Hello everyone. Welcome to the Travelzoo Fourth Quarter 2018 Financial Results Conference Call. All participants have been placed in a listen-only mode, and the floor will open for questions following the presentation. Today's call is being recorded.

The Company would like to remind you that all statements made during this conference call and presented in the slides that are not statements of historical facts constitute forward-looking statements and are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

Actual results could vary materially from those contained in the forward-looking statements. Factors that could cause the actual results to differ materially from those in the forward-looking statements are described in the Company's forms 10-K and 10-Q, and other periodic filings with the SEC.

Unless required by law, the company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Please refer to the Company's Web site for important information, including the Company's earnings press release issued earlier this morning.

An archived recording of this conference call will be made available on the Travelzoo Investor Relations Web site at www.travelzoo.com/ir.

Now, it is my pleasure to turn the floor over to Travelzoo's Global Chief Executive Officer, Holger Bartel; and Travelzoo's Chief Financial Officer, Wayne Lee, who will start with an overview of the fourth quarter 2018 financial results..

For the first quarter of 2019, we expect year-over-year revenue growth to reaccelerate with Europe growing revenues in local currency at a double-digit rate. For the entire year, we expect revenue to grow in the upper single-digits as we extend our vacation package offerings from Europe into other countries, particularly, the U.S.

We are planning to increase our marketing spend across most markets, in particular in Q1 and we plan to maintain our investments in Asia-Pacific. We're aiming to reduce losses in this segment and turn it profitable within two years. Overall, we are aiming to increase operating margins in 2019 versus last year.

We expect the year-over-year growth in earnings, which we have seen in 2018 to continue in 2019, particularly in the second half of the year. We aim to maintain positive operating income while we will selectively reinvest in our business in areas as described to support future growth.

Now, Holger will provide you an update on why we believe Travelzoo's global brand will become increasingly relevant for consumers in the tourism industry..

Good morning. We see that global tourism industry increasingly talking and becoming worried about an overcrowding of destinations. Is this trend in tourism a threat or an opportunity for Travelzoo, we believe this trend presents an opportunity for us.

And I would like to speak with investors today, because it is important to understand what the trend of overcrowding means for the travels of business.

Industry research, for example, the recent study conducted by McKinsey and Company and the World Travel and Tourism Council are confirming a trend to what's overcrowding of a few top destinations in the world. While most other destinations existing or newly created are substantially lacking demand from travelers overcrowding is a global problem.

Increasingly, there is a need to spread visitors across destinations worldwide and to smooth visitors over time by encouraging them to visit during non-peak times. We believe that overcrowding presents a substantial opportunity for Travelzoo to create value.

What the Travelzoo brand has always done best is to inspire people and inspire our members to get off the couch, as are founder always said, and visit destinations which they had not thought of going to or traveling at times when they had not thought of traveling.

In our [indiscernible] plus business, we have built deep know-how to get people off the couch and thereby create new and different demands for the industry. We see Travelzoo's mission and business activity becoming increasingly relevant these days.

We help destinations to spur demand and we help travel suppliers to create demand and fill those airline seats and hotel beds at times when they would go empty, this is different from traditional travel websites, booking engines, online travel agents or even search engines, which simply allocate existing demand towards suppliers.

Management also believes that our global presence positions us well to make an impact on the flow of tourists into this global tourism industry. With more than 25 offices worldwide, the Travelzoo brand and company has its finger on the pulse of outstanding travel, entertainment and lifestyle experiences.

Working in partnership with more than 2,000 top travel suppliers around the world, provides Travelzoo members the very best inspirational offers, always carefully reviewed and test booked by our global team. Lastly, I would like to reiterate a few words about our business in Asia-Pacific.

We understand that the continued losses are not acceptable neither for investors nor for us. More efforts are needed from our global organization to assist Asia-Pacific with growing revenue to reach profitability. We've launched a project called internally Asia-Pacific 2020.

We will shortly announce an experienced executive we have recruited to lead the project who will be joined by three staff from Travelzoo's key functions in Europe and North America who know Travelzoo's business well. The project team will outline a clear path to profitability and manage execution.

It will also look into various partnership opportunities, particularly in China in order to grow scale more rapidly in this large opportunity market. Travelzoo's board of directors and management have made Asia-Pacific a priority.

We set an ambitious target and a firm deadline for creating shareholder value from the company's investments in this geographic region. Now back to the operator..

The floor is now open for questions. [Operator Instructions] Please hold while we poll for questions. And our first question comes from Ed Woo of Ascendiant Capital. Your line is now open..

Yes, thank you for taking my question.

My question is more generally the travel industry, have you noticed any changes in the travel industry particularly when we saw some of the volatility in the financial markets at the end of the year?.

Hi, Ed. So in Europe travel is going very strong, over the last two years we had a situation where people were afraid to travel to certain destinations. That is changing. Travelers are not going again to places like North Africa, Egypt, Turkey, and so forth, and that spreads demand over a lot of different places where people travel to.

North America, the good economy is making people travel also more. So there we have not really seen anything from - we haven't really seen an impact from what happened in the financial markets over the last few months.

In fact, we see the travel is becoming something that people want to rather do more than invest or buy goods or luxury purchases, things like that.

I would say the only area where we see a significant decrease in travel is China consistent with what we've heard from other companies, we have noticed that indeed the Chinese consumer is hesitating to spend, but that might change at some point of time when the trade war between North America and China or the U.S.

and China I should rather say is coming to a conclusion..

That sounds good. And then my next question is more on competition.

Have you noticed any change in the competitive landscape or has it been relatively steady?.

You know, what is interesting is I just talked about the value that we are creating for the travel industry and for suppliers. One thing that we have seen is actually that some of the travel suppliers have acquired a couple of smaller competitors that we have had in Europe.

So in France, there's a hotel chain that made an acquisition - it doesn't seem like that's really changing the business, but what it really confirms is that suppliers really need this service that we provide and that I was just talking about to stimulate demand at times when they need to fill their hotels or the airlines want to need to fill their airline seats.

Otherwise, no, there has not been any significant change in the competitive landscape, particularly, because we do something quite different than what a lot of the other travel sites and particularly the big OTAs are doing..

Great. So you've really seen all the changes even with some of the direct suppliers in terms of moving stuff in-house or it's pretty much stable..

Look, we are also sending business to suppliers directly. That's always something that we have done. So in that respect, suppliers like to work with us. OTAs don't do that.

But in general, from what I've seen from the research that I've seen and what we have experienced, consumers haven't significantly changed their purchase patterns, and buy more directly from suppliers than from intermediaries, no, there's no change in that trend, in spite of suppliers going out more aggressively with both advertising, marketing, and with promotions to lure buyers more directly to their sites..

Great. Thank you for answering my questions and [indiscernible]..

Thank you too, Ed, bye..

Okay, I'll turn back now to Mr. Holger Bartel..

Ladies and gentlemen, thank you again, for your time and support. We look forward to speaking with you again next quarter, goodbye..

Thank you, ladies and gentlemen, this concludes today's teleconference you may disconnect your lines at this….