Trivago is basically a hotel search platform the main focus of which is to reshape the way travellers search for and compare hotels online. During this process, Trivago enables hotel advertisers to expand their business by giving them the access to a large consumer base that visit its platform via website or the app.
Trivago was conceptualized in the year 2005 in the city of Düsseldorf, Germany. The hotel aggregator was started by three university friends Rolf Schrömgens, Peter Vinnemeier and Stephan Stubner. Similar to majority of the start-ups, the initial foundation of the business was laid from a garage. Further, in the year of 2006 one of the founders Stephan choose to opt for a career in the field of education, so MalteSiewert became the part of the founding team. As of today, the top management of the Trivago comprises of CEO Rolf Schrömgens, CFO Axel Hefer and COO Johannes Thomas.
How TrivagoGot started and the Initial Days?
Trivago started its operations in Germany and soon after the commencement of the company, it gained momentum and went on to grow in different markets. Following on its objective to show information to consumers successfully, Trivago in the first of year its inception partnered with more than OTAs (Online Travel Agency) to meet the demands.
The hotel aggregator collected data from large hotels to littler organization and would show it in the perfect way to hotel seekers. The company basically focussed on accumulating the information from reliable sources to make sure that customers are always provided with reliable and most satisfactory services.
Moreover, the features like filter and sorting functions give each traveller the opportunity to find the most ideal hotel room in the place of their liking. Trivago is equipped with a highly robust and strong server infrastructure, which gives the company the much-required data centre that would meet the high security standards of the Trivago, reliability as well as the flexibility. All these features give its visitors and search engines the ability to search for the direct and fast results for the hotel rooms.
Growth of Trivago and Rise in Popularity
Over the years, Trivago has developed extensively. Starting its operations from a garage, the hotel aggregator now employs approximate 5000 employees at its various offices across the world. Trivago came up with its first advertising campaign in the year of 2008-09 when majority of the travel organizations were not doing brand promotion. Trivago went on to run effective TV advertising campaigns in the country of its origin, Germany. The income earned from the brand promotion campaign was used by the Trivago to expand its operations in Europe which till date remains as one of its most popular and successful market.
The Hotel aggregator started its functions from Germany and till date it has achieved tremendous growth with presence in more than 190 countries of the world. It draws more than 120 million visitors to its platform on monthly basis and is now rated as the largest hotel search website in the world. At present Trivago analyses 900,000 hotels from more than 250 appointments destinations across the month in 33 different languages.
Over the years, the customers of Trivago have given more than 150 million hotel reviews with over 17 million photos. In the year last year itself, the hotel aggregator manged to facilitate over 14.6 million bookings including budget as well as luxury hotels. Moreover, Trivago is one of the most successful and quickly growing start-ups not in Germany but across the world, with its profits getting multiplied several times since the year 2008.
In the recent times, Trivago has emerged as one of the most successful brands in its category. As per the data, Trivago enjoys most impressive aided brand awareness over its competitors in major areas of its operations. The hotel aggregator which entered in the USA in 2012 managed to claim a 63 percent aided brand awareness mark in comparison to Expedia (80 percent). Further, owing to its branding efforts, Trivago witnessed some remarkable growth in the US market and in 6 years of its presence, it has emerged as one of the largest players in the industry.
Trivago maintains the following types of partnerships:
The organization partners with third parties that advance its contributions through their platforms (sites as well as mobile applications, and so on.) so as to guide traffic to its site. Commissions are paid per click-out (examples in which clients visit Trivago then gets in connection with the hotel booking site).
Quality Test Partners
The organization welcomes customers to assess hotel brand quality by joining as a tester through its site. In the wake of booking a reservation and finishing a stay, the testers give a survey of the office’s amenities and services utilizing an online poll. Finished questionnaires result in a motivator instalment paid by means of PayPal or bank exchange.
Trivago’s Online Revenue Model
Another quite important reason why Trivago has been developing so rapidly is due to the fact that its 59 percent of the revenue is generated via cost-per click model. The Maths is simple, when a user clicks on the link at Trivago’s platform, it gets paid in return.
Characterized by the competitive-bidding model, this revenue generation option is transparent and reliable. It means that Trivago does not have to negotiate for the commissions as the advertisers themselves compete for traffic which they get at Trivago and pay in return.
In the year of 2015, the hotel aggregator modified the business model to implement the CPC bidding at the level of property. This enabled the advertisers to opt for fine-tuning their bidding strategies and getting the choice of opting for a potential bidding option from the selected ones.
On an average, Trivago displays prices from 10 advertisers from each property that it showcases on its platform. The hotel aggregator always makes it a point to display the option with lowest price first. There is a decrease of about 19 percent in the lowest prices when compared to the percentage of the highest price.
Trivago Revenue Streams
Trivago has mainly two revenue streams –
Revenue Generated from Listings
Revenues that it basically generates from the fees paid to it by hotel booking sites for displaying their services and rooms listed on its platform.
Revenue Generated from Services
Revenue that Trivago generates as fees that it gets paid by hotel brands for basically managing their visibility as well as the presence on Trivago’s platform.
Trivago Business Model
Trivago has a business model which is multi-dimensional. It mainly has two individual customer segments that are required for the operations. That is for registering the brands that make available their services online to the consumers who simply compare the services as well as their prices to facilitate a purchase decision.
There are primarily four primary value propositions that Trivago offers, i.e. accessibility, customization, convenience, and brand/status.
The online hotel aggregator initially curates the accessibility by simply enabling its customers to make contributions to the content of their website. Further, they are motivated to add lodging brands and text descriptions. Complete missing profiles, as well as edit the profile for ensuring the quality of the content.
The website fosters customization by simply allowing the brands on its platform to personalize their user profiles. Convenience is offered by giving the visitors the facility to search for hotels rooms and compare the prices as per the brands.
Let’s discuss about the ever- growing success of Hotel Trivago –
- Initially, Trivago got the funding of one Million Euros from angel investors – Christian Vollmann and Florian Heinemann.
- In the year of 2008, Trivago decided to take help of TV advertisements to develop its business. This step was because the top management were of the view that depending entirely on Google and other search engines for business promotion can prove to be unsafe in the long run.
- In the last 11 years, Trivago has been tasting success and expanding enormously. The organization which had a funding of just €1.4 million in 2008 managed to clock a revenue of 1.035 billion by the end of 2017.
- The hotel aggregator entered the American market in the year 2012 and entered into a joint venture with Expedia, an American travel organization. Expedia acquired 61.6% stake in Trivago for US$632 million in the year of 2013 thus claiming the majority of the stock of the organization.
- In the same year, Trivago entered the Asian market with India becoming its first country of operations in the Asia.
- In the month of December 2016, Trivago achieved another milestone as it got successfully listed on the NASDAQ TRVG ticker symbol. By that time, Trivago had hired more than 1000 employees at its various offices across the world.
- The traffic on Trivago has been increasing with each passing year. And, when compared to the previous year, Trivago’s traffic expanded by 25% in the year 2018.
- Trivago’s has been acquiring large and small businesses since last few years and its most recent acquisition was TripHappy for an undisclosed amount in the month of May 2018.