Travelzoo’s Chris Loughlin this week started as the company’s chief executive in New York. Here to talks to Lee Hayhurst about deals, conversion rates and entrepreneurial flair
Travelzoo’s Chris Loughlin left the UK for New York this week to become one of the youngest chief executives of firms listed on the Nasdaq stock exchange, leaving behind him some ambitious expansion plans for Europe.
The 36-year-old father of two has lived and worked in London for five years as Travelzoo’s managing director for Europe. In that time he has steered the online publisher of travel deals from a standing start to four million subscribers in Europe.
This, according to Loughlin, was almost exactly in line with projections set out in a spreadsheet when he moved from Travelzoo’s Chicago base, where he had been working on expanding its business in North America.
But he said “there was some unfinished business”.
European growth target
“We are on four million subscribers but there’s no reason why, in the next three to five years, we can’t be at 12 million.
“The UK business is profitable and we need to get the other businesses in Europe profitable, but we are pleased with progress. As every year passes we are more comfortable with the markets we are in.”
The hoped-for big jump in European subscribers will come, Loughlin expects, from markets Travelzoo has entered relatively recently, as he expects Spain, France and Germany to mature as the UK has.
In the last quarter alone, Travelzoo added 360,000 subscribers in Europe at an average cost of £2 each. That quarter also saw the UK operation report profits of £500,000 on revenues of £2.4 million, although Europe recorded an operating loss of $951,000.
Loughlin said the £2 cost of subscriber acquisition – made up of what the firm spends on offline advertising as well as paid search – is an important figure for Travelzoo because although the sheer number of subscribers is an important metric of success, it is the quality that Loughlin is most interested in.
“The number of subscribers is important because we need to get reach in advertising. But if you are reaching a bunch of email address and there’s no one on the end of them then it’s a pointless exercise,” he said.
“Some people might say that’s really amazing that they will spend £2 just to attract a subscriber. But we do this because we want to educate people about what we do and why we do it.
“If you analyse our media activity, a lot of it, more than 60%, is about communicating what we do. It’s not done necessarily through search, it’s done through TV, online, or outdoor advertising.
“With a lot of other companies, most of their budgets will be spent in search so they are capturing people already in the funnel. We want to capture people interested in the service for the long run.”
The focus on quality also stretches to Travelzoo’s deals, which Loughlin said were rigorously tested before they were published on its website or its core weekly Top 20 Travel Deals email.
Already this year 60,000 deals have been tested in centres in Munich and Chicago and the data this generates now enables Travelzoo to offer advertisers automated feedback on the effectiveness of their websites.
“The industry is constantly asking how you can improve conversion rates. We will start to automate that so if you have deals with us you will constantly receive reports if there are problems and so you know if everything is going well.”
Loughlin believes one of the more unexpected successes of Travelzoo has been the way it has allowed travel firms to expand their reach. This has seen UK travel agents negotiating co-funding for media activity direct from foreign hotel groups – becoming, in effect, media buyers for their suppliers.
Travelzoo also helped start-up cruise operator easyCruise develop a US market and it is allowing UK travel agents to promote deals to clients in other European markets such as Spain.
“If you want to fly to the Maldives from Spain, it’s a nightmare. You would probably fly from London anyway so now if you’re Spanish and someone in the UK has a fantastic package you can book that and buy a low-cost flight to London. It’s really a nice way for travel businesses to test new markets.”
Loughlin considers himself to be a businessman who thrives in an entrepreneurial world, and he sees in some of Travelzoo’s advertisers the pitfalls of the big corporate, which have been slower to grasp online opportunities.
He left Marks & Spencer in his early 20s “frustrated with the speed it was moving”. So how does he intend to make sure Travelzoo doesn’t morph into a lumbering corporate?
He says it’s all about structure: “Travelzoo is one brand but we are, in fact, seven different businesses. We rarely have more than 40 people in any one office and we like to distribute staff in smaller offices where they can be entrepreneurial. We look at the opportunities we really believe in and go after them and allocate resources.”
And what of the management team he leaves behind in Covent Garden: UK managing director Joel Brandon-Bravo and European operations director Steve Dunk?
“It’s like having Joe Cole and Wayne Rooney on the field – on a good day.”