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Travelzoo CEO Chris Loughlin, Bashes Daily Deal Industry Dynamics

Travelzoo’s Release of the Company’s Q1 2012 Earning Results in CEO Chris Loughlin Pointing the Finger at Daily Deal site Industry Practices

travelzoo, tzoo, for sale, travel deals, daily deal mediaAs Travelzoo released their quarterly results this week, CEO Chris Loughlin, came down hard on the deal industry essentially blaming daily deal sites, which he clarifies that Travelzoo technically is not, for unsustainable practices obstructing the advancement of others in the space. In discussion of the company’s Q1 2012 results, Loughlin stated that the industry at large is “hindered in the short term by industry dynamics.” Furthermore, Loughlin stresses Travelzoo is “the only company (within the deal arena) which is serious about making profits,” of which he explained the company’s long term goals will be met and profits will be obtained as previously predicted. 

Travelzoo’s Q1 2012 Earnings

Loughlin’s blunt accusations, come on the tail of recent mass-publicized sales rumors although no official statement has been made either confirming or denying these claims. All in all Travelzoo’s earnings released this week were not all bad:

First Quarter 2012 Financial Highlights:

  • Revenue of $39.3 million, up 6% year-over-year
  • Non-GAAP net income of $6.7 million, up 12% year-over-year
  • Non-GAAP earnings per share of $0.42, compared to $0.37 in the prior-year period and a penny above Street expectations
  • GAAP net income of $3.7 million; GAAP earnings per share of $0.23
  • Cash flow from operations of $9.8 million
  • Newsletter subscriptions came in at 21.8 million, an increase of 9%
Travelzoo immediately emphasized that industry dynamics are at place when it comes to the actual numbers:
“Merchants are paid quickly, sometimes with 100% up-front payment, leaving refund risks with the publisher … (There is an) industry loss in excess of $1 billion in 2011 to drive unprofitable revenue.”
The company blamed competitors for operating in ways which they will work to obtain “subscriber acquisition at almost any cost.” The cost of course, is the harm done to others in and the industry itself. 

The New Travelzoo with Chris Loughlin’s Solution

Travelzoo will now strive for a more profitable approach strictly focusing on “productivity and profitability” in the deal area of their business. Overall Loughlin predicts that the company’s new focus will help them to profit, unlike others, in the longrun from an industry slump that was already looming in the future. Details of this new approach include publishing the best, most profitable deals to all involved, employing only quality mid-level managers, pumping more life into their sales force, smartly accelerating subscriber acquisition and mobile syndication. These tactics are expected to increase profits in Travelzoo’s Local Deals, Travel and Search sectors.

Loughlin did tactically address a popular issues arising in talk of the industry very recently deal, of a possible problem in the mobile sector. He explained it is well known that Travelzoo may lack in the mobile arena, much like their competitors, however it has not yet been a focus of the company, which will change in the future. 

More on Travelzoo’s Q1 2012 

Source: Tzoon.com

Kara Kamenec

Kara Kamenec is the Web Content Manager at Daily Deal Media. Kara is a Michigan State University graduate with a B.A. in Media Arts and Technology, specializing in Games, Web and Interactive Media. Kara has successfully worked in the digital media sector, focusing in social media, mobile and Internet marketing as well as web site and graphic design. Kara enjoys traveling, photography and apple products and is a member of Social Media Club - Detroit. Connect: @KaraKamenec
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