In theory (according to hotels, anyway), resort fees should help hotel guests save money. Rather than charging individually for amenities like pool towels, beach chairs and entertainment, some hotels group these fees into one fee that is added to your room rate.
Trivago Opting Out of New Google Ad Unit Hurt Second Quarter Results
25.08.2023 - 13:06 / skift.com / Dennis Schaal / Johannes Thomas / Matthias Tillmann / Axel Hefer
Three key Trivago executives rejoined the company in May just as Google was launching a new advertising unit to attract hotel bookings. Trivago didn’t advertise in the new product, unlike brands such as Booking.com, Priceline, Expedia and Homewood Suites, and Trivago’s absence negatively impacted its second quarter financial results.
If anyone doubts the power of Google advertising to impact travel businesses one way or another, this is a case in point.
Chief Financial Officer Matthias Tillmann told financial analysts Wednesday that the company had decided not to advertise in Google’s new property promotion ads (see an image below) because they are part of Google hotel ads, which didn’t perform well for Trivago.
But it turned out that the property promotion ads took share from Trivago’s advertising on Google.com. Trivago is a hotel metasearch site. It advertises on Google to attract site visitors, who click online travel agency and hotel ads on Trivago, and then in turn they can navigate to those sites to book a stay.
“We did not participate in this ad format prior to this rollout, and when this got more visibility [at the expense of] traditional advert placements, we lost traffic volumes,” said Tillmann, referring to the property promotion ads.
However, Trivago started participating in the property promotion ads in July, and will see how they perform, he said.
All of this took place as three Trivago alums returned to the company in May after departing in 2020. They are CEO Johannes Thomas, Chief Marketing Officer Jasmine Ezz, and Chief Product Officer Andrej Lehnert. Now former-CEO Axel Hefer, who joined the company as chief financial officer seven months before the December 2016 IPO, were among those leaving the company in May.
Trivago has experienced a rough few years since it went public in 2016 at a roughly $4 billion valuation. That has dipped to around $406 million today. Over the years, Trivago has faced increased competition, including from Google, intermittently had spats with one of its largest advertisers, Booking Holdings, and has to deal with a decline in traditional TV as an advertising channel. Expedia Group holds a majority stake in Trivago.
Germany-based Trivago built its brand largely on the basis of omnipresent TV advertising, particularly in Europe and the U.S., and plans to redouble that effort under the new management team, although the company concedes this will take some time.
Speaking during his first earnings call as CEO and since rejoining Trivago after a three-year absence, Thomas said he, Tillmann, Ezz, and Lehnert “have been part of the leadership team that scaled Trivago across the globe. With our deep understanding of the company and the relevant know-how in
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