Would The Growth Strategies Finally Reap Benefits In The Third Quarter For Travelzoo?

Travelzoo is slated to release its Q3 2017 earnings on October 26th. The company has been struggling with its performance for almost three years now and it is high time for Travelzoo to show some improvement in its performance. In its Q2 2017 results, though there were signs of improvement in the operations in America, the overall revenue growth for the company still remained elusive. Its half yearly performance for 2017 was far from impressive. While its revenues declined by 10% y-o-y to $54.8 million during the first half of 2017, its earnings per share from continued operations declined by ~ 54% to $0.12. Travelzoo’s introduction of a hotel booking platform in 2014, and subsequently attempting to make it the focus of its business while gradually reducing the stress on the local deals and search segments, seems to have still not worked well enough for the company.

But Travelzoo is trying its best to recover from its weak situation. It reacquired its Asia Pacific business and put a special focus on China, whose tourism industry is one of the most lucrative in the world today. Next, it hired region specific managers in the Asia Pacific markets, introduced new mobile applications in China, and took measures like expanded offerings, better member perks etc. In its second quarter call, the management talked about the formulation of a growth path that is expected to show some recovery over the next six to twelve months. The company is also on the lookout for targets whose acquisition can help in its growth. The company currently has a ~29 million member base and its curated holiday packages are an attraction to a lot of people. Travelzoo really needs to turn around its performance in order to avoid itself getting acquired by a bigger player.

Growth Strategies Which Are Expected To Improve Its Performance Over The Next 6 to 12 Months

The growth strategies formulated by the management include: expanded offerings and exclusive perks to memberships; introduction of 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; expansion of packaged vacation offerings; looking for acquisition targets; and the launch of an updated mobile application that will be initially launched in the China market. We hope Travelzoo’s Q3 results show some tangible improvement by following some of the strategies mentioned above.

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