Digital Booking Sites

Travelzoo’s profit falls but it’s bullish on hotel booking boost


Jan 24, 2013 2:05 pm

Skift Take

Travelzoo has a relatively large customer base, and should be able make hotel bookings more solid than daily deals.

— Dennis Schaal

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Travelzoo bought the assets of Perfect Escapes last year and is turning them into a Travelzoo hotel-booking engine.

Deal-publisher Travelzoo saw its profits fall in the fourth quarter and indicated it hopes to integrate a hotel-booking engine from Perfect Escapes within about six months.

The company’s stock was hot during the daily deals bubble, but has seen considerable cooling over the last year. However, the stock price was up nearly 25% today, and was trading around $23.93 this afternoon.

The company posted net income of nearly $3.8 million for the fourth quarter and that was a 41.5% decline from a year ago.

Travelzoo stated that it is focusing on expanding its reach and sales force, along with product development, and along those lines its sales and marketing costs for the quarter climbed 32.8% to nearly $18.5 million.

Revenue for the quarter rose 5.3% to $37 million.

On the product development side, in addition to focusing on mobile, CEO Chris Loughlin said Travelzoo is overhauling the assets it bought from Perfect Escapes last year,and will integrate them to offer online hotel-booking capabilities on Travelzoo websites.

In the past, Travelzoo has referred customers to advertisers’ websites, sold vouchers on its own, but hasn’t processed online hotel transactions itself.

There won’t be any revenue from integrating the hotel-booking engine until the third or fourth quarter of 2013, Loughlin told analysts.

In other developments, Travelzoo, which is known for its email marketing efforts, added some 240,000 Facebook fans during the quarter, and Loughlin said the acquisition costs were lower than anticipated.

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