Trivago pokes at Booking Holdings to boost returning customers

German multinational technology company specializing in internet-related services and products in the hotel, lodging and meta search fields, Trivago, is in a critical rivalry with Booking Holdings, an American company that owns and operates several travel fare aggregators and travel fare metasearch engines 

In September 2018, the hotel price-comparison search company launched “significant changes” worldwide to its user interface without offering details. Executives revealed that effort during a call with investors Wednesday when discussing the company’s fourth-quarter results.

The company, majority owned by Expedia Group, aimed to keep users on its site and mobile app for longer. It debuted incremental changes that exposed visitors to more content, wooing customers to click around its site more.

The tests delay the moment when Trivago sends people over to an advertiser’s site, said CEO Rolf Schrömgens. For a big Trivago advertiser like Booking Holdings, that can be problematic.

The move underscores the delicate balance metasearch sites like Trivago must play between their own interests, and those of their advertisers.

The latest Trivago experiment reverses a longstanding policy. Until now, the general best practice of price-comparison search companies — Trivago and its rivals Kayak, Skyscanner, Qunar, TripAdvisor, and Google — has been to try to refer customers as quickly as possible to advertisers.

Schrömgens has now given his workers new marching orders. He told his team that it’s now more important to focus on attracting more repeat customers than referring as many customers as quickly to advertisers as possible.

“When we see high interaction rates, we see higher long-term retention,” Schrömgens said.

Trivago’s new delay played a role in reducing by 19 percent the unique visitors per day that Trivago referred to advertisers during the last three months of the year, compared to 2017.

Schrömgens attributed the decline to the company’s product changes along with a reduction in the number of visitors to Trivago’s platform overall during the period. The CEO said he was fine with that downward trend in referrals because higher interaction rates increased “in general” the chances customers would return to Trivago to shop.

The fourth quarter was the company’s second consecutive quarter of such a high level of year-on-year declines in the average number of qualified referrals that Trivago generated for every marketing dollar it spent, Mark May, an analyst at Citigroup, pointed out on the earnings call Wednesday. The declines coincided with the new user interface.

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