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All of that TV advertising for Trivago, Expedia Inc.’s fastest-growing brand, appears to be paying off as the U.S. became the Germany-based hotel-shopping site’s largest market for the first time in the first quarter of 2015.
And Trivago turned a profit — $5 million in adjusted EBITDA — in the quarter, as well, although Expedia is emphasizing Trivago’s growth over recording profits.
“Of particular note, Trivago continues to gain in size and strength in the U.S., which now represents their largest market in terms of revenue generated,” Expedia Inc. CEO Dara Khosrowshahi said during the company’s first quarter earnings call last week.
In fact, propelled by an ongoing U.S. television advertising blitz, Trivago’s revenue in the first quarter jumped 43 percent to $119 million. To put that in context, Expedia Inc.’s larger and more established core online travel agency brands, including Expedia.com, Travelocity, Wotif, and Hotels.com, for example, grew at a more measured 17 percent clip.
Expedia officials believe that the ample hotel supply that the company’s online travel agency brands possess and market through Trivago make for a powerful combination.
Although Trivago now generates more revenue from the U.S. than it does from markets such as the UK and Germany, it is tough to say where Trivago’s gains are coming from.
Hotel-only Trivago could be taking some U.S. market share from Kayak, although Kayak’s revenue is heavily weighted toward flights and not hotels.
Kevin Carter, a spokesperson for TripAdvisor, wouldn’t provide any details about whether its Hotel Shopper product is feeling any adverse impact from Trivago’s gains.
“We continue to be the world’s largest travel website,” said Carter of TripAdvisor. “We aren’t going to comment on market share claims made by competitors.”
Launched in 2005, Trivago was acquired by Expedia in 2013. Trivago is known in Europe for keying its expansion based on TV advertising and that strategy is now paying dividends in the U.S, as well.