Trivago Focusing on Booking Tool to Fight Online Travel Agencies

25.08.2023 - 14:15 / skift.com / Justin Dawes / Matthias Tillmann

In an effort to combat the hold that online travel agencies have on the hotel market, Trivago is focusing on building a capability for direct access between hotels and travelers. 

“What has happened over the last 10 years is that a few OTAs have gained more and more market share, so the industry is quite consolidated,” said CEO Axel Hefer in an interview with Skift, adding that that means customers have less choice, and hotels have many of their bookings coming through the top OTAs. 

“That’s why we believe that is one of the biggest — or the biggest — opportunities in online travel, in a way to dis-intermediate the OTAs, because the OTAs got too big.”

Trivago is a metasearch site for hotels and accommodations, meaning that user search results are compiled from multiple search engines into a single list, allowing users to compare prices. As of the end of 2022, the company offered access to more than 5 million hotels and other types of lodging accommodations in more than 190 countries.

Trivago executives shared info about the direct booking tool in development and other details during its fourth-quarter earnings call on Wednesday. 

Total revenue in 2022 was nearly $574 million (€535 million), an increase of 48 percent from the previous year. The company had a record adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $115.3 million (€107.5 million), an increase of 211 percent from last year. Net loss for 2022 was $136.4 million (€127.2 million), mainly driven by the impairment charges recorded in the second and third quarters of 2022 totaling $198 million (€184.6 million). Trivago shares are up 28 percent year-to-date, trading at $1.75 at midday Wednesday. 

The company expects to reduce operating expenses in 2023 despite inflation, mainly through job cuts carried out in the second half of 2022. Hefer declined to share details about the job cuts, referring the 20-F filing with the U.S. Securities and Exchange Commission that’s due in late March. 

Leisure travel has increased post-pandemic, but Trivago said it is beginning to see consequences of inflation as travelers search for less expensive options.

“We believe that metasearch is well positioned in this environment as consumers shift their focus to cost savings, and we will focus on improving the user experience and make it even easier for travelers to find great deals on our platforms,” said Matthias Tillmann, chief financial officer for Trivago, during the earnings call on Wednesday. 

The company has been testing the direct access tool in eight of its largest markets. It is meant to connect hotels and travelers directly, giving consumers access to direct booking prices, which Hefer said are about 10 percent lower than