Trivago needs to build brand stickiness and craft travel experiences in order to rope in loyalists

By: |
New Delhi | Updated: September 4, 2018 12:26:07 PM

Trivago needs to build brand stickiness and craft travel experiences in order to rope in loyalists.

A majority of consumers on Trivago’s India platform are between 28-35 years, commonly from cities like New Delhi, Mumbai and Bengaluru.

What are the odds of watching television and never having come across an ad by Trivago with its distinct, prim hair and moustache-donning spokesperson Abhinav Kumar asking questions of the ‘Kya aapne kabhi hotel online search kiya hai?’ variety? Both Kumar, country head — India, Trivago and the brand’s advertising have achieved virality with high decibel campaigns. Its advertising strategy, irrespective of the target market, is to remain largely educational and leverage the value proposition that most
customers look for.

A majority of consumers on Trivago’s India platform are between 28-35 years, commonly from cities like New Delhi, Mumbai and Bengaluru. As per a Google-BCG report, the Indian travel market is expected to grow at 11-11.5% to reach $48 billion by 2020. The report notes that pricing (including deals/offers) continues to be a key driver to encourage bookings at 33% followed by good reviews at 17%. Brand specific searches stand at 10% with cancellation policy at 8%. Location, staff quality and facilities each see 6% consumer preference.

Kumar believes that despite the presence of others players in the market, the larger problem of finding an ‘ideal hotel’ remains unsolved and will continue to remain a core focus area for Trivago. India, for Trivago, falls in the Rest of World (RoW) segment, within which, Kumar informs, the most significant of revenues comes from Australia, India, Japan, New Zealand and Hong Kong.

The global story
It isn’t all fun and adventure for the Germany headquartered Trivago. Globally, 2017 saw the brand publicly acknowledge that its high voltage advertising was not in line with Return on Advertising Spend (RoAS). Recent quarter results (April-June) have seen the revenue taking a hit as it went down to 235 million euros — a decline of 21% y-o-y compared to the same period in 2017.

As remedial measures, Q2 of CY 2018 saw Trivago make ‘significant’ reductions in its ad spends. Ad spends during this period were brought down by 25% in the US, by 25% in developed Europe and by 2% in RoW. In the same period, Trivago’s selling and marketing expenses were brought down by 17% on a y-o-y basis to reach 209.8 million euros of which 92% accounted for advertising spends.

Conversely, qualified referrals (QR), which is a unique visitor per day that generates at least one referral, saw a jump in the RoW segment as these markets saw increased advertising spends in the first quarter of the year.

The brand’s advertising strategy is data driven and dynamic in nature. It has chosen to create ads in-house. “We are continuously testing the educational template for our advertising, as well as a few emotional templates,” says Kumar. “We see what the audience likes and follow their lead.”
For India, Trivago will continue focussing on personalising the search experience for consumers. This, Kumar says, need not be limited to finding the best deal but should accommodate various facilities and services as a part of the travelling experience. The company does this by matching individual traveller preferences with unique hotel characteristics such as price, location, availability, amenities and rankings, etc.

Seeking experiences
Trivago has little to no control over the actual experience a consumer will have at a property. Ujjwal Chaudhry, engagement manager, RedSeer, notes that going beyond converting the captive audience, the larger challenge for Trivago will be to create and sustain consumer loyalty. This is in addition to not being able to curate an experience. “If you book a room from say, a MakeMyTrip (MMT) and your experience is not positive at the property when you arrive, to some extent you will blame MMT as well,” he says. “MMT has, in the past, taken steps to address some of those issues. Their hotline and Assured Hotels Service is an example of that. Trivago does not have any control on the experience part.”

Filters are hygiene to online travel booking or even hotel booking in particular. To further personalise the hotel experience, Trivago aims to provide lesser common filters such as airport shuttle, gym, hairdresser, etc. AI-assisted search will play a major role in this. The company is currently testing results of this exercise across markets and may launch it in India as well.

While the macro picture for the travel and tourism industry looks promising, for online travel aggregators (OTA), direct bookings with hotels may be something they may want to lure consumers away from. KPMG-FICCI’s Expedition 3.0: Travel and Hospitality Gone Digital finds that for the large hotel chains in India, the share of direct bookings has increased from 50% to 60-65% over the last few years.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Next Stories
1New passphrase system could make online accounts more secure
2Happy Friendship Day 2018: Places to hang out with friends
3Poetry of loss: Translations of two Urdu novellas bring forth the erosion of memories of a civilisation