Travelzoo notches sluggish growth, pins hopes on hotels

Deal-site Travelzoo’s largest business region is North America, where the company is feeling pressure as it continues to develop a hotel-booking platform.

The company released its first quarter results today, and its operating profit in North America fell 22.5% to $5.5 million on a sluggish revenue increase of 5% to $30.2 million.

“The decrease in operating profit was a result of increased expenses related to sales force expansion, hotel booking platform development, traffic acquisition and subscriber marketing,” Travelzoo stated about its North America business.

Travelzoo’s Groupon-like Local Deals business has lost some of its luster over the past year, and the company acquired Perfect Escapes in 2012 as the basis for its first foray into hotel transactions.

Chris Loughlin, Travelzoo’s CEO, stated today: “We continue to develop our new hotel booking platform, which we plan to roll out later this year.”

Travelzoo’s combined first quarter net income for North America and Europe increased 49% year over year to $5.6 million as revenue climbed 7% to $42.2 million.

Looking at its results in Europe, Travelzoo’s operating profit there was flat, increasing from $2.4 million in the first quarter of 2012 to $2.5 million in the first quarter of 2013.