Why Does Travelzoo Have a Big China Problem? – Jing Travel

Travelzoo is setting investors at ease with a jump in profits, even as global trade tensions aggravate business in Asia.

Gains in North America and Europe in the fourth quarter drove an increase in the stock price of the deals marketer on Wednesday, but ongoing losses in the Asia Pacific region dragged overall revenue down. In particular, the vacation package site suffered a nearly 30 percent loss in revenue in China, due in part to staffing issues and the ongoing U.S.-China trade war. The region has been a source of losses for the company for over three years.

“I would say the only area where we see a significant decrease in travel is in China, consistent with what we have heard from other companies,” said Travelzoo CEO Holger Bartel during an earnings call on Wednesday. “We have to move in step with the Chinese consumer who is hesitating to spend, but that might change at some point in time when the trade war between the U.S. and China is coming to a conclusion.”

Still, the company’s stock jumped 13 percent after market open, reaching nearly $15 before dropping slightly in the hours after the report was released.

North America and Europe generated $4.3 million in profits, nearly double from last year, while Asia Pacific maintained $1.5 million in losses. Overall, revenue came in at $27.1 million, up 2 percent from the fourth quarter of 2017. Earnings per share jumped to 13 cents from 5 cents the year prior. 

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