Did you ever wonder how Trivago makes Money? In this post we will discuss the revenue model of Trivago.
Trivago is a global hotel search platform which enables travelers to search for and compare hotels on the basis of price and other relevant metrics. Trivago shows users the different prices offered for the same hotel by different websites allowing them to book hotels at the lowest price available online.
The Revenue Model of Trivago.
Trivago makes money through two channels:
- Referral Revenue (a.k.a Affiliate Marketing)
- Subscription Fees i.e Hotel Manager Pro
We will discuss each of these revenue sources in details.
Trivago earns most of its revenues through referrals. This this how they make money:
A user searches for hotels on the Trivago platform, clicks on one of the hotel offers/deals displayed in the search results and is referred to the advertiser website. This advertiser, which may either be a travel booking website or a hotel, pays Trivago a certain sum of money for each such referral.
Each advertiser determines the amount that it wants to pay for each referral by bidding for advertisements on the marketplace. Trivago operates a marketplace where advertisers can submit bids for each user click on an advertised rate for a hotel. By clicking on a given rate, that user is referred to that advertiser’s website where the user can complete the booking. In advertising terminology, this is known as the Cost-Per-Click or CPC revenue model.
The advertisers on Trivago can be categorised into the following 3 groups:
- Online Travel Agencies (OTA): Both large brands like Expedia and smaller reagional agencies.
- Hotel chains, including large multi-national hotel chains and smaller regional chains; and
- Individual Hotels.
2. Subscription Fees
Trivago also offers a value added service to Hotels listed on their platform with the Hotel Manager Pro feature. This feature allows Hotels to edit listings by adding hotel description and other relevant information, add high quality images, gain access to visitor profiles for more targeted promotions and get rate insights through competition data analysis. Trivago charges Hotels a subscription fees in exchange of these services.
This is how Trivago makes money. Thanks for your time.