After years of losing money in Asia Pacific, Travelzoo has announced it will exit its business in the region this week.
Operating profit reached $17 million in the core business of North America and Europe in 2019, but an operating loss of $7.5 million in Asia Pacific dropped Travelzoo’s global operating profit down to $9.5 million.
It was a similar case in 2018 when operating profit reached $14.6 million in North America and Europe but there was a $6.3 million operating loss in Asia Pacific.
Travelzoo reacquired its Asia Pacific operations in 2015 but has failed to achieve profitability in the region.
The New York-based travel deals website previously pledged to turn its Asia Pacific business around by 2020.
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In Travelzoo’s fourth-quarter earnings call on March 2, the company reported a 12% year-over-year decline in revenue for Asia Pacific.
Says global CEO Holger Bartel: “In our communications to investors over the last two years, we have consistently explained we will exit Asia Pacific if we cannot create shareholder value from this business activity by 2020.
“Unfortunately, the uncertainty about economies in Asia Pacific does not, in our opinion, allow us currently to deliver the shareholder value within the promised timeline and without further operating losses from this segment.”
Bartel says the company will focus on growing its profitable businesses in North America and Europe, as well as its recently acquired and profitable Jack’s Flight Club subscription service.
With Asia Pacific accounting for 5.7% of its global revenue, Travelzoo anticipates that the move will not have any negative impact on its business.