Find your ideal hotel..For the best price.

ABOUT

TRIVAGOTrivago, is a German multinational technology company specializing in internet-related services and products in the hotel, lodging and metasearch fields. Trivago was the first hotel search engine in Germany, and is one of the fastest growing companies in Germany, with profitability doubling since 2008. Expedia, Inc. owns a majority of the company's stock.

Strong brand and its hotel network

Unique Selling Proposition

The world’s largest hotel search

Tagline

Online Travel-Flight, bus and train tickets, hotels etc

Sector

BUSINESS MODELHotel Price Comparison Website

As a hotel price comparison website, Trivago makes money from advertising partners primarily using a cost-per-click

(CPC) business model. Booking platforms, hoteliers and other providers list rates and advertise on the Trivago site, paying

for the clicks received from Trivago users.

Trivago also offers free and fee-based versions of its Hotel Manager product, which allows hoteliers to manage their online presence and visibility on the Trivago site. Trivago claims to be the world's largest online hotel search site,

comparing rates from over 1 million hotels and more than 250 booking sites worldwide. Since their majority

shareholder is Expedia, the effort is to direct bookings to their sites by way of various "adjustments" to how other sites' rates

are perceived.

HOTEL SEARCHThe Hotel Search Engine…Trivago's hotel search engine was the first of its kind in Germany and has websites in 50+ countries. Trivago claims to be the world's largest online hotel search site, comparing rates from over 1 million hotels and more than 250 booking sites worldwide. The site includes over 190 million hotel ratings, 14 million photos and over 120 million visitors monthly.

Trivago's search tool scans hotel booking sites for prices, availability, images and reviews within seconds. When users choose a hotel, they are redirected to a partner website to complete the booking.

TRIVAGO

APP…Trivago offers a free app for its Hotel Search product on both iOS and Android. In addition to the hotel search feature, the app provides interactive maps and displays accommodations in close proximity to the user's current location.

The Trivago App has been listed in Mashable's 25 Apps to save you money, USA Today's 10 best apps for booking your stay, the Independent in Ireland as an app to save you time and money and Australia's News.com.au as one of the top apps to take on holiday.

Current Location

referral revenue.

RevenueEarning ways

Commissions from hotels listed on Trivago sites, which is called

Revenue is earned when

users click

It includes fees paid by hotels for services provided

by Trivago

Subscription

Fee

TRIVAGO’S

BUSINESS MODELTrivago is a global hotel search platform. According to

Trivago, its mission is to “be the traveler’s first and independent source of information for finding the ideal

hotel at the lowest rate.” Users can access Trivago through 55 localized websites and apps (applications)

and across 33 countries.Trivago combines hotel content from various sources on

its platform. These hotels are then displayed to users based on their search criteria. Trivago also claims to help users get the best rates by providing a comparison for a

million hotels on more than 250 booking sites.However, users can’t book on Trivago; they can only choose the hotel. For booking, they’re redirected to traditional OTAs (online travel agencies) such as

Priceline (PCLN), Ctrip.com (CTRP), and Expedia (EXPE).

on a particular hotel from the

search results.

GEOGRAPHY SPLITTrivago has categorized its revenue across three geographies: the Americas, Developed Europe, and the Rest of World. For the nine months ended September 30, 2016, the Americas formed 38.2% of Trivago’s revenue, Developed Europe formed 47.2%, and the Rest of World formed 13.6%.

However, costs have been growing at a similar pace, which we’ll look at in detail in the next part of this series.

You can gain exposure to Expedia (EXPE) through the First Trust Dow Jones Internet ETF (FDN), which has 3.0% of its holdings in the company. FDN also has a 1.7% holding in rival TripAdvisor (TRIP). However, it doesn’t have any stake in archrival Priceline (PCLN), which has a stake in Ctrip.com (CTRP), China’s leading online travel agency player.

It compares hotel prices from

700,000+ hotels

Monthly close to 50 million visitors

access the site

Trivago Hotel Manager platform helps hoteliers

to enhance their business positioning, thus fostering good

relationship with hotels.

Strong backing by Expedia, which is a major name in

the travel industry

It has 50 international

platforms.

STRENGTHS…

Weeknesses1. Limited product offering.

It only covers hotels and thus, does not cater to all

facets of travel

2. Intense competition means limited market share

& less brand loyalty

Acquisition of online travel booking portals to expand its portfolio.

Increasing interest of people in travel

Tieups with more hotels can boost its presence

Opportunities…

Expansion of its portfolio to add flight, car and bus booking

facilities

Combo packages of flight plus hotel offered by various portals is

a big threat

Popularity of online travel portals erodes away a significant market

share in India.

THREATS…

IPO FILING…

01 Trivago, Expedia’s (EXPE) German-based hotel booking site, has filed for an IPO (initial public offering) in the United States.

02 It’s seeking to list its ADRs (American Depositary Receipts) on Nasdaq under the symbol TRVG.

03The IPO will be filed through a holding company called Travel BV. The company plans to raise ~$400.0 million, a placeholder amount that may change.

04Trivago plans to have two classes of shares. Class A shares, currently held by Trivago’s management, includes Rolf Schroemgens, Peter Vinnemeier, and Malte Siewert. These will be available for sale to the public under the Trivago IPO. Class B shares are held by Expedia.

05Expedia acquired a controlling stake of 61.6% in Trivago. It paid $628.0 million in cash and stock, valuing the company at ~$1.0 billion. The acquisition was in line with Expedia’s plan to expand its global presence.

TRIVAGO’S IPO JOURNEY

2017Nov 2016July 2016201520122005

Trivago was founded in Duesseldorf,

Germany, and has grown to be one of

Germany’s mostsuccessful startups of

the past decade. Duesseldorf remains

its headquarters.

Expedia bought a 61.6% stake in Trivago, paying about $628.0

million in cash and stocks. Both

Trivago and Expedia agreed to put in a put/call

window.

This date marked the

first window closure of the

put/call window,

which was postponedto March

2017.

Expedia’s CEO Dara

Khosrowshahi said the two

companies would work toward

filing a Trivago IPO

Trivago filed for an IPO.

Trivago filed for an IPO. The IPO is expected to

close.

Analyzing Trivago’s Financials:

Revenue at the Cost of Ads

Trivago’s revenue has risen an impressive 90.0% CAGR (compound annual growth rate) from 2010 to 2013. As Trivago’s markets mature, the growth rate will decline, as is evident from recent trends.Revenue rose 43.0% in 2015 to $324.6 million compared to $253.0 million in 2014. For the nine months ended in September 2016, revenue rose 38.0% year-over-year to $657.4 million.Revenues for the Americas and the Rest of the World are expected to rise at a faster pace than Developed Europe. That’s because they’re newer markets than Europe. As a result, brand awareness and penetration are already high in Europe, leading to moderate growth in the region.

Revenue Growth

BALANCE SHEET

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