Travelzoo’s Q2 2017 Earnings Preview

July 25th, 2017 by Trefis Team
-23.71%
Downside
8.94
Market
6.82
Trefis
TZOO: Travelzoo logo
TZOO
Travelzoo

Travelzoo is slated to release its Q2 2017 earnings on July 27th. The company witnessed a disappointing Q1 and has not yet managed to grow its top line which has been declining since the introduction of its hotel booking platform in 2014. However, the company’s Global CEO and Chairman, Holger Bartel, had chalked out a growth plan to revive the company’s performance in the near future.

The Platform Will Be Enhanced Further And Investment Towards That Will Dampen Short Term Growth

The short term growth plan includes expansion of offerings on the Travelzoo platform. The membership perks will also be made more attractive to lure more subscribers. New features, such as members being able to book deals from around the world and global hotel suppliers adding deals on the platform more easily, will help both the demand and the supply side. The mobile application is being made more personalized with a special focus on China where mobile adoption is ahead of other nations. Travelzoo’s new website which is currently in the U.S. is being 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. Due to these investments, the management expects the company’s profits to be limited in the short run.

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Travelzoo’s Fly.com Sell-Off Might Help In Streamlining Its Services Thus Helping the Hotel Platform’s Growth

Travelzoo had sold off its domain, Fly.com, earlier this year, receiving around $2.9 million cash in return. The domain which Travelzoo used as its own metaserach option was finding it difficult to compete with bigger metaserach engines in the marketplace, such as Kayak in North America and Skyscanner in Europe. Selling it might have been a good decision on the part of the company as it can better focus on its core hotel booking model and also avoid customer’s getting distracted by its other functionalities. Though Travelzoo still has search and local deal options on its platform, their importance and contribution to revenues will continue to decline over time as the hotel booking option keeps taking precedence.

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such 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

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