Item 1. Business
Overview
Travelzoo® (including its subsidiaries and affiliates, the “Company” or “we”), the club for travel enthusiasts, is a global Internet media company. We reach 30 million travelers. Club Members, who pay a membership fee, receive Club Offers personally reviewed by our deal experts around the globe. We work in partnership with thousands of top travel suppliers—our long-standing relationships give us access to irresistible offers.
Travelzoo attracts a high-quality audience of travel enthusiasts across multiple digital platforms, including email, websites, social media and mobile applications. The Travelzoo website is visited by over 6 million unique visitors monthly. We have over 5 million social media followers on Facebook, Instagram, X and WeChat and, to date, our iOS and Android mobile applications have been downloaded 7.8 million times.
Our most important products and services are the Travelzoo website (travelzoo.com), the Travelzoo iOS and Android apps, the Top 20® email newsletter, Standalone email newsletters, the Travelzoo Network, and Jack's Flight Club®. Our Travelzoo website and newsletters include Local Deals and Getaways listings that allow our members to purchase vouchers for offers from local businesses such as spas, hotels and restaurants. Jack's Flight Club is a subscription service that provides members with information about exceptional airfares.
Thousands of travel and local providers use our advertising and marketing services, including Exoticca, Inspiring Vacations, Prestige Travel+Cruise, TraveloDeals, Globus Family of Brands, Tripmasters Inc., Destination Weddings Travel Group, Holland America Line, TripToGo, Gate 1 Travel, Visit Santa Barbara, Online Vacation Center, Princess Cruises, Travel Discounters, Vacation Express, Fiji Airways, Virgin Voyages, Wingbuddy.com, Rocky Mountaineer Vacations, Transat Tours Canada Inc. and WestJet Airlines.
The Company generates revenue from advertising, membership fees, and other sources.
Advertising revenue consists primarily of (a) advertising fees paid by travel companies for the publishing of their offers on Travelzoo’s media properties, (b) commission generated from the sale of Getaways vouchers and bookings on our hotel platform, and (c) publishing fees from high-quality local businesses, sale of Local Deals vouchers and entertainment offers. We typically recognize advertising revenues upon delivery of emails or clicks, as tracked by our internal platform or third-party platforms. We recognize revenue upon the sale of vouchers, upon notification of the amount of direct bookings or upon delivery of emails. We recognize a percentage of the face value of vouchers upon the sale of the vouchers, net of an allowance for refunds.
Membership fee revenue consists of subscription fees paid by Travelzoo, Jack's Flight Club, and Travelzoo META members. Travelzoo® membership has historically been free, however, on January 1, 2024, Travelzoo introduced an annual membership fee of $40 (or local equivalent) for new members in the United States, Canada, United Kingdom and Germany, with the 2024 annual fee waived for existing members as of December 31, 2023. Jack’s Flight Club subscription options are quarterly, semi-annually, and annually. We recognize subscription revenues ratably over the respective subscription periods. For Travelzoo META, a founding membership was launched in 2023 following a test-and-learn strategy.
Other revenue consists of licensing fees from license agreements, as well as the retail business originally operated by Metaverse Travel Experiences, LLC ("MTE") and acquired and maintained by the Company following the acquisition of MTE.
We also license Travelzoo products, services and intellectual property to licensees in (a) Australia, New Zealand, and Singapore and (b) Japan and South Korea, in each case, where the Company is entitled to quarterly royalty payments based on a percentage of net revenue. The Company recognized $71,000 and $71,000 in royalties in 2024 and 2023, respectively. Under the licensing agreements, Travelzoo's existing members in the applicable territories continue to be owned by the Company.
The Company has four reportable operating segments: Travelzoo North America, Travelzoo Europe, Jack’s Flight Club and New Initiatives. Travelzoo North America consists of the Company’s operations in the U.S. and Canada. Travelzoo Europe consists of the Company’s operations in France, Germany, Spain, and the UK. Jack’s Flight Club consists of subscription revenue from premium members to access and receive flight deals via email or mobile applications. New Initiatives consists of Travelzoo’s licensing business, Travelzoo META and MTE. For the year ended December 31, 2024, Travelzoo North America operations comprised 66% of revenues, Travelzoo Europe operations comprised 29% of revenues and Jack’s Flight Club operations comprised 5% of revenues.
Our principal business office is located at 590 Madison Avenue, 35th Floor, New York, New York 10022.
As of December 31, 2024, there were 11,835,976 shares of common stock outstanding.
Ralph Bartel, who founded Travelzoo, is the sole beneficiary of the Ralph Bartel 2005 Trust, which is the controlling shareholder of Azzurro. Azzurro is the Company’s largest shareholder and, as of December 31, 2024, holds approximately 37.5% of the Company's outstanding shares. Holger Bartel, the Company's Global CEO, is Ralph Bartel's brother and separately holds less than 1% of the Company's outstanding shares as of December 31, 2024.
Travelzoo is listed on the NASDAQ Global Select Market under the symbol “TZOO.”
Our Industry
According to the World Travel & Tourism Council (WTTC), the global Travel & Tourism industry grew 13% in 2023 to reach more than $1 trillion, with a return to pre-pandemic levels anticipated by 2025. The WTTC forecasts that the global value of Travel & Tourism will grow by over 50% in the coming decade, expanding the industry’s value, contribution to GDP and employment. The United States was revealed as the world’s most powerful Travel & Tourism market, with Germany, the United Kingdom and France in the third, fifth and sixth spots, respectively.
Our mission, as the club for travel enthusiasts, is to provide our members with the highest quality information about the best travel, entertainment and local offers. Based upon this outlook for the travel industry, and our presence in the United States, Germany, the United Kingdom and France, we believe we are well positioned to continue pursuing our mission and growing our business.
Digital Advertising
Digital advertising, the primary means by which we operate, has been growing continuously. According to Zenith, online advertising continues to lead as the fastest growing category of advertising and is expected to account for 59%, or approximately $550 billion, of global advertising spending in 2024, with continued growth in 2025. Although traditional media outlets such as print (magazines and newspapers), television and radio continue to be another medium for travel, entertainment and local providers to advertise offers, the percentage spent on advertising in these traditional media outlets has been decreasing.
We believe that several factors are motivating and will continue to motivate travel, entertainment and local providers to focus a majority of their spending on the digital advertising of offers:
•Digital Media Is Consumers' Preferred Information Source. Market research shows that digital media formats are consumers' preferred information source for travel.
•Broad and Timely Audience Reach. With a majority of consumers researching, shopping and transacting on their mobile devices, tablets and computers on a daily basis, we believe digital advertising is the most effective way for businesses to quickly provide relevant information and enter into a consumer’s decision set.
•Other Benefits of Digital Advertising. Other benefits to advertisers of digital compared to traditional media include more precise audience targeting, real-time listings, real-time updates and performance tracking. Digital media also allows advertisers to advertise their sales and specials in a fast, flexible, and cost-effective manner.
We believe that travel, entertainment and local businesses often face the challenge of being able to quickly and effectively market and sell their excess inventory (i.e., airline seats, hotel rooms, cruise cabins, theater seats, spa appointments or restaurant seats that are likely to be unfilled) and, therefore, need a fast, flexible, and cost-effective solution for marketing excess inventory. The solution must be fast because such travel-related services (e.g., flash sales, mistake fares or rates, etc.) are a quickly expiring commodity. The solution must be flexible because the demand for excess inventory is difficult to forecast. The marketing must be cost-effective because excess inventory is often sold at highly discounted prices, which lowers margins.
In contrast, we believe that traditional media formats (print, TV and radio advertising) suffer from a number of limitations with respect to advertising excess inventory, which do not apply to digital advertising and media:
•Advance commitments and scheduling are typically required prior to publication or airing dates, making it difficult to advertise last-minute inventory;
•Ads often cannot be updated (e.g., change price or offer) once published, or deleted when an offer is sold out;
•A small number of traditional media outlets can reduce competition in many markets, resulting in relatively high rates for traditional advertising;
•Detailed performance tracking is often not available for offline advertising in a manner that enables optimization;
•Creative content can be expensive to develop; and
•Delivery of traditional media can be slow, with limited touchpoints to a consumer.
We believe Travelzoo is well-positioned to continue assisting travel partners with advertising their excess inventory, in ways that traditional print, TV and radio advertising cannot, particularly as the demand for travel returns to pre-pandemic levels.
Subscription Services and the Metaverse
Historically, Travelzoo has provided free membership for consumers, while generating revenue from advertising fees and commissions. Upon the acquisition of 60% of Jack’s Flight Club in 2020, we entered the market for paid subscription services, adding another revenue stream to our business. Beginning in 2024, new Travelzoo members are charged an annual fee of $40 (or similar amount in their local currency), with the 2024 annual fee waived for existing members as of December 31, 2023. We cannot yet predict trends in consumer adoption of paid membership for Travelzoo, although as anticipated, because of the waiver of the fee for existing members, it did not yet contribute materially to our financial results in 2024. We are scaling and diversifying our marketing and advertising strategies to acquire new paying members and convert existing free members.
In 2023 we launched Travelzoo META to extend the range of travel, entertainment and local experiences we offer to consumers to the Metaverse. According to Precedence Research, the U.S. Metaverse market in 2025 is estimated at approximately $32.7 billion of revenue. The market is anticipated to grow rapidly and is forecasted to reach $395.15 billion by 2034. The Metaverse offers experiences that can be immersive and provide social features, enabling consumers to virtually travel geographically and through space and time. Travelzoo META is exploring options to further develop its service and offerings, including leveraging the capabilities of MTE, which we acquired in December, 2022. We believe developing a service for Metaverse travel experiences will enable us to be a first-mover in this fast-growing space.
Our Products and Services
The following table presents an overview of our products and services:
Product Content PublicationSchedule Reach/Usage* Advertiser Benefits Consumer Benefits
Travelzoo website Website available in the U.S., Canada, France, Germany, Spain, and the U.K., as well as via licensees in Australia and Japan, listing thousands of outstanding offers from more than 5,000 travel, entertainment and local businesses 24/7 over 6 million unique visitors per month Broad reach, sustained exposure, targeted placements by destination and travel segment 24/7 access to offers, ability to search and browse by destination or keyword
Travelzoo Newsletters Including the Travelzoo Top 20 and Standalone emails 27.0 million travelers
Travelzoo Top 20 Popular email newsletter listing 20 of the week's most outstanding offers Weekly Mass “push” advertising vehicle to quickly stimulate incremental travel and entertainment purchases Weekly access to 20 outstanding, handpicked offers chosen by our internal deal experts from among thousands
Standalone emails Regionally targeted email newsletter service, usually with a single newsworthy travel and entertainment offer, which can include Local Deals and Getaways offers As needed Regional targeting, 100% share of voice for advertiser, flexible publication schedule Daily travel and local offers and ideas
Travelzoo Network A network of third-party websites that list outstanding offers published by Travelzoo 24/7 Over 400 third-party websites Drives qualified users with substantial distribution beyond the Travelzoo audience Contextually relevant travel offers that have been handpicked and professionally reviewed by our internal experts
Travelzoo mobile applications iOS and Android applications that allow users to discover the best travel, entertainment and local offers On-demand 7.8 million downloads Allows travel, entertainment and local offers advertisers to reach our audience that is on the go 24/7 access to travel, entertainment and local offers for consumers that are on the go
Jack's Flight Club website Website available in the U.S, U.K., Germany, Netherlands, Luxembourg, Norway, Sweden, Denmark, Belgium, listing up to date exceptional airfares to paying members 24/7 417,000 visitors per month N/A 24/7 access to alerts, travel advice and guides. Ability to change user settings
Jack's Flight Club mobile application App available in the U.S, U.K., Germany, Netherlands, Luxembourg, Norway, Sweden, Denmark, Belgium, listing up to date exceptional airfares to paying members 1–12 per week depending on membership level and region 208,083 sessions per month N/A Timely alerts and push notifications of new alerts, 24/7 access to alerts, ability to change user settings and select departure airport
Jack's Flight Club newsletters Regionally targeted newsletter alerting of outstanding cheap airfares and including articles about travel destinations and other newsworthy travel content. Newsletter includes paid and unpaid subscribers 1–12 per week depending on membership level and region 2.5 million emails per week N/A Breaking news flight offers and travel advice
* For Travelzoo website, Top 20, Standalone emails (which can include Local Deals and Getaways), Travelzoo Network and Travelzoo mobile applications, reach/usage information is based on internal Travelzoo statistics as of December 31, 2024. For Jack’s Flight Club, reach/usage information is based on data from Google Analytics and internal Jack’s Flight Club statistics as of December 31, 2024.
Our Audience
With reach of 30 million travelers worldwide, we attract a high-quality audience of travel enthusiasts. We inform our audience about compelling offers sourced from over 5,000 providers worldwide. These offers are published by Travelzoo and its licensees in multiple languages across multiple digital channels and platforms, including email, websites, social media and mobile applications. We publish offers on Travelzoo and Jack’s Flight Club branded digital properties, as well as on third-party media properties via the Travelzoo Network, across which we syndicate our offer content.
Benefits to Travel, Entertainment and Local Businesses
Through the quality of our offer content and longstanding trust established in our brand, we attract an active and engaged audience of enthusiasts who our advertisers benefit from accessing. Key features of our services for advertisers include:
•Real-Time Offer Listings and Updates. Our services enable clients to advertise special offers on a real-time basis and update offers as their supply and demand conditions change.
•Real-Time Performance Reports. We provide clients with real-time tracking of the performance of their advertising campaigns, helping them to optimize their spend, by removing or updating unsuccessful listings and further promoting successful listings.
•Global Reach. We offer clients access to our large membership base of over 30 million consumers across the globe.
•Audience Targeting. As members submit their zip codes upon joining Travelzoo services, we are able to present offers to specific audiences that advertisers may perceive as geographically desirable, as well as presenting our Local Deals to members who live or work near those local businesses.
Benefits to Consumers
Travelzoo membership provides consumers with a valuable array of benefits that we believe distinguish our products and services from other providers and engender strong brand equity and loyalty. Key features of our products and services include:
•Curation of Carefully Selected Offers From Extensive Array of Providers. Through our multiple digital products and services, Travelzoo alerts our members to current offers carefully selected by our deal experts from more than 5,000 travel, entertainment and local providers. This saves consumers time when searching for deals, sales and specials.
•Best-in-Market Offers. Travelzoo experts research, negotiate and ensure that offers advertised through Travelzoo meet our high standards for quality and value, giving members peace of mind that they are best-in-market. Leveraging our scale, operating history and strong relationships, we believe the offers we source are generally superior to opportunities members may otherwise access individually or through other providers.
•Current Information. Compared to print, TV or radio advertisements, we provide consumers more current information, since our technology enables suppliers to update their listings on a real-time basis.
•Reliable Information. We operate a Test Booking Center to check the availability of travel, entertainment and local deals before publishing offers to our members.
•Dedicated Member Service. Travelzoo provides members with dedicated member service which we manage, through telephone and email. Our dedicated service team enriches our value proposition for members and reinforces a positive brand association for Travelzoo and our advertiser clients.
Jack’s Flight Club’s flight alert newsletters provide members with the best airfares for their chosen departure airports, as sourced by our expert team of flight finders, utilizing technology to search thousands of data points each day and meeting our rigorous quality standards. To maintain their independence, flight alert newsletters are not sponsored by third parties and Jack’s Flight Club does not receive any commissions or payments for content published within the newsletters.
Growth Strategy
Our growth strategy is predicated on building our trusted travel, entertainment and local brands; increasing the value of our membership base and their engagement with our content; enticing advertisers to provide more exclusive and compelling offers for us to publish, and innovating with new experiences and revenue streams.
•Building Our Trusted Brands. We believe that trust is an essential cornerstone to our brand and has been central to the growth and retention of our membership base over the past twenty-five years. We have built our reputation over time through publishing high-quality content featuring carefully curated offers which members value, and supporting member purchases with excellent service. As travel and entertainment can be complex and highly-considered purchases, we believe that satisfaction is essential to every interaction or transaction our members have with us, and that our brand and reputation support our future growth.
•Increasing the Value and Engagement of Our Membership Base. While media brands often purport relevance and sell advertising placements based on audience size, we believe that advertisers increasingly value the quality of the audiences accessed, as measured by their responsiveness and ultimate purchase behaviors with advertisers’ offers. We continue to strategically evolve our member acquisition strategies in terms of membership features and marketing campaigns, to increase the value of our membership base for our advertiser clients.
•Sourcing More Exclusive and Compelling Offers From Advertisers. Growing our business entails an ongoing confluence of enhancing audience value with expanding the array and improving the value of offers we source from advertiser clients. We have an experienced salesforce that sources and services advertising clients, including through direct outreach and presence at industry conferences. We also maintain an active public relations effort, to drive awareness and promote our brand with trade organizations, other industry participants, consumers and advertisers.
•Innovating With New Experiences and Revenue Streams. In addition to enhancing and growing our established businesses and revenue streams, we seek to leverage our core competencies to innovate and expand our offerings and market opportunities. To date, this has included the acquisition of Jack's Flight Club in 2020, through which we added a subscription revenue stream, and the launch of Travelzoo META in 2023, which seeks to extend the range of travel and entertainment experiences we offer to the emerging Metaverse. In December 2023, we announced that Travelzoo membership, which had historically been free, would carry an annual fee beginning on January 1, 2024, provided the 2024 fee is waived for existing members as of December 31, 2023. As we transition our membership model, we are exploring various strategies to enhance value for our members, advertisers and business.
Advertisers
As of December 31, 2024, our advertiser base included more than 5,000 travel, entertainment and local providers, including airlines, hotels, cruise lines, vacations packagers, tour operators, destinations, car rental companies, travel agents, theater and performing arts groups, restaurants, spas, and activity companies. Some of our advertisers are:
Exoticca Online Vacation Center
Inspiring Vacations Princess Cruises
Prestige Travel + Cruise Travel Discounters
Travelodeal Vacation Express
Globus Family of Brands Fiji Airways
Tripmasters Inc. Virgin Voyages
Destination Weddings Travel Group Imagine Cruising
Holland America Line Wingbuddy.com
TripToGo Rocky Mountaineer Vacations
Gate 1 Travel Transat Tours Canada Inc
Visit Santa Barbara WestJet Airlines
As discussed in Note 11–Segment Reporting and Significant Customer Information to the accompanying consolidated financial statements included in Part II, Item 8 of this report and incorporated herein by reference, as of December 31, 2024, the Company had one customer that accounted for more than 10% of revenues across Travelzoo North America and Travelzoo Europe. We did not have any advertisers that accounted for 10% or more of our total revenues during the years ended December 31, 2023. Our agreements with certain advertisers are in the form of multiple insertion orders, hotel agreements and merchant agreements from groups of entities under common control.
Sales and Marketing
As of December 31, 2024, our advertising sales force and sales support staff consisted of 75 employees worldwide. To maintain and expand relationships with partners and suppliers, we attend and sponsor industry conferences and live events, meet with existing and future prospects virtually and in person, and employ public relations to create visibility for our brand.
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To promote membership to consumers, we primarily utilize digital marketing efforts. We also source members organically, by word-of-mouth and through our reputation for quality and value.
Technology
We have designed our technology infrastructure to send a large volume of emails, serve a large volume of web traffic and track activity in an efficient and scalable manner.
Travelzoo's production servers are hosted by Microsoft Azure, a cloud-based computing service operated by Microsoft. Microsoft Azure's data center facilities and services include robust high availability, reliability and scalability features. We believe our arrangements with Microsoft Azure will allow us to grow without being limited by our own physical and technological capacity. Because of the design of our websites, our users are not required to download or upload large files from or to our websites, which allows us to continue increasing the number of our visitors and page views without adversely affecting our performance or requiring us to make significant additional capital expenditures.
Intellectual Property
We rely on trade secret, trademark and copyright law, confidentiality agreements, and technical measures to protect our intellectual property rights. With respect to our trademarks, we maintain a portfolio of perpetual common law and federally registered trademark rights across several brands and domains relating to our business units, products, services and solutions. We claim copyright protection in our original content that is published on our websites and included in our marketing materials.
Regulatory Matters
Our business is subject to a significant number of federal, state, local and international laws, rules and regulations applicable to online or digital advertising and commercial email marketing. We are also subject to laws, rules, and regulations regarding data collection, privacy and data security, intellectual property ownership and infringement, sweepstakes and promotions and taxation, among others. We own and operate consumer-facing websites in the various regions in which we operate and are subject to the laws, rules, and regulations of those countries as they impact our operations.
These laws, rules, and regulations, which generally are designed to regulate and prevent deceptive practices in advertising and online marketing protect individual privacy rights and prevent the misuse and unauthorized disclosure of personal information, are complex, change frequently and have tended to become more stringent over time. In addition, the application and interpretation of these laws, rules, and regulations are often uncertain, particularly in the rapidly evolving industry in which we operate.
Employees
As of December 31, 2024, we had 227 employees. None of our employees are represented under collective bargaining agreements. We consider our relations with our employees to be good.
Access to Other Information
We make available free of charge, on or through our Investor Relations website (ir.travelzoo.com), annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as well as proxy statements, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Information included on our website does not constitute part of this report.