How Is Travelzoo Performing And What Are The Chances Of It Being Acquired By A Bigger Entity?

Even after three years of launching its hotel booking platform, Travelzoo seems to be struggling with its growth. Though operations in America seem to be showing some signs of growth as was witnessed in its Q2 2017 earnings, the actual revenue growth still remains to be seen for the company. In the first half of 2017, the overall company revenue declined by 10% y-o-y to $54.8 million and its earnings per share from continued operations declined by ~ 54% to $0.12. Earlier, Travelzoo has tried recovering from its slump by reacquiring its Asia Pacific business and putting a special focus on China, whose tourism industry is one of the most lucrative in the world today. It has gone further into hiring region specific managers in the Asia Pacific markets, introducing new mobile applications in China, as well as taking global measures such as expanded offerings, better member perks etc. The management has chalked out a growth path that, it says, might show some recovery over the next six to twelve months. The company is open to acquiring entities to grow itself, as well. However, given its overall performance trend, it seems that Travelzoo seriously needs a revamp in its performance graph soon in order to avoid itself getting acquired by a bigger entity.

What Are The Chances Of Travelzoo Being Acquired?

OTA leaders such as Priceline, Expedia, and Ctrip are ever ready to acquire smaller entities and to grow them further along with expanding their own offerings and market shares. Expedia is currently the undisputed OTA leader in North America and a lot of it has to do with its big ticket acquisitions such as HomeAway, Orbitz Worldwide, and Travelocity. Ctrip on the other hand regularly acquires companies that can help it either in increasing its footprints in the domestic China market or in the international arena. Though Priceline is the biggest OTA entity in the world now, its acquisition strategy seems to be more restrained than the other two companies. However, all these entities are well equipped to acquire a much smaller entity like Travelzoo.

Travelzoo currently has a ~29 million member base and its curated holiday packages are an attraction to a lot of people. Hence, acquiring a company like Travelzoo and then marketing its services more attractively might work well for the leading OTAs.

Notes:

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

Get Trefis Technology