trivago

Trivago

Industry	Travel, Hotel, Information technology, Marketing
Founded	January 2005 (2005-01) Düsseldorf, Germany
Founders	Rolf Schrömgens, Malte Siewert, and Peter Vinnemeier
Headquarters	Düsseldorf, Germany
Areas served	55 countries worldwide
Key people	Rolf Schrömgens, Malte Siewert, Peter Vinnemeier, Andrej Lehnert, Johannes Thomas
Products	Metasearch for hotel prices, Trivago Hotel Manager
Number of employees	1000
Subsidiaries	Base7booking Rheinfabrik
Website	www.trivago.com

Trivago GmbH, often referred to as Trivago, is a German multinational technology company specialized in internet-related services and products in the fields of hotels, lodging and metasearch. Trivago was the first search engine of its kind in Germany^[1] and is known to be one of the most successful startups in Germany.^[2] Ten years in, it is still one of the fastest growing companies in Germany,^[3] with profitability doubling since 2008.^[4]

Trivago was conceived in 2004 and launched in 2005^[3] by the three founders in Düsseldorf, Germany: Peter Vinnemeier, Malte Siewert, and Rolf Schrömgens.^[5] Together, they own about 40% percent of its shares.

In 2012, Expedia bought 61% of Trivago for 477 million euro.^[6] According to the media,^[7] Trivago had one of the biggest exits in German startup history. Despite the sale, Trivago still operates completely independently and funds its own growth. Forty percent of all shares are still held by the founding team. When asked about the 'exit', Schrömgens replied, "For investors who have sold their shares, it was great. We founders however still hold almost 40 percent of the company, the majority of our shares. This is because we still have a great interest in developing Trivago.".^[7]

Between creation and sale to Expedia, Trivago had only received one million euro of investors' money, including by the Samwer brothers, Florian Heinemann and Christian Vollmann.^[7] Even with relatively low funding, Trivago has managed to grow steadily, whilst still keeping their growth organic.^[7] According to Trivago Founder and Managing Director Rolf Schrömgens, "We've always tried to build a company that makes money through its own inertia...to continuously improve step by step".^[8]

Rapid growth has triggered a chain of new products and acquisitions, in addition to its core metasearch engine, Trivago Hotel Search, which operates on 55 platforms worldwide.^[7] According to Expedia, "The Trivago team built one of the largest, fastest growing and most well known travel sites in Europe, with a culture focused on developing great products, building a strong brand and promoting partners' businesses.^[4]

The philosophy at Trivago is to create a healthy & efficient working atmosphere, with a focus on personal development. They believe that when you are challenging yourself whilst growing & learning, happiness and success come naturally.^[9] The company has virtually no hierarchies or titles.^[1]

In 2016, Trivago began building its new campus, whilst simultaneously reaching milestones of 1000 employees.^[10]

History

The idea of Trivago was born in 2004 by four college friends.^[11] The founding team included Rolf Schrömgens, Peter Vinnemeier, Stephan Stubner and Malte Siewert. Trivago launched in January 2005 shortly after, Stubner resigned as Managing Director and was replaced by Malte Siewert.^[7]

The initial idea for Trivago came about while Schrömgens was co-founder at Ciao.com. Realizing how expensive content management was, he thought to rather have users manage the content themselves– with a monetary incentive for the content community. Together, Schrömgens and Vinnemeier began conceptualizing and coding the first version of trivago.^[12] Once programming began, they then realized the most interesting part was not the generation of content, but the monetization of it. This was the starting point of Trivago.^[8]

The first employees at Trivago were hired through Skype interviews from Spain, Italy and Canada. Still today, Trivago looks for individuals who exhibit the same willingness to cross borders.^[1] With a work culture à la Silicon Valley, Trivago's recruitment focus is hiring tech and business talent, with 90 percent of staff still recruited internationally.^[7]

Trivago Headquarters are located in Düsseldorf, where the international operations are conducted.^[7] In 2014, Trivago opened new offices in Leipzig and Palma de Mallorca.^[8]

In 2015, Andrej Lehnert and Johannes Thomas became part of the Managing Director team. Lehnert with his main focus on Product,^[13] and Thomas on Hotel Sales, Business Operations and Strategy.^[14]

In 2016, of the top 50 employees Trivago hired three years before, 49 were still working at the company. Additionally, many of the employees in "management" roles, began their careers at Trivago as interns.^[7] Trivago has grown 222% in employees^[15] and now employs over 1000 people.^[10]

Growth and Revenue

With less than $1M as an initial investment, Trivago has organically grown over the past nine years to nearly $500M (2015) turnover and more than $4B (2015) in market place revenue.^[15] Additionally, Trivago's profitably has doubled in revenue every year since 2008 onward.^[4]

Trivago's core European markets grew 33% in revenue on a euro-denominated basis, an acceleration of 20% compared to 2015. The top-line for the rest of the world grew 69%.^[16] Trivago's team continues to refine and improve its marketing methods and products in a way that not only benefits advertisers, but should also improve Trivago monetization margins over the long-term.^[16]

In a recent article for Expedia's 2015 Q1 Earnings, they mention Trivago as a highlight. Stating that Expedia‘s (EXPE) $632 million bet on Trivago paid off again. The online travel agency announced first-quarter (2016) results that topped estimates, due in part to the German subsidiary's 48% year-over-year growth. Trivago's revenue jumped 48% to $176 million and accounted for their second-largest chunk of revenue. Benchmark analyst Daniel Kurnos wrote, "Trivago again achieved profitability, as aggressive spending drove 48% revenue growth while still achieving 25% contribution margins in Europe and 10% contribution margins across all geographies outside of Europe," Kurnos wrote.^[17]

Funding

Trivago began looking for investors before they completed their first round of financing in 2006. Between creation and Expedia, Trivago had only received one million euro of investors' money, including the Samwer brothers, Florian Heinemann and Christian Vollmann. Schrömgens explains: "On the one hand we wanted to bring in the expertise of experienced founders on board, without relying too early on the dependence of investors".^[7] As the company continued to develop in a positive direction, the relatively low funding was apparently enough,^[7] and the balance of power reversed: Investors and companies expressed interest in rows to buy Trivago.^[18]

In 2008, Trivago received $1.14 million in Series B funding from the British company HOWZAT media LLP.^[19] At one point, Siewert stated, "All should know. We are looking for a buyer." In 2010, they sold a quarter of the company for $52.86M to a US investment fund, Insight Venture Partners, on December 1.^[20]

On December 21, 2012, Expedia bought 61.6% of Trivago in a combined cash and stock deal worth €477 million (approximately $630 million). Despite the sale, Trivago still operates completely independently and funds its own growth– with forty-percent of all shares still held by the founding team.^[7] "We run the business the same way we did prior to the Expedia deal. That is actually part of the agreement." says Malte Siewert.^[21]

Acquisitions

Rheinfabrik

Trivago acquired App product and development company, Rheinfabrik, in December 2014. Strategies align with Trivago in that Rheinfabrik does everything on site, and does not outsource any of their work. Their expertise cover quality and development of native mobile apps for iOS and Android.

Since 2012, Rheinfabrik has doubled in profits every year. Prior to the acquisition, The "Rhein Factory" developed, tested and produced apps for clients such as Mercedes, Yello Strom, the HSV and Borussia Dortmund. Despite their appeared 'exit', Rheinfabrik remains independent in their work from Trivago.^[22]

Base7booking

Trivago announced in March 2016 that it had acquired 52.3% of Cloud-PMS company, Base7booking. Founded in 2008, Base7booking has about 35 employees who joined Trivago in 2015. Trivago took majority control of the Switzerland-based company in the third quarter of 2015 but announced the move on March 1, 2016. Trivago integrated Base7booking's property management system, enabling hoteliers to manage daily operations, run reports, send invoices and enhance their digital and email marketing. Johannes Thomas, the Trivago Managing Director in charge of hotel relations, says only a minority of small and independent hotels use a property management system, and that the integration of Base7booking's PMS with Trivago's own hotel offerings will become an affordable solution for these hotels. Thomas says Trivago and Base7booking, with offices in Switzerland, Spain and Germany, will be working on plans to incentivize Base7booking property management system customers to distribute through trivago.^[23]

Business Model

"Trivago makes money from advertising partners. You cannot book with us. We are an independent information resource for travelers. We work with a wide range of industry suppliers and booking agents." Says Siewert.^[24] Money is rather earned by forwarding users to booking platforms such as Booking.com or HRS.^[7] As a hotel price comparison website, Trivago has a cost-per-click business model. Booking sites pay Trivago for the clicks that Trivago users make when selecting the offers listed. Hoteliers can also connect their rates and advertise their official website on Trivago directly through a CRS Provider, also using the CPC model.^[25]

Though the business is primarily a cost-per-click revenue model for the hotel price comparison site,^[4] Trivago also offers free and fee based versions^[14] of their Trivago Hotel Manager product, for hoteliers to manage their online presence and visibility.^[26]

Products and Features

Hotel Search

The hotel search engine was the first of its kind in Germany ^[1] and is now represented in 50+ countries.^[7] Trivago claims to be the world's largest online hotel search site, comparing rates from over 1 million hotels on over 250 booking sites worldwide. The site has integrated over 190 million hotel ratings and 14 million photos, it also claims to have over 120 million visitors per month.^[15] The site helps users to "find the ideal hotel for the best price".^[27]

Trivago Hotel Search doesn't sell anything – it aggregates hotel content from different sources, combines the results and directs you to the best place to make the booking. The site only shows prices that hotels offer on the own websites or third party booking sites, and what they're already charging if users were to visit them directly.

The technology that Trivago has in place is sophisticated – with prices changing every minute and room rates and availability varying from day to day. Trivago's search tool scans different hotel booking sites for information (prices, availability, images, reviews etc.) within seconds.^[28] When the user finds their ideal hotel, they are redirected to partner website selected to complete the booking.^[29]

Trivago App

Trivago has a free app for their Hotel Search product, available for both iOS and Android.^[30] It has a calendar-based homepage and an added feature that displays accommodation within close proximity to the user's current location. The app has interactive maps to make hotels in the visited destination easy to find.^[31]

The Trivago App has been listed in Mashable's 25 Apps to save you money,^[30] USA Today's 10 best apps for booking your stay^[32] and has been recommended on a number of international news sites, such as the Independent in Ireland as an app to save you time and money^[33] and Australia's News.com.au as one of the top apps to take on holiday.^[34]

Trivago Hotel Manager

One of the company's main priorities is Trivago Hotel Manager, a platform that offers solutions for hoteliers to manage their online presence. Thanks to 'big data', hotels and chains can get to know their customers better, and optimize visits and reservations.^[35]

The B2B product launched on April 22, 2014. It aims to provide hoteliers with all the tools and advice necessary for creating an online profile, in order to secure more bookings and increase business. This relates to hotel information, reviews and ratings, images and media, rates, active communication and direct searches. Hoteliers can also monitor their performance, such as seeing the amount of profile views, clicks and bookings they receive.

The tool has been praised for its clear layout and ease of navigation.^[36]

Hotel Manager Pro

trivago announced that its Hotel Manager platform now comes in both free and fee-based versions. The fee-based version enables hoteliers to update their listings and access analytics about their rates and competitors. Trivago states that up-to-date listings including images and amenity information, enables properties to escalate their rank on the site.^[14]

Direct Connect

Trivago also has a feature called Direct Connect, for individual hotels to incorporate their current rates and availability directly via the Trivago Hotel Manager tool, with the booking then ending up in the reservation system of the hotel.^[37]

Direct Connect highlights the ongoing transformation of online travel agencies and meta-search sites. Trivago offers hotels customizable booking engines to improve website conversion and direct sales, as well as analytics and input to improve their cost-per click campaigns.^[38] The aim is to broaden Trivago's hotel coverage by signing up more independent hotels to offer their rates on the site.^[39]

Quality Test

Trivago runs a Quality Test survey on their Hotel Search product, in which guests receive cash incentives for filling out an in-depth, detailed customer satisfaction survey.^[40]

Hotels need at least 20 Mystery Shoppers before it receives a "TESTED" badge and a drop-down menu displaying the results. According to Johannes Thomas, Quality test (Mystery Shopper), it's by far the most powerful and highest-quality feedback you can get about a hotel.^[14]

Indexes and Rankings

Trivago Rating Index (TRI)

the TRI aggregates all ratings for destinations listed on Trivago, and ranks them between 0 and 100.^[41]"It is a fully transparent and independent index that is used to classify the destination's hotels", as indicated by Trivago. It is released in more than 50 countries and involves criteria such as location, price, food, internet, room and facilities.^[42]

This algorithm used to create annual rankings and awards by Trivago, such as the Reputation Ranking,^[43] Island Ranking,^[44] Ski Ranking,^[45] the Top Hotel Awards^[46] and the Best Value Destinations (based on an algorithm combining the tRI with price).^[47]

Trivago Hotel Price Index (tHPI)

The THPI shows the average overnight accommodation prices for the most popular cities worldwide. Prices are based on the cost a standard double room, taken from over 2 million daily price inquiries. trivago stores all hotel inquiries for each month and therefore gives an overview of hotel accommodation prices for the upcoming month. The overnight accommodation prices from online travel agents and hotel chains create the average hotel prices.^[15]

Travel Advice Calendars

The company has created Travel Advice Calendars, that show the most affordable and most expensive months to visit the world's top destinations. The calendars feature 45 cities across six continents and use the tHPI to show average monthly hotel prices in a colour-coded scale, advising travelers when to book.^[48]

Marketing

The practices most heavily focused on are online marketing (SEM, display advertising), public relations and brand marketing (TV).^[49]

Trivago has a very strong track record of entering new countries using predominantly television advertising to build strong brands. According to the company, they have developed a formula, which is spend up, build up a strong brand and generally over time, these markets become profitable and you use that to reinvest into greater expansion. "Again, it's all very measured investments based upon metrics, and they've got a strong formula." - According to Expedia CEO Dara Khosrowshahi.^[50]

Trivago is also a launch partner for Facebook's new Dynamic Ads for travel brands. When Facebook expanded its Dynamic Ads product to cover travel brands, Trivago was on board as one of two of its launch participants.^[51]

The "Trivago Guy"

When the company aired its first U.S. TV advertisement in 2012, it started trending on Twitter.^[52] When their commercials hit American television, #trivagoguy became popular for his unusual look.^[53]

According to an article in Rolling Stone: "they wanted someone real, approachable and genuine. Tim Williams has inspired think pieces and fan fiction. He's the spokesperson we, as a society, have been clamoring for... Trivago Guy is the Most Interesting Man in the World".^[54] The Trivago spokesman became an unexpected celebrity. Most comments were related to his unbuttoned shirt and creepy vibe, yet some found his scruffy appearance and deep cooing voice "inexplicably sexy".

Trivago responded to the comments with humor, launching a contest that invited people to give Trivago Guy a makeover.^[55] With the rise of Trivago Guy, parodies were inspired, mixed praise was delivered all over social media, and an unexpected but welcomed gay following appeared.^[56]

According to Trivago's North American Country Manager, John Eichelberger, his allure was no accident. "The common term is 'silver fox,', There's something about him. We wanted to capture it, and I think we did a good job. People like to talk about him."

The question everyone wanted answered, why did Trivago choose not to use a belt? According to Tim, that was an accident. "Unfortunately none of the belts fit the belt loops that I had on," Williams said. "I think that was probably the best break we could have gotten.".^[52]

Following the response of the Trivago Guy, the company decided to continue with French and Spanish trivago Guys.^[52]

Company culture

Work environment

The German start-up is known for its company culture– which includes no fixed working hours, a four day surprise holiday each year and one month working in Mallorca.^[11] Something to explain why the company receives around 50,000 applicants per year.^[1]

Trivago also provides its employees free drinks, cereals, organic fruit,^[18] lunch, fitness classes, barbecues on their rooftop terrace,^[57] as well as a uniquely designed office.^[1]

"We do not think much of extrinsic motivation (extrinsic motivation is not what drives us)," says Trivago founder Rolf Schrömgens, who connects this to the importance to a pleasant working environment.^[1] He also states "It is a culture that evolves, and is very dynamic. It is important to be authentic and honest with people, and give them the freedom to try whatever they need ... I think it is important to create an environment where people trust the company, so that employees can be very efficient with effective exchange".^[8]

Employees

The average age of a Trivago employee is 28 years old^[1] and they have 63 nationalities working from their main office.

The office space has flags lining the desks showing where each employee originates from. "it is very important to ensure that everyone feels at home," says Sydney Burdick of Trivago.^[58] Because of the mix of international staff in one office, the company language is English.

Working hours

This idea of self-determined working hours is encouraged by the founders and is practiced throughout the company. The idea was conceived as a rebellion against the standard 9-5 working day that the founders believed was outdated and not productive. "This link between working hours and productivity is a product of the industrial age. Back then, people worked on an assembly line and if you worked for 4 hours, you were twice as productive as if you had of worked for 2. At some point, someone took this working model and transferred it directly to today's work environment - without considering if this model actually made sense to today's work. I don't believe it makes sense at all" says founder Rolf Schrömgens.^[59] "Therefore, fixed working hours at Trivago do not exist, explains Schroemgens, "As long as the performance is where it should be, they can decide as they like".^[7]

According to Schrömgens, if you use working hours as an indicator for performance, managers feel a sense of false security. He encourages his managers to throw-out this indicator and say 'It does not matter how long people work'.^[1]

Workflow

The belief behind this is that hierarchies only lead to the fact that information is no longer exchanged, and instead fears and reservations are constructed. "Information for us is the core of business success. We make decisions based on a high degree of objectivity and transparency" said Rolf Schroemgens.^[1]

Employees at Trivago operate with both vertical and horizontal workflows, using a model referred to as, swarm intelligence. Other aspects of the company's culture have also assisted this workflow structure- including transparent communication, allowing employees be responsible for themselves and their work, as well as a strong team spirit. "If someone from the IT department has a good idea for marketing, then he should absolutely pursue it, this is something we promote" says Schrömgens.^[60]

In order to prove that this kind of culture works, Trivago conducts 360-degree feedback reviews. According to Schrömgens "Colleagues assess each other, MDs included. One person can may be able to fool another person, but probably not 20 people".^[1]

Lack of Titles

Job titles do not exist at Trivago. As Schrömgens puts it, "As long as the performance is right, they should do as they see fit".

"I believe that when it comes to the manifestation of a 'status' title'" explains Schrömgens, "they can make you slow and inflexible. They are not needed. A title also can mean an association of power that comes with it–but if you put yourself on a level above others, perhaps you no longer hear them. We want to break this kind of asymmetrical information flow".^[7]

Offices

Office Design

The Trivago offices are designed to encourage collaboration and creativity.^[61] With colorful meeting rooms, brainstorming spaces (called think-tanks), a nap room, games room (with billiards, table football or games consoles) and a terrace where barbecues are organized.^[62]

“Our conference rooms, 'think tanks' as well as common areas, have varied themes. Some pay homage to a specific destination, others a certain topic (science, math, arts, even sewing, etc.), and each was designed to facilitate creativity and productivity.” states Jeremy Crider from the US team.^[63] For the first employees at the company, Trivago also names and themes meeting rooms after the individual's hometowns.^[15]

The offices are also designed to create a sense of healthy diversion,^[64] with amenities such as a yoga/meditation room and an indoor climbing wall.^[65]

HQ Düsseldorf

The company headquarters are still based in the same city as it was founded.^[7] Currently, the Trivago HQ is spread across three neighboring buildings: Deep Grey (in the former IBM headquarters), the Sky Office near Kennedydamm, and B1 (the former Veba Office).^[66]

Additionally, there are other offices in Palma de Mallorca, Leipzig and Amsterdam, However 90 percent of Trivago employees work from the HQ.^[7]

New Campus

On February 2, 2016, Trivago announced its plans for a global campus in Düsseldorf, to accommodate over 2000 people. The company had experienced 222% employee growth since 2012, which is why Trivago commissioned the new campus to be ready for 2018.^[15]

The six-storey, high-rise building has been designed by SOP Architekten in Dusseldorf. The building is planned to be 26,000 m² (280,000 ft2) of open space – with room to expand to fit an additional 1,500 people, in a 16-storey building next door. Some elements of the current HQ will remain, such as the creatively-themed rooms and kitchens, as well as Trivago-sponsored activities.

The new campus will be built on the docks of Kesselstraße in the Dusseldorf Media Harbour, close to the famous 'Neuer Zollhof' buildings designed by Frank Gehry. The campus will be easily accessible by public transportation as well as by bike. Dusseldorf, which came in sixth in the world on the Mercer Quality of Living Survey in 2015, is home to some of the top local restaurants, galleries and businesses in the city.^[15]

'Working-in' Palma de Mallorca

After having worked for one year at Trivago, employees have the possibility to travel (at no cost) and spend up to one month, "working-in" the company's office in Mallorca.^[57]

"'Working-in' helps to create an environment where people mingle, and have the opportunity to notice a different atmosphere. Colleagues are able to spend time together, not only at work, but also during the evenings and weekends. The feedback I get indicates that employees consider this an asset to them, and that in addition, the work does not suffer. On the contrary, things are even more efficient and productive." says Rolf Schrömgens.^[1]

Employee Benefits

Trivago provides its employees sports courses such as yoga or football at no cost,^[67] academy events ranging in topics from music to travel^[61] and regular team events, in which the individual teams spend time together in order to get to know each other.^[67]

trivago on Tour

Once a year, all full-time Trivago employees go on a four-day holiday together.^[57] The employees have been to places such as Sardinia and Croatia, and last year 700 people headed for Warnemünde by train.

"It's really important that our spirit lives on," says Schrömgens. "That's why we continue to take these 'company trips' every year... Since then, the work between departments has only been running better".^[1]

References

External links

• Official website