Travelzoo reveals cost of adding new subscribers

Travelzoo has spent around $3 per new subscriber in the first three months of 2009, a fall of around 10% on the previous period.

In the first three months of 2009, it picked up 295,000 new subscribers in Europe at an average cost of $3.09, reaching 2.5 million unduplicated users.

In the last three months of 2008, 160,000 new registrants cost an average $3.32.

Chris Loughlin, executive vice president for Europe, told Travolution that he was confident this trend would continue.

“2.5 million out of 200 million households in Europe means there is still room to grow,” he said.

“Media prices have come down in France and Germany, which has helped, but we’re seeing a significant number of people coming directly to the site and signing up on the home page.”

The drive for more users is Travelzoo’s short-term plan. Chief executive Holger Bartel told analysts on the Q1 09 earnings call: “We have found audience growth to be a key driver of future revenues and profits.”

It is also on track to develop its recently launched vertical search brand fly.com. Bartel said that the beta version of the site, which went live in the US in February, has already handled 1m searches, although the revenues are “very insignificant”.

He explained: “Fly.com is really an opportunity to link it up with Travelzoo to showcase deals on the fly.com website. It will also allow us to make the deal content on Travelzoo better. That’s the main strategy.

Loughlin said that the site would be part of his brief as executive VP Europe and would go live in the region this year. “We’re working with the US on developing the European site. Europe is more fragmented in terms of airline inventory.”

He added: “I’d like fly.com to launch in summer but I’m not under a great deal of pressure to get the product to market, the pressure is to deliver a quality product.”

The last week of March 09 was Travelzoo’s busiest week in terms of UK traffic, while a recent Top 20 newsletter had generated half a million click-throughs in the UK alone.

Loughlin also revealed that Travelzoo in the UK had launched a destination of the week channel to its web site as well as tickets for West End shows. “We went under the radar with these and response so far is good.”

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