28 Apr 2017

Travelzoo begins works on loyalty scheme and personalisation

Holger Bartel, CEO of deals publisher Travelzoo, has prioritised giving its 29 million members more exclusive offers and a loyalty scheme after a disappointing start to the financial year.

For the first three months of 2017, Travelzoo’s revenue was down in all three regions it operates in: North America revenues of $17.7 million were down 3% on the same period on last year – Europe generated $9.1 million, down 15% in dollar terms with APAC’s $1.8 million a 20% drop.

Combined, its revenues for the quarter of $28.4 million are down 5% in constant currencies.

Bartel acknowledged that he was “disappointed” with the results and outlined some ideas to help the business recover, with  top-line revenue growth predicted to return in Q4 2017 or Q1 2018.

The results come a few weeks after Travelzoo said it was “discontinuing” its Fly.com and SuperSearch businesses in order to focus on the core Travelzoo brand. It also revealed that it had sold the Fly.com domain name to a third party.

While the buyer remains unknown, the Q1s revealed that the sale raised just under $2.9 million, under the “Cash flows from investing activities/proceeds from sale of Fly.com domain name” reporting line.

Travelzoo bought the fly.com domain name for $1.8 million in 2009.

With the business now focussed around members, the numbers here are heading in the right direction, just. At the end of March 17 it had 29.1 million members – at the same stage last year it had 28.7 million. The lift has come from APAC (up 2% to 3.6 million) and Europe (up 3% to 8.3 million). North America is flat at 17.3 million.

However, on the call with analysts, Bartel suggested that it is adding more new members than the numbers suggest because they also include the removal of  defunct or dormant email addresses.

Bartel’s plans for the business include ramping up the exclusive offers for its members, with “partnerships or acquisitions” in the vacation package sector specifically targetted. It has also started working on a loyalty programme and is testing personalized alerts. “Country silos will be broken down” so that any negotiated deal will be available to any member.

It intends to use the enhanced member benefits in its marketing initiatives. “We have lost a bit of visibility over the past few years,” he said, “but visibility doesn’t mean spending millions of dollars on TV ads – we have some smart ideas on how to increase our visibility and drive member  growth.”

Related reading from Tnooz:
Travelzoo sells fly.com domain name and discontinues search (April17)

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