Trivago Business Model(Case Study) How Trivago earns?

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TRIVAGO CASE STUDY

2 Minute Summary

Trivago successfully understood the typical Mentality i.e. Comparing prices on as many shops or websites before purchasing anything and then choose the one with the lowest price and good quality. The idea of Trivago was first conceptualized in the year 2005 in the city of Düsseldorf, Germany.There were three university friends – Rolf Schrömgens, Peter Vinnemeier and Stephan Stubner who was the founding members. Further, in 2006 one of the founders Stephan Stubner chooses to opt-out to become a professor, so Malte Siewert became the part of the top management team. There are 3 major Revenue streams Trivago like Revenue from Listings, Services, Affiliate partners. In 2007Trivago goes international. It went live in Spain, Italy and France. Trivago is having its head office in the region of the European Union. Trivago launched its IPO in the US on NASDAQ.Stock Symbol used for the stock market is NASDAQ: TRVG From their IPO they raised in a total of $ 287 M IPO Date –on Dec 16, 2016. Till now, Trivago has received a total of 3 funding rounds raising in a total of $55M. Full Detail in Blog.

Trivago successfully understood the typical Mentality i.e. Comparing prices on as many shops or websites before purchasing anything and then choose the one with the lowest price and good quality.

Trivago’s Business model evolves around the same.

Today we will be talking about Trivago Business Model – the gaint comparison website which allows the customers to compare hotels and rooms on various websites and hotels itself before booking.

WHATS IN IT FOR ME !!

Where did the name TRIVAGO come from?

There are many different theories explained by different people about the meaning and story behind the name Trivago.

I thought every big company has an interesting story behind the framing of the brand name.

I also tried to scrutinize it and to figure out why is it called ‘TRIVAGO’.
First, I thought it stands for  TRIp VAcation GO.
 
But this was just an assumption.

One of my very good friends works at trivago, he told me the real story behind – a creation of the name which was narrated by the CEO Rolf Schrömgens himself.

It was like, the founders had written their suggestions that had something to do with travel and trip on a wall.
Then, they picked different syllables from different words suggested and arranged them in several ways possible.

Finally, the picked up a combination of different syllables and surprisingly it was not TRIVAGO, instead it was spelt as TRAVIGO.

So, after that, they went on buying the Domain name. And eventually, it turned out that www.travigo.com was already taken and had to pay around 100 $ to buy it, which they didn’t have.

So, finally, they decided to change the name slightly to TRIVAGO and purchased the domain www.trivago.com
 

HOW TRIVAGO STARTED?

The idea of Trivago was first conceptualized in the year 2005 in the city of Düsseldorf, Germany.

There were three university friends – Rolf Schrömgens, Peter Vinnemeier and Stephan Stubner who was the founding members.
Their initial foundation was laid from the garage similar to many other start-ups.

Further, in 2006 one of the founders Stephan Stubner chooses to opt-out to become a professor, so Malte Siewert became the part of the top management team. 

Today, their Top management board consists of –
CEO     –   Rolf Schrömgens
CFO     –   Axel Hefer
COO    –  Johannes Thomas    

They started with an initial investment of just €1.4m.

Initiated by 3 friends in a garage of Germany. Soon after the commencement, trivago gained momentum and started to grow in different markets.

TRIVAGO BUSINESS MODEL

is that it gets virtually all of its revenue from the cost-per-click model. When consumers click on a link, Trivago gets paid.

There are 3 major Revenue streams Trivago has –

  • Revenue from ListingsRevenue generated from the listings includes the fees paid by the hotel booking websites for displaying their services and hotel rooms listed on trivago platforms
  • Revenue from ServicesRevenue generated from services includes the fees paid by the hotel brands for managing their listing on trivago which includes their presence and visibility.
  • Revenue from Affiliate partners affiliate earning or we can call it referral earning contributes up to 59 per cent of the total revenue is generated. Users come to Trivago platform for hotel searches, then they click on one of the hotel offers/deals displayed in the search results. Then he is redirected to the affiliate partner’s website. This Affiliate partner can be either be a hotel booking website or an individual hotel, pays Trivago a certain sum of money for each such referral.

Each affiliate partner/advertiser can determine the amount that it wants to pay for each referral redirect by bidding for advertisements on the website

In Business terminology, this model is known as the Pay-Per-Click or PPC revenue model.

EXPANSION AND GROWTH – RISE OF TRIVAGO

2005
The idea of trivago was born in the year 2005.

2006
Trivago was founded and also goes live in Germany in 2006

Also, in the same year, Chicago got its first round of funding.

The price Comparision was also born in the same year.

2007

Trivago goes international. It went live in Spain, Italy and France.

2008

Finally, they started realising profits.
In the year 2008, trivago reaches profitability.

2009
They decided to take the help of TV advertisements to develop its business.
Their first TV commercial campaign was launched in Germany and Spain.

2010

The platform trivago.com was launched in 2010.

2011

They launched some new European platforms.

2012

They stepped up in the US for the first time.

2013

Trivago goes live in Asia
Expedia acquires 62% stake in trivago through secondary purchase.

2014

Employee count goes more than 500.

2016

Now, more than 1000 employees were working under them.

They launched its NASDAQ IPO.

2017

Upgraded to more than 1200 employees

2018

They got 3.0 million+ hotels and alternative accommodations in more than 190 countries.

SWOT ANALYSIS

SWOT analysis will help you to identify Trivago’s Strengths and Weaknesses, as well as its external Opportunities and Threats.

STRENGTHS

  • Trivago’s advertising campaigns are very solid.
  • Trivago is backed by a very solid parent company.
  • It has 50 international platforms.

WEAKNESS

  • Limited product offerings, Trivago only covers hotels.
  •  limited market share & less brand loyalty

OPPORTUNITY

  • New services
  • New global markets to capture

THREATS

  • Combo packages of flight plus hotel offered by various portals
  • Intense competition.

FINANCIAL FACTS AND FIGURES

Now, let me tell you about some official facts and figures of the company.

Categories
The business model of Chicago comes into the following categories – Hospitality, Hotel, Information Technology, Marketing, Travel

Headquarters Regions
Trivago is having its head office in the region of the European Union (EU).

Founded Date
The brand was founded in the year 2005

Founders
3 founders were very good college friends –
Malte Siewert, Peter Vinnemeier and Rolf Schrömgens

Number of Employees
The company is having more than 1,609 employees.

Legal Name
The legal name for Trivago is –  trivago Gmbh

DIGITAL LINKS

I have stated some of there digital and social links for you check out.

Website                 – www.trivago.com

Facebook              – https://www.facebook.com/trivago

LinkedIn                – https://www.linkedin.com/company/trivagonv/about/

Twitter                   –  https://twitter.com/trivago

Contact Email     –  [email protected]

Trivago was acquired by Expedia for $632M on Dec 21, 2012.

IPO

Trivago launched its IPO in the US on NASDAQ

Stock Symbol used for the stock market is NASDAQ: TRVG
From their IPO they raised in a total of $ 287 M
IPO Date –on Dec 16, 2016

FUNDING TO TRIVAGO

Till now, Trivago has received a total of 3 funding rounds raising in a total of $55M

1st  round of funding was on Jan 1, 2007
2nd round of funding was on Jan 14, 2008
3rd round of funding was on Dec 1, 2010

ACQUISITIONS

Trivago have in total of 3 acquisitions

It acquired –

Base7booking.com
On March 1, 2016, Trivago acquired base7booking.com
It was not only a hotel management system but also it is a new way to manage hotels efficiently

triple
On Sep 26, 2017, the triple was also acquired by Trivago
Triple provides travel recommendations(personalized).

TripHappy
The latest acquisition of Trivago is of Triphappy on May 9, 2018
TripHappy is a travel startup that leverages AI to highlight locations and neighbourhood information.

Mobile app and its downloads

The main and the most popular app trivago has is –

Chicago: Compare Hotels & Save
The app is having almost 2,859,945 monthly downloads

Website and its monthly traffic

Trivago is ranked 1,997 among websites globally.
And having almost 29,258,861 monthly visitors. Trivago has registered 2 trademarks with the two most popular class –
Advertising and Business.

Trivago is the lead investor in only 1 company – base7booking.com

MANAGEMENT AND THE CORE TEAM

CEO (Chief Executive Officer ) –           Rolf Schrömgens 

COO (Chief Operating Officer ) –          Johannes Thomas 

CFO (Chief Financial Officer) –              Axel Hefer 

CPO (Chief People Officer) –                 Anna Drüing 

CMO (Chief Marketing Officer) –         Andrej Lehnert 

WORK CULTURE AND CORE VALUE OF TRIVAGO

The work culture of trivago states that they hire the most curious and passionate people around and follow their leads, rather than telling them what to do and how to do.

Their unique work culture is built on human learning and emotional intelligence. This is what sets them apart.

The core of this culture is their values that define their work. Let’s talk about their core Values –

– Trust

– Authenticity

– Power of proof

– Fantastic Learning

MARKETING STRATEGY OF TRIVAGO

Trivago Marketing

TV COMMERCIALS

Biggest hotel price comparison website Trivago has found a unique way to garner attention using a very clever marketing campaign.

I believe, there is hardly anyone who has not seen the simple and somehow irritating advertisements featuring the Trivago guy or girl on their Television.
More than half of Trivago’s sales owe to these advertisements featuring Trivago guy/girl in various countries including India, France and the U.S

Making it one of the biggest of its kind in the world.

BRAND AWARENESS

In 2017, Trivago decided to advertise on billboard and poster format.

Trivago doesn’t advertise themselves on Facebook. Rather, they are extremely active on Youtube and TV.

You can go through our blog on Digital Marketing and strategies for more details.

INDIAN TRIVAGO GUY – ABHINAV KUMAR

                        “Kya Kabhi aapne online hotel search kiya hai?”

This statement will immediately bring a face to your mind.
He is popular by the name Indian Trivago guy.

But do you know the real name of the Indian Trivago guy?

Abhinav Kumar is the man how has attained the identity of the Indian Trivago guy.

Every time you turn on the TV you have seen a Trivago advertisement with Abhinav Kumar.

He is not just a random guy Trivago picked up from the streets nor he is from any acting background.

He is an actual employee for the company and not just any employee.
Abhinav Kumar is the head of the department for Trivago India.

He worked for TRIVAGO

Now, you have been wondering why and how this guy went viral?

His simple and every-day appearance and a comical way to deliver the dialogue went viral.

From TV to social media, Abhinav’s face and his trolls were all over the internet.
It went across so much so that it became hard to ignore.

He was not at all offended over all the trolls and media coverage.
He often shares the memes and trolls featuring him on his social media accounts.

You can follow him on his Twitter page,
and check out his LinkedIn page as well.

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