Hotel metasearch company Trivago has announced a strategic investment as a new effort to boost conversions on the same day it reported quarterly losses for the second time this year.
Trivago announced Tuesday it has invested in artificial intelligence-driven hotel rate aggregator and white-label booking engine provider Holisto, another step in the duo’s partnership that began in 2022.
“The investment and stronger partnership will allow us to offer ‘Trivago Book & Go’ to all our advertising partners,” Trivago CEO Johannes Thomas said in a statement. “Our goal is to provide a more consistent booking experience for our users and help our advertising partners to drive conversions. Holistos’ footprint in rate optimization and price accuracy is best in class. Their team is leveraging AI to optimize rate exposure and dynamic pricing, delivering tangible value to travelers. We are impressed by their tech teams and expansion in recent years.”
As Trivago announced its new investment, the company reported total revenue for the second quarter amounted to €118.6 million, down 5 percent from €124.4 million during the same period last year. It also reported a net loss of €4.9 million compared with a net income of €5.8 million during the the second quarter in 2023. Adjusted EBIDTA was reported at a loss of €5.4 million compared with EBIDTA of €12.2 million last year.
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“The second quarter of 2024 demonstrated an improved top line year-over-year trajectory towards growth as the quarterly decline was lower than previous quarters, bringing us closer to our aim of returning to year-over-year top line growth,” Trivago said in its earnings report Tuesday ahead of its earnings call scheduled for Wednesday morning.
The company continued: “We observed revenue growth from our branded traffic channel in all three segments and are pleased with the results from our brand marketing efforts. Revenue growth from branded traffic sources helped partially offset losses driven by performance marketing channels.”
Referral revenue clocked in at € 117.2 million for the quarter, down 4% year over year from €122.6 million last year. The company saw referral revenue gains for the quarter in the Americas, which was up 5% year over year to €47.9 million. But those gains were more than offset by losses in “Developed Europe,” which came in at €47 million, a decline of 9.7% year over year. Referral revenue in the “Rest of World” category saw less than a 1% decline to €22.4 million.
Advertising spend was up for the quarter nearly 11% year over year to €95.5 million globally. Return on advertising spend was down 16% for the quarter, from €37.8 million last year to €21.7 million for the period between April and June.
Trivago said it continues to face headwinds in its performance marketing channels, a trend that began last year with Google’s advertisement format changing – and one it expects to continue for the remainder of the year. That said, the company expects its branded channel traffic revenue will help to bolster its results.
“We remain optimistic that we can return to year-over-year top line growth during the second half of the year by continuing to be disciplined and result-oriented with our marketing investment decisions,” Trivago said.
Trivago’s second quarter earnings come after the company saw a net loss year over year during the first quarter of 2024, compared with a net profit in the first quarter of 2023.
After the close of last year, the company said it was counting on its marketing spend to bolster its results.
