Business Model of Trivago – How does Trivago make money?

Founded in the year 2005, Trivago offers online services and products related to hotels and lodging. The business model of Trivago revolves around Travel, Information technology, Hotel, and Marketing industry.

In this post, we will decipher the business model of Trivago and understand how it became one of the most popular Hotel Search Engines around the world. We will also be going through different revenue streams of the company that help Trivago make good money. Let us start the journey of Trivago business model with its introduction –

Introduction to the Business Model of Trivago

Founded by Rolf Schrömgens, Stephan Stubner, Peter Vinnemeier, Malte Siewert; Trivago is the first German hotel search engine company. It specializes in internet-related products and services in hotels and lodging.

It is a price comparison platform where hotels and brands advertise and list their offerings. Trivago charges them based on the Cost-Per-Click (CPC) model.

It also offers free and paid versions to brands to promote their offerings on Trivago’s platform.

Trivago offers products and features such as hotel search, Trivago app, Trivago hotel manager, hotel manager pro, and rate connect. Trivago also has several indices and rankings such as Trivago Rating Index (tRI), Travel advice calendars, and Trivago Hotel Price Index (tHPI).

Trivago markets itself in the lowercase format as ‘trivago’.

Different products and features comprised by Trivago Business Model are-

1) Hotel Search

Hotel Search Site of Trivago is spread in 50+ countries around the world. Being the largest online hotel search site, it compares more than 1 million hotels and 250 booking sites around the world.

2) Trivago App

The hotel search product of Trivago is also available in the form of applications for Android and iOS devices.

3) Trivago Hotel Manager

It is a B2B platform of Trivago that enables hoteliers for marketing their features and facilities on the Trivago platform.

4) Hotel Manager Pro

It is a fee-based version of the Hotel Manager platform of Trivago that lets hoteliers customize and update their own listings, plus access analytics about the competitor rates.

5) Rate Connect

By using this feature of Trivago, hotels can update their availability and current rates by using Trivago Hotel Manager Tool.

Now, after being aware of the introduction to the business model of Trivago, let us take a brief look at the history of Trivago.

A Brief History of Trivago Business Model

Rolf Schrömgens co-founded a shopping website known as Ciao but, after some time, he realized that it is costly and inefficient to maintain the content of a brand online.

So, he collaborated with three other college friends to create a platform that will enable brands to manage their content themselves, in a more cost-efficient manner. This is how Trivago came into being.

Today, Trivago has more than 1,600 employees and is one of the fastest-growing companies in Germany.

Key subsidiaries of Trivago are Base7booking, Rheinfabrik, and TripHappy.

Working in Trivago business model is quite smooth, well organized, hassle-free, and personalized as per the inclinations of its target base. In the next section, let us have a look upon how the working of Trivago proceeds-

Business Model of Trivago: How does Trivago work?

To understand the business model of Trivago, we will look at the business model canvas of Trivago. There are different elements whose adept conglomeration helps Trivago function in a profit-driven manner.

Let us have a look upon those elements here and now-

Key Elements upon which Business Model of Trivago Depends Upon

The business model of Trivago covers four key propositions:

1) Availability

Trivago shows availability by being open to clients and allowing them to add to their website’s substance. They can add content related to missing brands, unfinished profiles, depictions of brands, etc. They can also affirm quality by altering patterns.

2) Accommodation

Trivago allows customers to make a judgment about brand costs. They can also filter items using the criteria available on the website.

3) Customization

Trivago offers customization by allowing brands to customize their profiles. This helps brands to attract relevant customers and customers to find what they want quickly.

4) Brand/Status

Trivago has built a successful brand for itself because of everything it has to offer. It gives information from more than 250 destinations, 55 markets, 33 dialects, and 100 hotel networks. Its clients have given multi-million hotel surveys and photographs.

Now, the next thing that plays a significant role in Trivago Business model is the customer segment of Trivago, so let us have a look upon that as well-

Customer Segment of Trivago Business Model

The business model of Trivago has two customer segments. The first segment includes brands and hotels that advance offer to the customers, while the second segment includes the customers who diverge from the costs and the offerings and ask what they need.

Customer segment can also be divided into two other forms-

1) Partners

It includes hotels, media, and online travel agencies.

2) Guests

It comprises of travellers who prefer online booking, business travelers and those who prefer getting the best online booking deals through comparisons.

Channels used by Trivago Business Model

Trivago markets itself through its website. It advances what it has to offer through social media pages. It also uses TV and web-based marketing to showcase itself.

The mobile app is also very crucial in channelizing the Trivago business model.

Customer Relationships used by Trivago Business Model

Trivago maintains its relationship with the customers with the help of its website. It regularly answers the queries made by the customers on the site. Though it offers constrained interaction with the representatives, it adds the required individual element whenever necessary.

For adept channelization of Customer Relationship, Trivago opts for following ways of the customer relationship-

• Social media
• Customer Service
• Trivago Hotel Manager
• Reviews, Feedback and Rating System

1) Key Activities

Trivago acts as a stage for brands/hotels to showcase their offerings and for customers to find what they want. It uses its website and application as the stage. Its activities can further be categorized as-

• Product Development and Management
• Manage Guests Networks
• Sales and Marketing
• Manage Hotel Networks

2) Key Partners

The business model of Trivago includes two key partners-

1. Subsidiary Partners:

Trivago works with third parties that showcase their offerings on Trivago’s website.

2. Test Partners:

Trivago allows customers to act as analyzers to assess the quality of services. These customers give an audit of the services such as luxuries, administrations, etc. by providing a survey. Customers get rewards for filling such surveys.

This acts as a motivation for the customers and enables Trivago to get more feedback to enhance the customer experience.

In a more general manner, you can understand partners of Trivago Business Model as-

• Hotels
• Guests
• Media and Advertising Companies
• Online Travel Agencies
• Investors and Shareholders
• Payment processors

3) Key Resources for channelization of Trivago Business

Trivago’s website and application are the main assets of the company. These assets act as stages that serve millions of clients. The client support staff is the other crucial resource that helps to maintain and keep up the website and application.

In simpler fashion, you may understand the resources of Trivago as-

• Skilled Employees
• Technological Platform
• Information Database

Cost Structure of Trivago Business Model

The biggest cost driver for Trivago is the advertising cost. Other costs include exchange costs, client bolstering costs, and operating costs. Trivago uses robotization to lower costs.

Other key factors of Trivago Cost Structure are-

• Salaries to employees
• Technological Setup and Running Costs
• Selling and Marketing Strategies and their Implementation

Now, after knowing all this about the business model of Trivago, the next thing that is important for you to know is how Trivago makes money. Let us understand that here as well-

Revenue Streams – How does Trivago Make Money

The business model of Trivago generates revenue by using three different revenue streams:

Listing fee: This is the fee paid by hotels and brands to get their services listed on Trivago’s platform.

Subscription fee: Trivago lets the hotels and brands to edit their profiles and add relevant information regarding their offerings. This helps them to target customers in a better way. Trivago charges subscription fees for these services.

Referral revenue: This is the biggest revenue generator in the business model of Trivago. This revenue comes from individual hotels, hotel chains, and Online Travel Agencies (OTA). A customer is referred to the website of the advertiser when the user clicks on the deals present in the search results. Trivago charges money for every referral. This model is known as the Cost-Per-Click (CPC) model.

So, Cost per Click or Cost per Acquisition is also an important means through Trivago makes money. In addition, the use of the Trivago platform by hotels and businesses for advertising and media also helps Trivago make good money.

This was all about the revenue generation means of Trivago business model. Now in the last section, we will be uncovering the hidden layers of the marketing strategy of Trivago that helps the company widen its reach and optimize its audience base-

Marketing Strategy of Trivago Business Mode

The business model of Trivago focuses on brand marketing, public relations, display advertising, and Search Engine Marketing (SEM). It also uses Facebook’s dynamic ads for advertising. Two of the key strategies used by Trivago for marketing are-

1) The Trivago Guy

This is the most successful marketing strategy used by Trivago. The Trivago Guy became an internet sensation due to its unusual looks.

Trivago employs real, approachable, and genuine actors to act as the Trivago Guy. Due to its initial success, Trivago also invited people to give a makeover to the Trivago Guy. This gave rise to fan fiction, parodies, and a huge gay following.

2) The Trivago Girl

After the success of the Trivago Guy, Trivago also started to use the Trivago Girl to advertise its services.

Wrapping it up!

With over 120 million site visitors per month, 190 million hotel ratings, 250 booking sites, 14 million photos, rate comparison in over 1 million hotels, and websites in more than 50 countries; Trivago is one of the most significant hotel search engines.

It is rapidly moving forward to become the most relevant and ideal source of information to find hotels at the lowest rates.

The business model of Trivago is highly efficient in penetrating audience bases to optimize its reach and have the most loyal customer base. What are your thoughts about the Trivago business mode?

Do you find the business model of Trivago inspiring? Share your thoughts with us in the comments.

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