Trivago Has Its Niche, But 'There's A Lot Of Room To Grow'

Trivago NV - ADR TRVG reported its first earnings release as a public company Monday. Adjusted EBITDA was €19.3 million versus €7.7M in the same quarter last year. Sales grew 68 percent year-over-year to €267.6 million.

Shares rose sharply, peaking at an all-time high of $21.79 before falling back to the mid-$20.00 handle.

Trivago is a German company that provides an “unbiased” and “transparent” search platform for hotel availability around the world. The company went public on December 16, 2016.

Following the Q1 results, Benzinga spoke with trivago CEO Rolf Schrömgens, who attributes the company's success to a continuous focus on hotels and accommodations. In response to whether there are plans to expand into other tourism-related sectors, Schrömgens said, "We would prefer to be great in one vertical, rather than dilute our business model and become average across multiple verticals."

A Different Kind Of Search Engine

Trivago differentiates itself from similar companies like Hotels.com and Kayak in that it is purely a search platform for accommodations, without directly booking rooms. It allows trivago independence from other search engines for traffic, an important metric for growing the brand.

"We continue to make progress in terms of improving our brand awareness, and user loyalty—and this quarter alone, we say a 60% increase in qualified referrals," said Schrömgens.

Building Additions On Their House

Trivago recognizes how global shifts in the industry impact its business and plans to capitalize on it.

Schrömgens expressed plans to embrace the growth of companies like Airbnb, incorporating alternative accommodation listings into their service. He also noted the increasing relevance of the conversation around immigration, and the positive impact it has had.

The company has plans to improve its sematic search capabilities and expand its markets in India, Japan and Russia.

"Trivago sits in a very specific position in the user journey, at the top of the funnel, where the users start their search," said Schrömgens.