Deal publisher Travelzoo has reported a £500,000 operating profit from its UK operations in the first three months of the year, with UK subscriber numbers reaching 1.8m.
Last year, the UK operation recorded its first ever full-year operating profit with a gain of £300,000.
The business continues to focus on growing its audience, both in the US and internationally. CEO Holger Bartel explained to Wall Street analysts on Travelzoo’s earnings call: “Over time the increase in subscribers drives revenues, and revenue growth ultimately drives operating income.”
The UK’s £500,000 operating profit came from revenues of £2.4m, giving it an operating margin of 23%. In the same quarter last year, the margin was 10%.
Operating losses from its other European business are being reduced as subscriber numbers increase. Germany was Travelzoo’s second European point of sale.
Its Q1 2010 revenue growth was 153% with expenses ahead by 43%.
Travelzoo continues to invest in fly.com, its flight metasearch product launched a year ago in the US and more recently in the UK. Chris Loughlin, executive VP for Europe, said: “We ran some tests recently in Europe and we now feel that [fly.com is] the fastest amongst the four incumbents.”
Loughlin was also optimistic about the overall travel market moving forward. “I was at a conference in London last week and the outlook certainly seems to be stronger than last year.”
As well as growing its international business and fly.com, Travelzoo’s other identified growth strategy is to ramp up its entertainment product offering to sit alongside its traditional travel content.
Loughlin said of Europe: “We have a team based in London who are building out that business, so it is predominantly UK-based. It includes London, Edinburgh, Belfast and one of the greater successes we had in the first quarter was in Manchester area.”