Travelzoo is poised to unveil a new version of its mobile app as it seeks to place ever greater focus on answering the ‘What’, ‘Where’ and ‘When’ of travel.
The new app reflects Travelzoo’s strategy of enhancing the service it offers its 27 million subscribers although it will not move away from its traditional deals and recommendations approach.
This strategy has led Travelzoo to develop its own booking engine for hotels which has been rolled out to a limited VIP audience in the US as it adds suppliers.
Chris Loughlin, Travelzoo chief executive, who spoke to Travolution while on a visit to the UK last week, said the ethos behind the new app was to make it more intuitive for users.
It will allow users to more easily filter and find content relevant to where they are, so for instance if they are looking for a local restaurant. It will also integrate flight search via its fly.com meta.
“What mobile has exposed for all of us [in travel] is simplicity. Simplicity is really the key thing that everybody has to focus on.
“Everybody who is running a travel technology type business it’s about simplicity and information delivery and speed of getting that information to the customer.”
Loughlin said Travelzoo was going through a genesis of its model, with the move to embracing a booking platform not a sign that it intends to flip the model to become an OTA.
He said the move was made mainly for two reasons: “Most hotels would like to pay commission and not an advertising fee and they would also rather not run a voucher.
“Second, on Travelzoo there was never an ability to search by date and time. As the brand matures we are becoming a destination where people have an expectation they can find a hotel.
“We might have the content but it’s not indexed and not easy for you to search, we just send it out in an email.”
Another key driver in offering a booking platform is to ease the pain of the mobile hand-off. Today mobile represents 50% of Travelzoo’s traffic.
“We have to start thinking in this second dimension of where the user is. For anyone in hotels it’s not just about where but it’s going to be about where your customer is standing right now.”
Travelzoo built its business on the back of its weekly curated Top20 deals email which saw it grow its international subscriber base rapidly.
Between 2010 and 2014 Travelzoo grew its business 65% and tripled profits having added local deals and getaways and into the mix along with ‘Super Search’ and flight meta-search fly.com.
But now with the brand established people are coming to the site to shop. New redesigned deals pages have boosted conversion, said Loughlin, underpinned by 200,000 of its own reviews.
“It’s a genesis of the model. We started off as an email publisher and established the interest of 27 million people.
“When those people came back to our site we had an email product they could look at but we did not have something they could search, so we are providing that; the ability to find what they want when they need it.
“We will stick to our idea of deals and recommendations, we are not going to be an OTA. We are not going to go down the same road as, say, lastminute.com which ended up offering exactly what everyone else was.
“We are really about deals. An awful lot of people are using our apps when they get to their destination to find spas and activities etc.
“We are not a price comparison brand or a reviews brand, it’s about getting a deal and saving money and sending customer to a place that’s really good.
“As a company you have to make money and continue to grow. The consumer does have an expectation that it will be simple and easy and, frankly, what they really like about doing business directly with brands like us is that they get great customer service.
“So if they have a problem with a hotel when they are in Barcelona and don’t necessarily speak Spanish they can call our customer service team and we will figure it out for them.”
Loughlin said the challenge for Travelzoo in terms of its hotel booking engine is to assess how it is working and how to scale it. “We are in the middle of that. We will do it gradually as we have done in the US,” he said.
Also on the ‘to do’ list for Travelzoo, said Loughlin, is a “cleaning up of the models” is operates. Currently it offers vouchers, advertising, commission, flat fee and cost per click.
Loughlin said it’s too early to say how the mix will change or whether any will be dropped entirely, but he said “it makes sense to rationalise and simplify your business”.
“In the US things are going well now with the booing engine. It’s still very small early stage, but it’s positive. Once it scales we will be able to see is that the model to pick.”
Although hotels are less keen on vouchers due to inventory constraints, Loughlin believes they are here to stay but more for particular products like museums and attractions or uses, like sold as gifts.
Loughlin said development resources in recent years were focused on local deals and then the booking platform, meaning search was paired back particularly in the US where it was more established.
Rising costs of buying traffic from Google drove down search revenues although margins increased, and ‘headwinds’ in the voucher space due to ‘consumer fatigue’ stifled growth if not profitability.
But Loughlin said the travel side of the business continues to grow and remains highly profitable with good margins both for Travelzoo and its advertisers.
“The big thing we have grown is we now have three million downloads of the app, we have 1.6 million people on Facebook and more on Twitter.
“That’s what we’ve done very well; grow our social and mobile audiences. In the UK mobile web outstrips desk top. People are using it for holidays and for hotel, we even had a subscriber book a cruise on mobile.
“In travel you either need to be at the supply side controlling supply or you need to be controlling the audience, one or the other.
“In order to be successful in business at some point within the first few years you need to establish a free audience.
“That can be built around you doing something no one else does or because your product or service is just so good that everyone want to go and do it. Travelzoo has a significant free audience.”
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