Monday, October 6, 2008

Is the Effectiveness of Travelzoo Declining?

If you are in the travel marketing business, you have heard of Travelzoo. If you haven't you should look into it. Travelzoo is at it's heart an email list of over 12 million subscribers worldwide. Travelzoo uses this list to market travel deals for airfare, hotel rooms, cruises, Broadway show tickets and more.

Advertisers submit their deal to Travelzoo for approval and addition to their weekly email blast the Top 20. It can take weeks or months for a supplier to get an open space in a Top 20 Newsletter. Travelzoo's team of producers will evaluate the offer to determine if they believe that it will be successful. If they don't like the offer, they'll tell you what it takes to get in the newsletter and if you don't make the changes they can deny putting the offer in the email blast. By doing this they insure the success of the offer and the value to their customer.

When they create the newsletter, they also offer the participating travel supplier a landing page that is created by Travelzoo. The landing page is where most of the work happens as Travelzoo then editorializes the offer. They really try to sell the offer by providing their readers value and a comparison of other offers they have seen, like this landing page fore Playa del Carmen:

If the person is interested in booking they are then sent direct to the supplier web site. Which as we all know is the holy grail to online promotions we are running.

Travelzoo also offers cost per click advertising and placement in their Super Search product. These are relatively new services for them.

A recent post on the Compete TravelTrends Blog talks about the growth in site traffic for Travelzoo. Compete estimates that Travelzoo's site traffic increased 95% over one year from 2007 to 2008. Additionally, they are saying that Travelzoo was able to grow volume by 33% since the beginning of the year. This isn't too shocking to me. The current economic downturn has hit the leisure traveler the most and what most of us are looking for is a way to stretch our own dollar to get more out of our vacations. Travelzoo is the channel in which to do this.

They are agressive in growing their email list by only allowing users who have signed up for their emails access to their online deals. Additionally, they run promotions with existing users to submit email addresses of friends for solicitation in Travelzoo's Top 20 with the offer of sweepstakes entries. One such offer last year offered the winning entrant every special that was listed on the Top 20 during the week. Not too shabby.

The bigger issue in my mind is that with all of this growth, the demographic of the Travelzoo customer is changing as are the economic times. The post goes on to say that the visitors to Travelzoo have spent consistently less time on the site over the last 13 months. People have less money to spend on luxuries like travel. More often than not, people are traveling only when they have to so when they go to Travelzoo, they know exactly what they are looking for.

(Graphic courtesy of Compete Inc.)

No longer is Travelzoo being used as a place to find a quick getaway. It is being used more often to find deals for the trip you were already going to take. Additionally, with more suppliers offering discounts now, you don't have to just go to the Travelzoo site to get the best deals. You can find them just about everywhere.

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