Home news Trivago warns of weaker revenue growth

Trivago warns of weaker revenue growth

39
0

Hotel search firm Trivago has warned investors of weaker-than-expected revenue growth in 2017, due to lower spending from hotels and other travel companies.The firm said its revenue would grow 40% year-on-year, down from the 50% it predicted previously.Trivago said it had not been able to adjust its own spending in line with reduced revenue, hurting profits.The firm’s share price plunged more than 21% in morning trade.Trivago, which is headquartered in Germany, makes money by charging hotels and other travel firms for advertising linked to bookings made by Trivago users.It has been spending heavily to establish itself as a go-to travel search site, akin to a hotel-focused Google, that allows users to compare prices across different platforms.Revenues increased by more than 50% year-on-year in 2015 and 2016, but the company faces stiff competition, including from internet giants, which attract a large share of online advertising money, and non-hotel options such as Airbnb.Trivago saw a temporary revenue boost after it started charging higher rates to companies with websites that failed to meet certain standards.But most firms have adjusted to meet the guidelines, leading to lower revenue, said chief financial officer Axel Hefer. A strong euro and weaker demand for travel also hurt.Mr Hefer said increased competition from rivals might be playing a role.”I wouldn’t rule it out,” he said at a conference in New York.Trivago became a publicly traded company in late 2016. Online travel booking company Expedia has had a majority stake since 2013.Trivago lost more than 51m euros (£46.5m; $61m) in 2016, on revenue of about 754m euros.
Source: BBC