Travelzoo in major Europe subscriber push

Deals publisher Travelzoo has earmarked the bulk of its marketing budget for the rest of the year to increasing subscriber numbers in continental Europe as the business moves out of start-up phase.

Chris Loughlin, executive vice president for Europe, told Travolution that there would “be a number of significant announcements” over the next three months  about its business on mainland Europe.

Currently, Travelzoo’s ‘Top 20’ email alert has 330,000 subscribers in Germany, more than 500,000 in France and 50,000 in Spain.

Earlier this month it announced that it had signed up its one millionth subscriber in the UK.

Loughlin said:  “Obviously we want to increase this, but we won’t be as aggressive in the UK this year as we plan to be in Europe.”

He added that in July the UK is still picking up an average of 925 new subscribers a day, the bulk of whom sign up on the home page. “But the growth rates in Europe are three times this,” he added.

A study of 1,800 UK subscribers this June found that more than one-third had booked a travel offer featured in the newsletter. Travelzoo UK is also attracting older and wealthier subscribers.

The percentage of subscribers over 55 is now 34%, up from 24% in 2006 while subscriber households with incomes of £80,000+ increased from 6% to 11%.

Loughlin was confident that the business would thrive during the current economic climate, and pointed to a 8% increase in group-wide Q2 revenues, reported last week.

However, ongoing expansion costs in Europe, particularly France, along with the launch if its Asia Pacific operations, pushed Travelzoo into the red. Q2 08 net losses came in at $1.2 million against a gain of $2.8 million in Q2 07.

He also revealed that advertisers were using Travelzoo to generate forward bookings as far ahead as Jan/Feb09. “Suppliers can stimulate forward bookings using our products,” said, “We rarely see advertisers users the Top 20 for last-minute offers.”

Referring to case studies, he revealed that an airline recently picked up £500,000-worth of bookings from a Travelzoo campaign, while a recently-opened five-star hotel in Italy generated room night revenue of $100,000 from a single, multi-language promotion.  “We have a big advantage over our so-called competitors by being able to offer suppliers a global campaign,” he said.

Travelzoo chief executive Ralph Bartels told analysts that the business was planning to launch a vertical search product during the year. Loughlin confirmed that this tool will be seen in Europe as well as the US.

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