One can make the argument that Travelzoo is embarked on a foolhardy mission to create a metaverse. On the other hand, gamers and Gen Z may have something to the contrary to say about that.
Travelzoo’s vaguely defined pitch about its metaverse is that will be a digital travel experiences platform. More details are tightly guarded at the moment.
The launch of Travelzoo META is one of Travelzoo management’s main priorities, along with upping its membership, which didn’t increase in 2022, and revenue growth; generating higher operating margins to “significantly increase” earnings per share, and expanding subscription revenue from its Jack’s Flight Club airline deals newsletter, according to a fourth quarter and full-year 2022 investor presentation.
Arveena Ahluwalia, general manager, Travelzoo META, said during a 25-minute fourth quarter earnings call Wednesday that she would only provide a “super quick” update “since the team is pretty busy with the launch of Phase 1 of Travelzoo META in the coming weeks.”
In fact, there was no update at all other than the “in the coming weeks” timeframe for the launch, and a marketing tease in the investor presentation in the form of 10 images of “the first look” at Travelzoo META.
Travelzoo’s metaverse, initially had a target launch date for September 2022. The company said previously that it started testing it in May 2022, and its metaverse was billed to “be browser-enabled entertaining travel experiences that allow members to interact with, and in, the metaverse.” The company touted it as a way to attract new subscribers to Travelzoo’s deals publications, and to bring in younger customers.
Travelzoo negotiates deals with airlines, hotels and tour operators when the lack substantial reservations, and passes them along to consumers at a profit.
Ahluwalia said in October that the Travelzoo META would be a subscription product. “Given our attempt to be the first mover in providing travel experiences in the Metaverse, please understand at this time, we can only provide limited information,” Ahluwalia said.
In other developments, Travelzoo reported that it in the fourth quarter it saw strength in the U.S., where its operating margin was 29 percent. North America revenue grew 53 percent to $13.1 million, and Europe revenue expanded 9 percent to $4.7 million. Travelzoo exited Asia Pacific in March 2020 and has a licensing deal there.
The company generated $2.4 million in net income in the fourth quarter of 2022 compared with a loss of $3.2 million a year earlier. Revenue climbed 36 percent to $18.6 million. Officials said they were able to cut overhead in an enduring manner during the pandemic.
CEO Holger Bartel expressed optimism about 2023 because tougher economic times present opportunities for Travelzoo to secure greater discounts from suppliers.
“So in general, as you see in Q4 and now again in Q1, it’s become easier for us to negotiate offers for our members that of course, resulting in more activity by our members and also advertisers are back much stronger than last year because there’s more confidence in travel,” Bartel said. “And while we have high inflation everywhere and possibly recessions coming, travel is one of the areas where consumers don’t want to give up on it. They just want to do more for less, and they are looking for better deals.”
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