacific market for further growth opportunities and towards this end it has increased investments in the region.

Notes:

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 content@trefis.com
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

See More at Trefis | View Interactive Institutional Research (Powered by Trefis)

Get Trefis Technology

Rate   |   votes   |   Share

Comments

Name (Required)
Email (Required, but never displayed)
Be the first to comment!