Travelzoo could gain a new set of customers if its metaverse project truly takes off. For now, its investment is modest, though.
Deal seller Travelzoo plans to launch a subscription-based travel metaverse in September as a way to reach new customers.
The Travelzoo Meta, which began testing in May with a limited set of users, “will be browser-enabled entertaining travel experiences that allow members to interact with, and in, the Metaverse,” the company said in a slide presentation accompany its second quarter earnings report Wednesday. “Travelzoo META is expected to attract a completely new generation of members, in addition to complementing real-world lifestyle and travel experiences curated by Travelzoo for its existing 30 million members.”
During the earnings call with analysts, Arveena Ahluwalia, Travelzoo’s global director of Travelzoo Meta, added: “Being a first-mover is important.”
Ahluwalia cited a survey in a June McKinsey report that found “virtual immersive travel is the second most sought-after experience in the Metaverse.”
For consumers who prefer virtual immersive experiences to similar activities in the real world, the survey found that connectivity with people (44 percent) and exploring digital worlds (26 percent) were the top two wish list items.
Travelzoo is in a test and learn phase with its metaverse project and would launch it in phases beginning in September.
CEO Holger Bartel said the project wouldn’t entail a large tech investment.
“So Travelzoo META will be complementing real-world travel and attracting a completely new generation of members,” Ahluwalia said. “So we will not be competing with real world travel but making places that are inaccessible more accessible via virtual travel experiences. In addition, we’ll be providing other forms of travel experiences, which you cannot will experience in the real world.”
For the second quarter, Travelzoo officials said revenue still hasn’t reached pre-pandemic levels but they achieved higher operating margins than in 2019. Officials attributed the revenue weakness to customers redeeming vouchers for travel.
Revenue for the quarter fell 7 percent to $17.7 million. Net income was $1 million, compared with $3 million a year earlier.
Travelzoo said it had challenges sourcing deals from airlines and hotels in the second quarter, but expects that to change in the fall as hotels and airlines slash prices.