In an effort to boost business, Trivago plans to expand its customer base to include independent hotels and other alternative accommodation types.
The decision comes as the hotel search site’s two biggest customers – Expedia and Priceline –have slashed prices on what they will pay per click.
In an interview with Reuters, CEO Rolf Schrömgens said that Trivago is “broadening the offering of hotels and accommodations, which includes all alternative accommodations.”
The Germany-based company, which is majority-owned by Expedia, earned 72 percent of its revenue from Expedia and Priceline in the fourth quarter of 2017. The rest of its profits were generated from independent hotels, hotel chains, small- and medium-size online travel agencies (OTAs) and alternative accommodations, such as vacation rentals and campsites.
However, the company showed net losses in the fourth quarter, mainly due to lower cost-per-click bids from Expedia and Priceline, as well as higher expenses and lower advertiser listings.
In addition, sites like Airbnb have brought stiff competition – not to mention that hotel chains are also boosting their websites in order to offer deals through direct bookings. Schrömgens said he has even noticed smaller independent hotels offering up cheaper pricing to customers who book directly through their websites or reservation lines.
So it makes sense for Trivago to increase its advertiser base and listings, with the goal of redirecting a greater number of users to a hotel’s website instead of to an OTA listing.
“Users can compare prices for the same hotel, which may offer different prices, to a variety of booking sites,” a Trivago spokesperson said.
Despite its fourth quarter losses, Trivago said it expected revenue to rise by between 5 and 10 percent this year. But the Motley Fool warns that the first half of the year is likely to be weak due to higher operating expenses before the site’s activity picks up in the second half of 2018.