TRAVELZOO (TZOO) Business

Item 1. Business

Overview

Travelzoo (including its subsidiaries and affiliates, the “Company” or “we”) is a global Internet media company. We operate Travelzoo®, the club for travel enthusiasts, Jack’s Flight Club®, and Travelzoo META. We reach 30 million travelers. Club Members, who pay a membership fee, receive Club Offers negotiated and rigorously vetted by our deal experts around the globe. Our relationships with thousands of top travel suppliers—give us access to irresistible deals. Our club and its benefits are built around the lifestyle of a travel enthusiast.

Travelzoo attracts a high-quality audience of travel enthusiasts across multiple digital platforms, including email, websites, social media and mobile applications. We have over 4.7 million social media followers on Facebook, Instagram, X and WeChat and, to date, our iOS and Android mobile applications have been downloaded 8.1 million times.

Our most important products and services are the Travelzoo website (travelzoo.com), the Travelzoo iOS and Android apps, the Top 20® email newsletter, Standalone email newsletters, the Travelzoo Network, and Jack's Flight Club®. Our Travelzoo website and newsletters include Local Deals and Getaways listings that allow our members to purchase vouchers for offers from local businesses such as spas, hotels and restaurants. Jack's Flight Club is a subscription service that provides members with information about exceptional airfares.

Thousands of travel and local providers use our advertising and marketing services.

The Company generates revenue from advertising and commerce, membership fees, and other sources.

Advertising revenue consists primarily of (a) advertising fees paid by travel companies for the publishing of their offers on Travelzoo’s media properties, (b) commissions and revenues generated from the sale of Getaways vouchers and bookings on our hotel platform, and (c) publishing fees from high-quality local businesses, sale of Local Deals vouchers and entertainment offers. We typically recognize advertising revenues upon delivery of emails or clicks, as tracked by our internal platform or third-party platforms. We recognize revenue upon the sale of vouchers, upon notification of the amount of direct bookings or upon delivery of emails. We recognize a percentage of the face value of vouchers upon the sale of the vouchers, net of an allowance for refunds.

Membership fee revenue consists of subscription fees paid by Travelzoo and Jack's Flight Club. Travelzoo membership has historically been free, however, on January 1, 2024, Travelzoo introduced an annual membership fee of $40 (or local equivalent) for new members in the United States, Canada, United Kingdom and Germany, with the 2024 annual fee waived for existing members as of December 31, 2023. On January 1, 2026, we increased the annual membership fee to $50 for new members in the United States only. For existing Club Members, the new pricing will apply from the next renewal of their membership after February 1, 2026. Jack’s Flight Club subscription options are quarterly, semi-annually, and annually. We recognize subscription revenues ratably over the respective subscription periods.

Other revenue consists of licensing fees from license agreements, as well as the retail business originally operated by Metaverse Travel Experiences LLC ("MTE") and acquired and maintained by the Company following the acquisition of MTE.

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We also license Travelzoo products, services and intellectual property to licensees in (a) Australia, New Zealand, and Singapore and (b) Japan and South Korea, in each case, where the Company is entitled to quarterly royalty payments based on a percentage of net revenue. The Company recognized $68,000 and $71,000 in royalties in 2025 and 2024, respectively. Under the licensing agreements, Travelzoo's existing members in the applicable territories continue to be owned by the Company.

The Company has four reportable operating segments: Travelzoo North America, Travelzoo Europe, Jack’s Flight Club and New Initiatives. Travelzoo North America consists of the Company’s operations in the U.S. and Canada. Travelzoo Europe consists of the Company’s operations in France, Germany, Spain, and the UK. Jack’s Flight Club consists of subscription revenue from premium members to access and receive flight deals via email or mobile applications. New Initiatives consists of Travelzoo’s licensing business, Travelzoo META and MTE. For the year ended December 31, 2025, Travelzoo North America operations comprised 66% of revenues, Travelzoo Europe operations comprised 28% of revenues and Jack’s Flight Club operations comprised 6% of revenues.

Our principal business office is located at 590 Madison Avenue, 35th Floor, New York, New York 10022.

As of December 31, 2025, there were 10,932,337 shares of common stock outstanding.

Ralph Bartel, who founded Travelzoo, is the sole beneficiary of the Ralph Bartel 2005 Trust, which is the controlling shareholder of Azzurro. Azzurro is the Company’s largest shareholder and, as of December 31, 2025, holds approximately 33.5% of the Company's outstanding shares. Holger Bartel, the Company's Global CEO, is Ralph Bartel's brother and did not hold any of the Company's outstanding shares as of December 31, 2025.

Travelzoo is listed on the NASDAQ Global Select Market under the symbol “TZOO.”

Our Industry

According to the World Travel & Tourism Council (WTTC), the global Travel & Tourism industry experienced significant growth in 2025, reaching historic record-breaking levels. The global sector's total economic contribution grew about 7% year-over-year in 2025, reaching $11.7 trillion (approximately 10% of global GDP). This figure includes direct, indirect and induced contributions to global GDP and reflects a continued recovery and expansion of travel and tourism worldwide. The WTTC forecasts that the global value of Travel & Tourism will grow by over 50% in the coming decade, expanding the industry’s value, contribution to GDP and employment. The United States was revealed as the world’s most powerful Travel & Tourism market, with Germany, the United Kingdom and France in the third, fifth and sixth spots, respectively.

Our mission, as the club for travel enthusiasts, is to provide our members with the highest quality information about the best travel, entertainment and local offers and to provide unique benefits designed to support the lifestyle of a travel enthusiast. Based upon this outlook for the travel industry, and our presence in the United States, Germany, the United Kingdom and France, we believe we are well positioned to continue pursuing our mission and growing our business.

Digital Advertising

Digital advertising, the primary means by which we operate, has been growing continuously. According to Zenith, online advertising continues to lead as the fastest growing category of advertising. Digital channels were forecast to account for 59% of total global ad spend in 2025, reflecting annual growth of about 6.8%. Zenith projected that, going forward, digital advertising would keep expanding its share. Although traditional media outlets such as print (magazines and newspapers), television and radio continue to be another medium for travel, entertainment and local providers to advertise offers, the percentage spent on advertising in these traditional media outlets has been decreasing.

We believe that several factors are motivating and will continue to motivate travel, entertainment and local providers to focus a majority of their spending on the digital advertising of offers:

•Digital Media Is Consumers' Preferred Information Source. Market research shows that digital media formats are consumers' preferred information source for travel.

•Broad and Timely Audience Reach. With a majority of consumers researching, shopping and transacting on their mobile devices, tablets and computers on a daily basis, we believe digital advertising is the most effective way for businesses to quickly provide relevant information and enter into a consumer’s decision set.

•Other Benefits of Digital Advertising. Other benefits to advertisers of digital compared to traditional media include more precise audience targeting, real-time listings, real-time updates and performance tracking. Digital media also allows advertisers to advertise their sales and specials in a fast, flexible, and cost-effective manner.

We believe that travel, entertainment and local businesses often face the challenge of being able to quickly and effectively market and sell their excess inventory (i.e., airline seats, hotel rooms, cruise cabins, theater seats, spa appointments

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or restaurant seats that are likely to be unfilled) and, therefore, need a fast, flexible, and cost-effective solution for marketing excess inventory. The solution must be fast because such travel-related services (e.g., flash sales, mistake fares or rates, etc.) are a quickly expiring commodity. The solution must be flexible because the demand for excess inventory is difficult to forecast. The marketing must be cost-effective because excess inventory is often sold at highly discounted prices, which lowers margins.

In recent years, digital advertising has shifted towards social media. Social media ad spend continues to grow strongly, reaching approximately $247 billion in 2024, according to WARC Media. This represented a significant year-on-year increase of 14.3%. Key drivers of the spend in 2024 were Meta, which accounted for roughly 63% of the total global social spend, and formats like TikTok and Instagram Reels (video), which saw explosive growth, with social video spend rising by 20% as brands shifted towards short-form engagement. While email marketing still outperforms social media in conversions and return-on-investment, social media can be better for brand awareness, product discovery and broad audience engagement (e.g., around 51% of consumers say they discover new products through social ads). Companies are increasingly viewing social platforms as core advertising channels.

While we have always had a strong presence on social media and offered advertising opportunities to our partners via various channels, we believe it is important to note the shift towards social media and the importance to provide a multi-channel solution to clients and partners that includes comprehensive social media support, in addition to traditional digital advertising channels. We also note the importance of switching formats to video and supporting video throughout the Travelzoo user experience (acquisition, membership, etc.). This has become an integral priority and focus for us.

Subscription Services

Historically, Travelzoo has provided free membership for consumers, while generating revenue from advertising fees and commissions. Upon the acquisition of 60% of Jack’s Flight Club in 2020, we entered the market for paid subscription services, adding another revenue stream to our business. Beginning in 2024, new Travelzoo members are charged an annual fee of $40 (or similar amount in their local currency), with the 2024 annual fee waived for existing members as of December 31, 2023. In 2025, we began to increase the number of Club Members significantly and see positive adoption rates for the paid membership, however, we cannot yet predict whether this will continue at the same or a different rate. On January 1, 2026, we increased the annual membership fee for Travelzoo members in the United States to $50 for new members. For existing members, the new pricing will apply from the next renewal of their membership after February 1, 2026. We are investing in acquiring new Club Members, so long as the return and efficiencies are attractive. We believe that we are currently able to achieve an attractive return on investment (ROI) and payback.

Metaverse

In 2023 we launched Travelzoo META to extend the range of travel, entertainment and local experiences we offer to consumers to the Metaverse. According to Precedence Research, the U.S. Metaverse market in 2025 is estimated at approximately $32 billion of revenue. The market is anticipated to grow rapidly and is forecasted to reach $395 billion by 2034. The Metaverse offers experiences that can be immersive and provide social features, enabling consumers to virtually travel geographically and through space and time. Travelzoo META is exploring options to further develop its service and offerings, including leveraging the capabilities of MTE, which we acquired in December, 2022. We plan to include Metaverse travel experiences as a benefit of Travelzoo club membership in 2026, allowing us to utilize and leverage all we have learned and developed over the past few years for Travelzoo META for the benefit of our Club Members.

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Our Products and Services

The following table presents an overview of our products and services:

*    For Travelzoo website, Top 20, Standalone emails (which can include Local Deals and Getaways), Travelzoo Network and Travelzoo mobile applications, reach/usage information is based on internal Travelzoo statistics as of December 31, 2025. For Jack’s Flight Club, reach/usage information is based on data from Google Analytics and internal Jack’s Flight Club statistics from the Jack's Flight Club CRM platform as of December 31, 2025.

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Our Audience

With reach of 30 million travelers worldwide, we attract a high-quality audience of travel enthusiasts. We inform our audience about compelling offers sourced from over 5,000 providers worldwide. These offers are published by Travelzoo and its licensees in multiple languages across multiple digital channels and platforms, including email, websites, social media and mobile applications. We publish offers on Travelzoo and Jack’s Flight Club branded digital properties, as well as on third-party media properties via the Travelzoo Network, across which we syndicate our offer content.

Benefits to Travel, Entertainment and Local Businesses

Through the quality of our offer content and longstanding trust established in our brand, we attract an active and engaged audience of enthusiasts who our advertisers benefit from accessing. Key features of our services for advertisers include:

•Real-Time Offer Listings and Updates. Our services enable clients to advertise special offers on a real-time basis and update offers as their supply and demand conditions change.

•Real-Time Performance Reports. We provide clients with real-time tracking of the performance of their advertising campaigns, helping them to optimize their spend, by removing or updating unsuccessful listings and further promoting successful listings.

•Global Reach. We offer clients access to our large membership base of over 30 million consumers across the globe.

•Audience Targeting. As members submit their zip codes upon joining Travelzoo services, we are able to present offers to specific audiences that advertisers may perceive as geographically desirable, as well as presenting our Local Deals to members who live or work near those local businesses.

•Multichannel Approach. While email continues to be our primary channel, we pursue a multichannel approach with presence on various social media channels, native ad networks, affiliate networks, paid search and more. This allows advertisers’ offers to reach Travelzoo members where they are spending most of their time online.

Benefits to Consumers

Travelzoo membership provides consumers with a valuable array of benefits that we believe distinguish our products and services from other providers and engender strong brand equity and loyalty. Key features of our products and services include:

•Curation of Carefully Selected Offers From Extensive Array of Providers. Through our multiple digital products and services, Travelzoo alerts our members to current offers carefully selected by our deal experts from more than 5,000 travel, entertainment and local providers. This saves consumers time when searching for deals, sales and specials.

•Best-in-Market Offers. Travelzoo experts research, negotiate and ensure that offers advertised through Travelzoo meet our high standards for quality and value, giving members peace of mind that they are best-in-market. Leveraging our scale, operating history and strong relationships, we believe the offers we source are generally superior to opportunities members may otherwise access individually or through other providers.

•Current Information. Compared to print, TV or radio advertisements, we provide consumers more current information, since our technology enables suppliers to update their listings on a real-time basis.

•Reliable Information. We operate a Test Booking Center to check the availability of travel, entertainment and local deals before publishing offers to our members.

•Dedicated Member Service. Travelzoo provides members with dedicated member service which we manage, through telephone and email. Our dedicated service team enriches our value proposition for members and reinforces a positive brand association for Travelzoo and our advertiser clients.

Club membership has also allowed us to add additional benefits for our members, which empowers them to live the lifestyle of a travel enthusiast. These benefits include, but are not limited to:

•Club Offers: With a true closed user group of highly engaged members, Travelzoo is able to use its negotiating leverage to secure high-quality offers from high-end partners, available only to Club Members. These offers are available only on Travelzoo and cannot be found on other travel sites.

•Member Days: 4x per year, Travelzoo provides access to Club Members only to 48-hour sale events.

•Lounge Access for Delayed Flights: Club Members receive complimentary lounge access in case of a flight delay of one hour or more. This benefit is available for up to three companions and no matter where the Club Member booked the flight.

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•Travel Enthusiast HotlineTM: Travelzoo now provides specialized travel assistance services (covering medical, personal and logistical needs) in partnership with Allianz Partners. These services provide support for Club Members whenever and wherever they are traveling.

Jack’s Flight Club’s flight alert newsletters provide members with the best airfares for their chosen departure airports, as sourced by our expert team of flight finders, utilizing technology to search thousands of data points each day and meeting our rigorous quality standards. To maintain their independence, flight alerts are not sponsored by third parties and Jack’s Flight Club does not receive any commissions or payments for content published within the flight alerts.

Advertisers

As of December 31, 2025, our advertiser base included more than 5,000 travel, entertainment and local providers, including airlines, hotels, cruise lines, vacations packagers, tour operators, destinations, car rental companies, travel agents, theater and performing arts groups, restaurants, spas, and activity companies.

As discussed in Note 11–Segment Reporting and Significant Customer Information to the accompanying consolidated financial statements included in Part II, Item 8 of this report and incorporated herein by reference, as of December 31, 2025, the Company did not have any customers that accounted for more than 10% of revenues across Travelzoo North America and Travelzoo Europe. We had one customer that accounted for 10% or more of our total revenues during the years ended December 31, 2024.

Sales and Marketing

As of December 31, 2025, our advertising sales force and sales support staff consisted of 65 employees worldwide. To maintain and expand relationships with partners and suppliers, we attend and sponsor industry conferences and live events, meet with existing and future prospects virtually and in person, and employ public relations to create visibility for our brand.

To promote membership to consumers, we primarily utilize digital marketing efforts. We also source members organically, by word-of-mouth and through our reputation for quality and value.

Technology

We have designed our technology infrastructure to send a large volume of emails, serve a large volume of web traffic and track activity in an efficient and scalable manner.

Travelzoo's production servers are hosted by Microsoft Azure, a cloud-based computing service operated by Microsoft. Microsoft Azure's data center facilities and services include robust high availability, reliability and scalability features. We believe our arrangements with Microsoft Azure will allow us to grow without being limited by our own physical and technological capacity. Because of the design of our websites, our users are not required to download or upload large files from or to our websites, which allows us to continue increasing the number of our visitors and page views without adversely affecting our performance or requiring us to make significant additional capital expenditures.

Intellectual Property

We rely on trade secret, trademark and copyright law, confidentiality agreements, and technical measures to protect our intellectual property rights. With respect to our trademarks, we maintain a portfolio of perpetual common law and federally registered trademark rights across several brands and domains relating to our business units, products, services and solutions. We claim copyright protection in our original content that is published on our websites and included in our marketing materials.

Regulatory Matters

Our business is subject to a significant number of federal, state, local and international laws, rules and regulations applicable to online or digital advertising and commercial email marketing. We are also subject to laws, rules, and regulations regarding data collection, privacy and data security, consumer protection, intellectual property ownership and infringement, sweepstakes and promotions and taxation, among others. We own and operate consumer-facing websites in the various regions in which we operate and are subject to the laws, rules, and regulations of those countries as they impact our operations.

These laws, rules, and regulations, which generally are designed to regulate and prevent deceptive practices in advertising and online marketing protect individual privacy rights and prevent the misuse and unauthorized disclosure of personal information, are complex, change frequently and have tended to become more stringent over time. In addition, the application and interpretation of these laws, rules, and regulations are often uncertain, particularly in the rapidly evolving industry in which we operate.

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Employees

As of December 31, 2025, we had 249 employees. None of our employees are represented under collective bargaining agreements. We consider our relations with our employees to be good.

Access to Other Information

We make available free of charge, on or through our Investor Relations website (ir.travelzoo.com), annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as well as proxy statements, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Information included on our website does not constitute part of this report.