Travelzoo is a curious case. A newsletter-focused daily deals site that has given up on becoming a global metasearch site, it has clearly had trouble adapting to a marketplace where deals abound. Has a new focus on what its customers actually want come too late?
As the overall online daily deals mania has subsided in tandem with an improved global economy, booking sites which made their name in the discount space have languished.
One of those sites, Travelzoo, is trying to get smarter about what its nearly 30 million subscribers actually want, but seems to be having a tough time figuring it out. After selling off its Fly.com domain earlier this year and shuttering its search product, Travelzoo is living a life after search.
The company posted a 9 percent year-over-year decrease in revenue in its third quarter this year, down to $24.7 million, and a net loss of $576,000. Its Asia-Pacific operations have decline precipitously, with a 31 percent year-over-year decrease in revenue down to just $1.8 million. Just two years ago, it reacquired its Asia-Pacific business for $22.6 million.
The company’s stock dipped to its lowest price in the last three years following the earnings announcement.
For now, Travelzoo is looking to make its membership more valuable to its users. How it will do so is unclear. Subscriber growth has leveled off in recent years, with 29.5 million members in the third quarter of 2017, up from 28 million in mid-2016.
“In marketing, we need to create more visibility for the Travelzoo brand, and better and more actively communicate the benefits of Travelzoo membership to both existing as well as prospective members,” said global CEO Holger Bartel on the company’s third quarter earnings call last week. “We’ve also begun to lay the groundwork for our loyalty program, with the goal of motivating our members to shift their usage to Travelzoo and to use us more frequently.”
Bartel chocked up the weak quarter to weather-related disruptions across North America, which forced the company to pull deals across the month of September. Travelzoo also switched up the management in its flagging Asia-Pacific division, hoping to enable a turnaround in 2018.
Travelzoo has worked to develop new technology tools that will allow the company to better understand and target its members. These new tools should be operational within the next six months, according to Bartel.
“One of the key benefits actually is in the area of member acquisition because we will learn what our members are doing, what type of members, what type of geographics, what type of demographics are going after certain offers,” said Bartel. “And until this is in place, we are slowing down a little bit in North America with new member acquisition.”
Photo credit: Travelzoo's board. After another tepid earnings release, the company is looking to dive deeper into the wants of its existing users. Travelzoo