Travelzoo accelerated its expansion pace and launched Local Deals in 27 new markets in the second quarter, all part of its goal to be emailing Local Deals to consumers in 100 markets by the end of the year.
In each of the prior two quarters, the deal publisher had opened 18 markets i.e. cities or metropolitan areas.
Chris Loughlin, Travelzoo's CEO, said during the company's second quarter earnings call today that Travelzoo had an internal debate on whether to dive deeper into Local Deals in existing markets or to go "wide" and focus on geographic expansion.
Travelzoo chose to "go wide," Loughlin explained, adding that there are training advantages in bringing in lots of new-hires around the same time.
In that regard, Travelzoo added 27 people in the second quarter, which ended June 30, bringing its employee count to 343. The majority of the new hires, Loughlin said, work in Local Deals and the hiring pace was the fastest of any quarter in the company's history.
Travelzoo's Local Deals business is operating on annualized pace of reaching $100 million in gross revenue [before sharing revenue with merchants], Loughlin said.
The Local Deals business in North America should be getting a boost from an exclusive Travelzoo Local Deals partnership with Sysco iCare, which will leverage its sales force and help Travelzoo snare deals with its network of 250,000 restaurants.
There was some discussion in the earnings call about what some analysts perceived as softness in Travelzoo's core business -- the Top 20 deals newsletter.
Loughlin said the second quarter historically has been relatively flat compared when measured against with the company's first quarters, but acknowledged there had been some "confusion" and "cannibalization" in connection with the rollout of Travelzoo Getaways, a hotel voucher program geared toward the drive market.
In that regard, Loughlin characterized the company's Local Deals business as "very good," adding that some other areas of the business, including hotel advertising, have room for improvement.
In the second quarter, Travelzoo's net income rose 51% to $4.9 million on $37.6 million in revenue, a 34% jump.
Revenue in North America grew 25% to $27.7 million, and revenue from the European business leaped 67% to $10 million.
In other news, Travelzoo indeed will be launching an iPhone app in the U.S. within days, and it will later be rolled out internationally, Loughlin said.