Travelzoo Marches Deeper Into the Daily Deals Space With a Mobile App

Travelzoo got its start offering discounts on vacation packages to users who signed up to receive a regular email.

Now, the publicly held company is starting to look a lot more like Groupon.

The company, which has a market cap just shy of $1 billion, has released an iPhone app that will allow its subscribers to find deals for restaurants, travel and entertainment on the go.

I have heard from multiple sources that track sales in the space that Travelzoo could be the third-largest group-buying site on the Web after Groupon and LivingSocial.

In terms of number of subscribers, it easily falls behind the two leaders in the space. Groupon has 83.1 million subscribers, LivingSocial has 40 million and Travelzoo claims to have 23 million. Of its subscribers, a third are outside the U.S., and as of March 30, it delivered its one millionth deal.

As of the end of the first quarter, Travelzoo said revenues from its local deals doubled in the past three months to total $16.2 million. It’s ramping up its local sales team quickly, and is forecasting $312 million in annual revenue if it can grow to two deals a week in 100 markets with 20 million subscribers. It is currently live in 75 markets, and posted local deals revenue of $26.2 million in the second quarter.

For now, the iPhone app will only be available in North America, and will launch later in other countries.

Like the Groupon and LivingSocial apps, the Travelzoo app will allow users to browse current offers, search for deals that can be redeemed nearby, or search for deals in other cities when traveling. The app can also be used to manage and redeem vouchers that have been purchased.

Travelzoo is slightly different from others in the daily deals space because its emphasis is on vacation packages, including air and hotel discounts. Also, the company’s offers are often featured on the site for more than a day.

The company’s stock fell 31 cents yesterday to close at $58.01, which is significantly lower than its 52-week high of $103.80.


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