Trivago Sees the Travel Market Returning to Mostly ‘Normal’ Starting Mid-2022

Soothsaying, given the bumps of the pandemic, is overrated but after seeing some recovery during the peak summer travel season, Trivago officials envision a return to some sense of travel normality starting midway next year.

“And even though the pandemic is not over yet, it seems that things are slowly moving back to normal,” Trivago CEO Axel Hefer told investors Monday when discussing third quarter earnings. “In Europe and the Americas, most travel restrictions have been lifted.”

Turning to the great debate on whether travelers will shun cities to some extent in the future, Hefer added: “We believe that city trips will return at scale,” adding that the company, which specializes in comparative shopping for hotels but is diversifying, sees “significant opportunities” in 2022.

For the third quarter, which ended September 30, Trivago notched euro 5.5 million ($6.36 million) in net income, reversing a 2.3 million euro ($2.6 million) loss a year earlier. Revenue jumped 129 percent to 138.6 million euro ($160.6 million). That beat analysts’ expectations.

Trivago saw a significant travel recovery in the third quarter, its peak travel season, especially in Europe and the Americas, but its “rest of the world” segment, including Asia and Australia severely lagged.

In addition to focusing on improving conversions of lookers into consumers clicking on listings and making bookings, the company said it is concentrating on its travel inspiration product, as well as the sort of business to business partnerships that it announced last week with China’s Huawei.

As it tests that travel inspiration product, Trivago is trialing rail-hotel packages in Germany, Trivago-branded tours and activities in the UK in partnership with Musement, and flight-hotel packages in the U.S. All of these are relatively new for Trivago, which has mostly been a travel search engine rather than an online travel agency that handled bookings.

Hefer said the emphasis in working on these new offerings is perfecting the products, and not seeking mass adoption by customers. That would be hoped-for later.

While during the pandemic Trivago first saw the return of friends and families’ trips, and then some leisure travel, he said there had been some hesitancy about city trips, where Trivago traditionally makes most of its money. After all, many attractions in urban areas had been closed.

In the second half of 2022 in major markets, “we do expect a normal travel behavior on the leisure side,” Hefer said, acknowledging that the precise timing is difficult to predict. “Business travel will be a bit different, obviously, still.”

In an interview after the earnings call, Hefer declined to identify some of the business to business partnerships Trivago has in the works, but he said some are with travel-related or events-like businesses where the customers are price-conscious. In these partnerships, integration with a metasearch company like Trivago, which enables consumers to compare prices from many sources might make more sense than a partnership with a traditional online travel agency.

The Huawei partnership, which has Trivago powering the telecom company’s hotel search, uses a revenue share model, Hefer added.