Travelzoo ups marketing, two pillar strategy continues
Travelzoo says it expects to increase investment in marketing and member acquisition by up to $3 million year-on-year.
Reporting a 9% decrease to revenue of $36.5 million for the quarter ended March 31, 2015, the deals publisher says it expects to invest $1 million more quarter-on-quarter depending on the performance of the business.
The quarterly decline in revenue is because of the decrease in local deals and Getaways according to Travelzoo.
The US-based company is continuing with its two-pillar strategy of increasing its audience, particularly members and, enhancing its products.
Travelzoo relaunched its Hotel Booking Platform at the end of February, focusing on destinations such as New York and Chicago, and says it is now running more deals via the system as opposed to its former models.
The idea is to not only promote deals but also be able to offers users something when they search for a hotel on a particular date or destination.
Executive chairman Holger Bartel says the functionality has not yet been promoted and the company continues to tweak the service and add more content.
So far the booking platform is only available in the US and is not on the home page yet.
The ongoing product development as well as increased marketing investment means the company expects to continue to generate lower operating income year-on-year and “potentially operating losses.”
Operating profit for the quarter was $3.8 million while income stood at $1.9 million.
In North America, the company saw revenue decrease 6% year-over-year to $24.7 million while operating income for the quarter was $2.1 down from $4.6 million.
Revenue for the European side of the business also saw a decline of 15% year-on-year to $11.8 million.
On recent consolidation in online travel, Bartel believes it’s “probably a good thing” for Travelzoo because it leaves two massive players.
“They basically in essence compare their own products against other Web sites that they own themselves. So you really have massive concentration there and I think when we speak with the hotels, they are quite relieved to have some additional players in this space. And we are one of the remaining independent players here. And I think right now that’s a good position to be in.”
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