Travel agents

Trivago losses narrow to €13m

Posted by Phil Davies on
Trivago losses narrow to €13m

Global hotel search platform Trivago narrowed net losses to €13 million last year from €51.4 million in 2016.

Losses were trimmed as a result of a “significant decrease” in share-based compensation expense, according to the company.

However, adjusted earnings [EBITDA] fell to €6.7 million in the full year ended December 31, 2017, compared to €28.2 million in the previous 12 months.

“Adjusted EBITDA was negatively impacted by lower levels of commercialisation on our platform, increased advertiser testing activities in the second half of 2017 as well as an increase in advertising spend,” the company said.

The company defines commercialisation as its share of the estimated booking revenues generated by advertisers from referrals.

“Increased volatility on our marketplace due to significant testing activities by our largest advertisers contributed to lower levels of commercialisation,” Trivago said.

The impact of lower levels of commercialisation and testing activities of the largest advertisers was more pronounced in Europe, contributing to a decline in referral revenue.

“A significant slowdown in our advertising spend growth also negatively impacted referral revenue growth in developed Europe,” the company added..

However, Trivago exceeded €1 billion in annual revenue for the first time following a 37% year-on-year increase.

After the technical integration of HomeAway, the firm saw alternative accommodation inventory expand to over 250,000, increasing its offering and choice for users.

The number of qualified referrals rose by 36% to 727.1 million in the full year to December 31.

Split by segment, this represents a growth rate of 36%, 16% and 75% in Americas, Europe and rest of world, respectively.

“The growth rates are primarily the result of an increased awareness of the brand and continued strong TV advertising spend as well as an increase in performance marketing spend in the first half of 2017,” Trivago said.

“In the first half of 2017, we benefitted from the positive revenue effects of the relevance assessment on our marketplace that reversed in the second half and led, amongst other reasons, to a slow-down in the year-over-year growth rates in the second half of 2017.”

Company founder and chief executive, Rolf Schrömgens, said: “The past year has been focused on building a solid foundation that we can use to execute our vision of building the best product for our users, and to further strengthen trust in our brand.

“We finished the year in line with our previously stated guidance, and due in part to marketplace volatility, gained tremendous learnings along the way.

“Having significantly increased our brand awareness, optimised our back-end structures and broadened our offering to include alternative accommodation over the course of the year, we believe we are now in the strong position to move forward.”

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