Trivago sees big opportunity in direct hotel booking

Trivago is now testing hotel direct bookings in eight markets as part of its growth strategy originally announced last year.

The company said it believes direct access to hotels combined with its existing comparison of rates from online travel agencies is its “biggest opportunity.”

In a letter to shareholders alongside its fourth quarter and full year 2022 earnings, Trivago said:

“We believe this will benefit travelers by providing them with better rates, more personalized offers and direct communication with the service provider, while hotels will appreciate owning the customer relationship, tailoring their offerings and increasing the revenue they can generate per customer. We are convinced that we are well positioned to pursue this opportunity and are excited about the value we can bring to users and hotels going forward.”

Trivago adds that directly bookable rates are available for properties that “attract 50% of click-outs, an increase from 38% prior to the test. We expect to reach 80% by year-end. With the increase in coverage, our front-end teams have the opportunity to launch new features that leverage the direct access to the hotel and better rates, and we expect to be able to actively promote these features by the beginning of 2024.”

The company also said that the “value of metasearch has increased” in the current environment with consumers looking to compare hotel offers and/or search for cheaper destinations to offset the impact of higher rates.

Trivago’s revenue increased $17 million to $112 million for the three months ending Dec. 31.

Net income in the fourth quarter was $11 million compared to a net income of $16.2 million in Q4 2021.

Adjusted EBITDA increased $3.2 million to $24.1million in the final quarter of 2022.

In Q4, referral revenue, the number of daily unique visitors that generate at least one referral, increased to $44.6million, $46.8million and $16.7 million in the Americas, Developed Europe and Rest of the World (RoW) respectively, representing increases of 15%, 23% and 32%.

Qualified referrals decreased by 8% overall year-over-year, with decreases in the Americas and RoW and a slight increase in Developed Europe.

Revenue per qualified referral, which is referral revenue divided by the total number of qualified referrals, increased 44%, 20% and 42% in the Americas, Developed Europe and RoW, respectively compared to the same period in 2021.

Sales and marketing costs for Q4 were $66 million versus $53 million in the same quarter of 2021, with 91% of the spend attributed to advertising.

Source: PhocusWire

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