Travelzoo 2014 Annual Report Download - page 75

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40
Europe revenues increased $3.9 million in 2013 compared to 2012. This increase was primarily due to an increase in
Travel revenues offset by a decrease in Search revenue. The increase in Travel revenue of $4.8 million was primarily due to an
increase from Getaway due to increased number of Getaway vouchers sold and an increase in revenues from travel publications
due to an increased number of e-mails delivered. The decrease in Search revenue of $885,000 was primarily due to the
decreased number of clicks that generate revenue as a result of decreased spending on traffic acquisition.
For 2014, 2013 and 2012, none of our customers accounted for 10% or more of our revenue.
Foreign currency movements relative to the U.S. dollar positively impacted our revenues from our operations in Europe
by approximately $1.7 million for 2014. Foreign currency movements relative to the U.S. dollar negatively impacted our
revenues from our operations in Europe by approximately $1.4 million and $1.7 million for 2013 and 2012, respectively.
Cost of Revenues
Cost of revenues consists primarily of network expenses, including fees we pay for co-location services and depreciation
and maintenance of network equipment, payments made to third-party partners of the Travelzoo Network, fees we pay related
to user searches on Fly.com, amortization of capitalized website development costs, credit card fees, certain estimated member
refunds and customer service costs associated with vouchers we sell and hotel booking, and salary expenses associated with
network operations and customer service staff. Cost of revenues was $17.9 million, $17.4 million and $15.7 million for the
years ended December 31, 2014, 2013 and 2012, respectively.
Cost of revenue increased $504,000 in 2014 compared to 2013. This increase was primarily due to $685,000 increase in
payments made to third-party partners of the Travelzoo Network, a $434,000 increase in salary and employee related expenses
due to headcount increase for hotel booking customer service, a $200,000 increase in professional service expenses, offset by a
$827,000 decrease in fees we paid related to user searches on Fly.com.
Cost of revenue increased $1.7 million in 2013 compared to 2012. This increase was primarily due to an increase of $1.1
million in payments made to third-party partners of the Travelzoo Network, an increase of $488,000 in Local Deals and
Getaway costs including a $545,000 increase in credit card fees and a $449,000 increase in salary and employee related
expenses due primarily to an increase in customer service headcount, offset by an $819,000 decrease in member refunds.