Hello, everyone. Welcome to the Travelzoo's Third Quarter 2019 Financial Results Conference Call. [Operator Instructions] Today's call is being recorded.

The company would like to remind everyone 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 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 website 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 website at travelzoo.com/ir. Now it's my pleasure to turn the floor over to Travelzoo's Global Chief Executive Officer, Holger Bartel; and the Chief Accounting Officer, Lisa Su.

Lisa will start with an overview of the third quarter 2019 financial results..

For Q4, we expect revenue growth to be higher than in previous quarters this year. We also expect operating profits and margins to increase versus the fourth quarter of 2018. As we extend our vacation product from Europe into other regions, we expect North America, and particularly the U.S., to benefit from the expanded offering.

We expect revenue in Asia Pacific to increase, especially our revenue from China, where we will focus on. For next year, we see an overall higher growth rate in revenues than in 2019, which will allow us to further improve our operating margin closer to 15% and continue to grow EPS even though we plan to invest more in marketing and member growth.

Now Holger will provide you an update on our business in Asia Pacific and explain why we believe Travelzoo's global brand and service is becoming more relevant for consumers and the tourism industry..

Thank you, Lisa. In the third quarter, we moved quickly and decisively in Asia Pacific. Never ever were we so focused on it. There are compelling reasons.

First, after rigorous review of the market, our business model and Travelzoo's current position in the market, the third-party research and review confirmed an immediate, concrete opportunity to grow revenue from China very substantially.

Second, we believe there will be a meaningful favorable impact on Travelzoo's reported EPS resulting from performance improvements in the Asia Pacific business segment.

Our new management team, which was installed in second quarter, worked in the third quarter with a top management consulting firm in China to develop together a strategy for a significant presence of Travelzoo in social media and mobile channels. The execution began in mid-September.

China has the biggest social media community in the world and has the highest mobile penetration, which makes it also ideal for us as a global company to develop capabilities in these areas. As the financial performance of our Asia Pacific business will improve, we should see a meaningful increase in Travelzoo's reported EPS.

Lisa earlier highlighted that the trailing 12-month pro forma EPS from our attractive core businesses in Europe and in North America would be $1.12 without the operating losses from Asia Pacific.

Our intention is to reach an even higher EPS in the next two years by further growing the business in Europe and in North America plus generating profits from the growing business in China. Travelzoo is very creative in identifying and discover destinations and new ways to enjoy already popular destinations.

What we do best is to generate and to influence demand among our members. And this advantage makes our brand more relevant than ever in tackling the challenges in today's tourism landscape. The global tourism industry is increasingly talking and becoming worried about overcrowding of destinations.

Overcrowding of destinations means that too many tourists are traveling to the same destinations at the same time leading to environmental and social problems. The problem was first covered in 2017 in a report by McKinsey & Company and the World Travel and Tourism Council.

By 2020, the 20 most popular countries will add more international arrivals than the rest of the world combined. How to manage supply and demand strategically is the key question to answer for any destination throughout its development cycle.

Travelzoo curates deals that allow our members to explore popular places during less busy seasons, also visiting new unique local attractions. In this case, Travelzoo will help manage demand and supply, planning in certain destinations as well as raising public awareness of the importance of sustainable travel.

Travelzoo is known for its creative travel ideas and inspirations. I want to say that we are always one idea ahead in finding the next interesting thing to do or interesting place to experience for our members. By leveraging our creativity in idea curating, we can help set the trend of sustainability in travel among consumers and the industry.

Now back to the operator..

Operator:.

Well, ladies and gentlemen, thank you for your time and support, and we look forward to speaking with you again next quarter. Have a nice day. Bye..

Thank you, Ladies and gentlemen. This concludes today’s teleconference. You may disconnect your lines at this time. Have a nice day..