Trivago Business Model | Case Study
Hotel? trivago, Every Indian is familiar with this monologue.
With a motive to create a platform where a person can compare prices on as many shops or websites before purchasing anything and then choose the one with the lowest price and good quality.
Trivago Business model evolves around the same.
In this detailed analysis on Trivago Business Model, we’ll discuss How they created an empire worth €1.035 billion (2017), Source: Wikipedia
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.
What’s in it for me?
Where did the Trivago Name 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 that 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 friend works at trivago, he told me the real story behind – 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 spelled 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.
There initial foundation was laid from the garage similar to many other start-ups.
Further, in 2006 one of the founders Stephan Stubner choose 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 | How trivago earns?
Trivago 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 Listings Revenue generated from the listings basically includes the fees paid by the hotel booking websites for displaying their services and hotel rooms listed on trivago platforms
- Revenue from Services Revenue 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 upto 59 percent 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
The idea of trivago was born in the year 2005.
Trivago was founded and also goes live in germany in 2006
Also, in the same year trivago got its first round of funding.
The price Comparision was also born in the same year.
Trivago goes international. It went live in Spain, Italy and France.
Finally, they started realising profits.
In the year 2008, trivago reaches profitability.
They decided to take help of TV advertisements to develop its business.
Their first TV commercial campaign was launched in Germany and Spain.
The platform trivago.com was launched in 2010.
They launched some new European platforms.
They steped up in US for the first time.
Trivago goes live in Asia
Expedia acquires 62% stake in trivago through secondary purchase.
Employee count goes more than 500.
Now, there were more than 1000 employees working under them.
They launched their NASDAQ IPO.
Upgraded to more than 1200 employees
They got 3.0 million+ hotels and alternative accommodations in more than 190 countries.
SWOT ANALYSIS OF TRIVAGO:
SWOT analysis will help you to identify Trivago’s Strengths and Weaknesses, as well as its external Opportunities and Threats.
- Trivago’s advertising campaigns are very solid.
- Trivago is backed by a very solid parent company.
- It has 50 international platforms.
- Limited product offerings, Trivago only covers hotels.
- limited market share & less brand loyalty
- New services
- New global markets to capture
- 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.
Trivago is having their head office in the region of European Union (EU).
The brand was founded in the year 2005
Number of Employees
The company is having more than 1,609 employees.
The legal name for Trivago is – trivago Gmbh
DIGITAL LINKS OF TRIVAGO
Trivago was acquired by Expedia for $632M on Dec 21, 2012.
Trivago launched its IPO in US on NASDAQ
Stock Symbol used for stock market is NASDAQ:TRVG
From their IPO they raised in 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 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 BY TRIVAGO
Trivago have in total of 3 acquisitions
It has acquired –
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
On Sep 26, 2017 , tripl was also acquired by Trivago
Tripl provides travel recommendations(personalized).
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 –
trivago: 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
CMO (Chief Marketing Officer)
CPO (Chief People Officer)
CFO (Chief Financial Officer)
COO (Chief Operating Officer)
CEO (Chief Executive Officer )
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.
There unique work culture is built on human learning and emotional intelligence. This is what sets them apart.
The core of this culture are their values that define their work. Lets talk about their core Values –
– Power of proof
– Fantastic Learning
MARKETING STRATEGY OF TRIVAGO
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.
As a matter of fact, 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.
In 2017, Trivago made a decision to advertise on billboard and poster format.
Trivago doesn’t advertise themselves on facebook. Rather, they are extremely active on Youtube and on 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 actually 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 the department for Trivago India.
He worked for TRIVAG
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 dailogue 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.
Infact he often shares the memes and trolls featuring him on his social media accounts.
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