Trivago Saw Fourth Quarter Profit Decline 76% Because of Increased Competition

With competition getting more intense in performance marketing channels, Germany-based metasearch company Trivago saw its fourth quarter profits nosedive.

Trivago’s net income in the fourth quarter fell 76% to around $2.7 million (2.5 million euros) on revenue of $98.7 million (91.7 million euros), a 13 percent fall. For full-year 2023, Trivago saw a 9% revenue decline to $522 million (485 million euros) and net loss of $177 million (164.5 million euros), a 29% jump.

“Higher levels of competition in performance marketing channels continued to negatively impact our results which resulted in traffic volume declines, particularly in our Developed Europe and Americas segments,” Trivago stated about its fourth quarter financials. “These declines were partly offset by increased traffic volumes in our Rest of World segment.”

Trivago’s New Strategy

In December, Trivago launched a new brand marketing campaign globally, an effort that was part of a major strategy shift for the company. In some ways, Trivago is reverting from a performance marketing heavy strategy to tactics of several years ago, when it saturated TV with its commercials in many markets.

Trivago tied much of its full-year net loss to an impairment charge of $211 million (196.1 million) that it took in the third quarter because of a strategy shift to pour more resources into branded advertising, including TV.

In its outlook, Trivago said it expects its adjusted EBITDA to be around break-even in 2024 because of its multiyear strategy of expanded brand advertising spend. Its adjusted EBITDA for full-year 2023 was $58.2 million (54.1 million euros), a 50% decline.

Trivago’s share price rose 13% to $2.6 in pre-market trading.