Travelzoo Inc. (NASDAQ:TZOO) Q2 2020 Earnings Conference Call - Final Transcript

Jul 30, 2020 • 11:00 am ET

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Travelzoo Inc. (NASDAQ:TZOO) Q2 2020 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

[Operator Instructions]

Our first question comes from Jim Goss of Barrington Research.

Analyst
James C. Goss

Okay, thank you. Looking at the sales and marketing and G&A numbers that you developed in the quarter, very good performance. I wonder if you could talk about the run rate you expect in those particular categories over the next couple of quarters. You had indicated you were cutting back some cost perhaps on a longer-term basis. What should we be expecting?

Executive
Holger Bartel

So right now, from where we are right now, the run to -- expense rate for the company, including all expenses and cost of sales, probably in 2021, will be somewhere around $60 million to $65 million, which is down approximately 30% from where we were before.

Analyst
James C. Goss

Okay. And I wonder...

Executive
Holger Bartel

Obviously, Jim, that can change, but that's sort of what we are forecasting right now.

Analyst
James C. Goss

Okay. No, it's sort of a moving target, I think, given the environment. I'm wondering if you could also talk a little bit about the impact of the pandemic on those who are sourcing your offerings. Because you indicated you have been getting some good deals, and I wonder if that's also sustainable or even improving now.

Executive
Holger Bartel

Yes. It's really two things how the travel industry is responding. First, airlines, hotels, almost every travel company is offering a lot of flexibility just because the uncertainty for the consumer. Consumers will be very hesitant to book if they are not able to cancel a trip. So that's the first thing. Second, clearly occupancy at hotels, and as we all know, occupancy and load factors at airlines are very depressed.

So that's very good for us. Yes, there are a lot of deals. How long will it last? The industry says it will take two to three years for this recovery to complete, to be back to normal levels as before. So I see -- I think and I see there's a long period where we will have a good amount of deals coming through, and that's obviously something that our members will enjoy, and that's where we, as a company, will benefit.

Analyst
James C. Goss

And maybe one last thing for this moment. What are you noticing in terms of the receptivity of your user base to the offers you're providing? And how is that influencing your ability to attract the advertisers to give you more promotions?

Executive
Holger Bartel

Yes. We -- our model is quite flexible because we can promote travel offers for today, tomorrow, for next year. Right now, what we are seeing is that -- and that's both in Europe and in North America that our members and consumers in general are more interested in domestic travel. They don't want to fly long distance. But at the same time, they are planning trips for next year for a long distance. So we -- for example, two weeks ago, we had an offer in North America for Europe. It was for travel for next year, summer 2021.

And that offer saw almost the same response