Story by Rod Charles
Vacay.ca Deputy Editor
TORONTO, ONTARIO — Travelzoo Inc.’s CEO Chris Loughlin was eager to speak with Vacay.ca about his company and we can’t blame him. Since his appointment, Travelzoo’s annualized revenues have grown 55% and annualized operating income has increased more than threefold.
Travelzoo is a global Internet media company and its business is simple — to make it easier for consumers to find what they need, where they need it, when they need it. The company’s deal experts research and publish travel, entertainment and local deals. According to Bloomberg.com, Approximately 27 million members receive its e-mail newsletters, published in 11 countries worldwide. The company’s Website is visited by nine million unique visitors each month.
Travelzoo’s headcount has increased to 425 employees in Europe and North America since since Loughlin became CEO on July 1, 2010. In the first quarter of 2013, Travelzoo announced record revenues and beat analyst expectations on both revenues and operating income. Loughlin, who currently resides in Texas and is married with two young daughters, speaks at Internet and travel industry conferences and has appeared on TV networks such as CNBC and CNN. He was named the “2009 Young Entrepreneur of the Year” by The British Travel & Hospitality Industry Hall of Fame.
All very interesting stuff but you want to know about deals, not record revenues. Loughlin discussed great deals, Canadian tourists, the FIFA Women’s World Cup and what we can expect to see from Travelzoo in 2016.
Vacay.ca: How are things going in Canada for you?
Chris Loughlin: Things are going very well for us in Canada. Canada is one of our top four markets in the world. As one of the larger territories, it’s not just an outbound market where we are sending Canadians away on vacation, it’s also an inbound market where we are bringing Brits and Americans, Germans and even Chinese to the market as well so it’s a very important market for us.
Vacay.ca: People are very savvy when looking for deals, and there is a lot of competition out there for companies like Travelzoo to get that market. What’s Travelzoo doing to differentiate itself?
Loughlin: You know, when we started back in 1998 there were a lot of deals in the market already, but not every deal is born equal. Some deals don’t have much availability. Some deals have a lot of surpluses from taxes, or single passenger surpluses. We really factor in and check to make sure deals that are published are good and if they’re really good we’ll let our members know. More than half of the deals we publish we create with our travel partners — these deals didn’t exist before we came along.
Where we are also quite different from anything else in the market is Lara Barlow, who is our country manager, who can call somebody in Paris — we have an employee named Benoit in Paris — who she is good friends with. She can say Benoit, we need a hotel in Paris that would work with a Canadian tour operator. Then we fabricate a deal, and we’re doing that all the time — nobody else that I’m aware of is doing that. It would be very difficult for somebody just out of the blue to find a Paris hotel.
Let me give you an example of that. The JW Marriott Hotel in Venice, it’s a brand new hotel, an amazing hotel. They were just about to open and our local people in Italy knew about this. They then contacted all 11 countries we were in. We went to tour operators and said hey, there’s a new JW Marriott that’s about to open. We were able to package the deal up for our audience and send it out. We helped that hotel attract about four- or five-thousand room nights, people in every country that we operate in went, from Canada to China to Hong Kong to Australia to UK; all went to this hotel. That was pretty cool.
[quote]Canadians are very down to earth people[/quote]
Vacay.ca: What makes Canadian customers different? Are they different?
Loughlin: Well, I think Canadians are very down to earth people, that’s obvious. They’re looking for deals, but no more so than a German or a Brit. Where Canadians are different to Americans is you have more vacation time and you have more extreme weather. So when you are sitting in Manitoba in the middle of November that’s very different to sitting in Florida in the middle of November, right.
Vacay.ca: You can say that again. …
Loughlin: The other thing is you are a very welcome tourist in pretty much every country in the world. You’ve been travelling to Cuba for the 50 years that America has been locked out of Cuba. So I would say as a result of the fact that you’ve been welcomed everywhere and that the countries have very good relations around the world with pretty much every nation as a result of that, you’re pretty much a more adventurous outward facing group of people than some other countries. Now it’s not to say that Americans don’t go to exotic places like Cambodia or Thailand, but I would say. …
Vacay.ca: Canadians are better.
Loughlin: Well (laughter) oh boy. Well, I’m going to scare you. I’m British, but I’m also American.
Vacay.ca: Wonderful, that’s awesome. Thanks for Women’s World Cup loss, that was great.
Loughlin: Well, the US won in the end. I was very upset when the UK lost. I’m conflicted.
Vacay.ca: Yes, I can see that. Does anything ever surprise you on Travelzoo? Has any deal made you think that’s crazy — too good of a deal?
Loughlin: Oh yes, all the time. You know some deals are actually funded by destinations. So you may find an airline that introduces airfare. For example WOW Air just introduced airfare from Boston. It wasn’t from Canada in this case, but the last two days it was $353 round-trip from Boston, including taxes, to get to Europe. It’s absolutely crazy, right? So why is that happening? It’s happening because Norway is subsidizing this venture and the government benefits from inbound tourism. So that’s a surprise.
Honestly, some other things that’s surprising is the current price of the euro against the US dollar. Even against the Canadian dollar. The euro is very cheap right now compared to historical pricing and if you’re smart and looking to deal with Europe right now you can really find some fantastic deals. It’s a great time to go to Europe.
[quote]I have stayed at 70 to 80 per cent of all the hotels that we have in this platform[/quote]
Vacay.ca: There are some very good deals on Travelzoo, but I worry about that sometimes — you know, buyer beware. Usually, when I see prices that are too good it makes me worry there are bodies in the bathtub and bed bugs running loose between the mattresses.
Loughlin: No, we don’t do any of that stuff. We really do vet all of these hotels. I have stayed at 70 to 80 per cent of all the hotels that we have in this platform. Maybe more.
Vacay.ca: That’s pretty cool. Not everybody does that.
Loughlin: Well, it’s not cool for my family (laughter). I’m staying at the Trump here now in Toronto where we have a good deal.
Vacay.ca: What does 2016 hold for Travelzoo? Where do you see the organization going?
Loughlin: I think we continue to develop the business in the fashion that we are. We are re-platforming our hotel business and that will roll out certainly by the end of 2016, we’ll be fully in Canada. We are not putting it into Europe. We will be introducing a new website toward the end of the year, we’ve already talked about that publicly so you’ll see a new look and feel for Travelzoo. All of this is behind the notion that we just want to make it easier for people to find what they need, where they need it, when they need it. So what, where and when. That’s really what we’re about. We think because the quality of what we’ve got is so good, that the business will naturally grow as a result of that and attract more people.
[quote]We just want to make it easier for people to find what they need, where they need it, when they need it.[/quote]
The other thing that’s interesting is we’ll see where we are with the economy by the end of 2016. There are a lot of companies since 2008 that received a lot of funding and we know for sure that some of those businesses are not on sure footing. They’re not necessarily profitable. We have kept that down during the bull market, we’ve maintained a profitable business, we’ve got our house in order and so I think we will be able to take advantage of the market situation as some of the newest startups that are not as profitable disappear from the marketplace.
Vacay.ca: Is there any place in Canada you hope to visit?
Loughlin: I’m going to be in Niagara-on-the-Lake tomorrow. First time, I’m actually very excited. I’m going to be 20 minutes away from the Falls, but I’m definitely going to see the Falls. I enjoy going to the Vancouver area. I would like to go to Banff, I haven’t been there yet. Actually I would really like to go to Quebec City over the new year’s period. That’s my bucket list.
Vacay.ca: Thanks for this interview.
Loughlin: My pleasure.