Deals publisher Travelzoo continues to plough on with its two-pillar strategy of growing the audience and enhancing the products.
In fourth quarter 2014 results this week, the company announced a 16% loss year-on-year with revenue of $31.5 million as well as a 72% reduction in operating profit to $1.2 million.
Reported losses for the third quarter were a 10% decrease year-on-year in revenue to $33.5 million and declines in operating profit in both North American and European markets.
But the company is confident there continues to be money to be made in the hotels market despite increasing competition from pretty much all quarters - think OTAs, single purpose same-day apps, same-day booking services from big OTAs, TripAdvisor and its instant booking initiative and so on.
In an earnings call, executive chairman Holger Bartel (a founder and former chairman of the company) opened up a little about the hotel booking platform which Travelzoo has been touting for about 18 months now.
The company strategy is to widen its appeal so that users are presented with deals not just via email but also when they are searching for a hotel in a specific destination on a specific date.
Bartel describes this specific destination and date as a "basic need among a mass audience" while the impulse to purchase a deal on an email is "a smaller opportunity".
As in its Q3 results, the strategy is not yet fulfilling growth expectations because the product is not wide-ranging enough and not easy to uncover.
Testing of the platform began at the beginning of 2014 among some users enabling them to find deals anytime but Bartel says the company is not happy with the content or the product. Feedback from members was that there were too few hotels and they were too expensive.
So the company went quiet on the platform for a few quarters while it worked behind the scenes on a "makeover" and a relaunch a "different product with better content" this quarter.
Note that it's members now, no longer subscribers, as the company seeks to tap into a higher quality audience in a more efficient way.
Social media is one area where Travelzoo feels it hasn't taken full advantage of fans and followers particularly on Facebook. It will now look to more effective use of data.
The company is also collecting and experimenting with behavioral data with hopes to be a leader in the 'big data space' down the road.
The general tone of the call seems to be one of asking for patience as investment in product and experimenting with audience acquisition can be expensive.
Whether the market is prepared to wait will be interesting with shares dipping to a six-year low, to under $10 off the back of the reported losses.
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