Trivago Feels Scammy

We like to take a look back at an IPO like Trivago (TRVG) six months after pricing and they have a quarter or two under their belt as a public company. This is also the time that IPO share lockups come off and investors evaluate their positions.

Trivago (TRVG) came public late in 2016 and has enjoyed solid fundamentals since then (both quarters were at or above expectations) and nice stock appreciation (from the $11 IPO to $18 today.)

As a reminder Trivago is a hotel search site with no inventory or assets beyond their search algorithms and data. They are similar to Kayak which was bought by Priceline (PCLN) in November 2012 for $1.65B. However Trivago ONLY does hotels and is aiming to be the search site of choice for the entire hotel industry. They have good market share in Europe and are growing rapidly in the US.

Expedia (EXPE) owns a majority stake in Trivago which they purchased late in 2012 for $632M. At the time the deal included the “opportunity” for Expedia to buy half of the remaining outstanding shares within three years and the remainder within five years. Even with the close date in 2013 those dates are coming near.

Trivago makes money by charging hotels a subscription fee and then it’s “pay by click” on offers (not bookings.) So it’s a pure advertising model.

The trouble in the Trivago business model is “garbage in, garbage out.” Many of the listings on Trivago are actually from other aggregators like rather than hotels themselves.

It only takes an hour on the site to clicking through to displayed offers to realize the data is quite wrong. In many cases the prices were 2-3x what was quoted on Trivago. In some there were not even any rooms available on the dates selected.

The web of confusion gets more complicated when one considers that Expedia also owns,, Travelocity, Orbitz and quite a few other online travel content and booking sitesHow many times is that click generating revenue without an offer existing or a booking taking place?

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Disclosure: We do not have any vested interest in the shares of this stock at the time of writing and publication. We may however take a position post publication and are not under any obligation to ...

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