To support the important research being done by Skift, a leading source of travel industry intelligence, trivago powered a survey for hoteliers to gather information and raise awareness about the status of direct bookings for independent hotels. The results have given the industry a clearer picture of the future of hotel distribution, and are summarised in Skift’s report “2017 Outlook on Hotel Direct Bookings” alongside interviews with eminent industry professionals. Among those interviewed was trivago Managing Director Johannes Thomas.
Our readers can now find highlights from Thomas’s exclusive interview below, condensed for length and precision.
Maybe you can talk a bit about your thoughts on the facilitated booking approach and whether trivago would go down that road of pushing this more aggressively? Also, what is that main difference between the TripAdvisor Instant Booking platform and the trivago Direct Connect functionality?
I can talk about how we think about it. Because we have a clear view on that: We want to be conceived of as a metasearch. The moment a customer thinks he has booked with trivago, or on trivago, and potentially gives us a call wanting to change or cancel his booking is the moment where we say we’ve done something wrong.
We spend hundreds of millions on TV ads to educate the market on the value proposition of metasearch and what we’re doing: providing transparency and more inventory in full view and a great search experience. And we don’t want to weaken our position as a search by providing a “book on trivago” experience. I think that’s the big difference.
You won’t see Instant Booking as an integrated part of our search. What you will see is something that’s basically the same as our usual search experience: you click out, and you land on Express Booking, which is advertiser branded. We’re going more and more in that direction. Today it’s totally advertiser branded and we want to give the hotel a white label to brand as their own. And that’s exclusively for their empowerment and to level the playing field, so they can offer a competitive booking experience.
If you look at the booking funnel of a traveler, at some point you have the access point where he starts his travel search. Then you have the search experience where he searches for a city or a destination and then for a hotel. And then he compares prices and ultimately books. We really want to be at the top of the funnel. We want to be the search brand. That’s why we spend a lot of money on branding, because we want travelers to start with us, start directly on trivago. We want to own this part, the point of access to the traveler, and then we want to excel at guiding the traveler from the unqualified intent (“I know I want to travel and maybe I want to go to this part of the world”) to finding the ideal hotel for them.
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You mentioned how important it is for hotels to consistently update their content, make sure that you have the most availability in terms of pricing and making sure their content is up to date. How much maintenance is it to manage trivago?
I think that for a technology provider, this is an essential question: How do you ensure that the hotelier can still focus on the guest experience and making guests happy, and not have to study marketing for ages? Because it’s extremely complicated. If you look at online marketing as it is today, you see it’s getting more and more complicated. How do you actually make it possible for the hotelier to manage marketing, with just a few hours’ investment initially and then maybe 30 minutes or so a week? That’s what we want to achieve.
We go to the hotel and ask, “How much does it make sense for you to invest per month?” The hotel invests the money, and trivago, we’re doing things like figuring out which countries they should buy traffic for, which is the least expensive, best-converting spot the hotelier can get. These are very sophisticated decisions that we know how to make for our performance marketing channel. We use our knowledge and do that for the hotelier.
It’s actually extremely easy for the hotelier. They don’t need to come every day, setting CPCs, changing budgets, switching campaigns on and off for different markets…. That’s something we’ve simplified.
For those properties that may not have that marketing acumen to manage CPC campaigns and would prefer to connect by CPA, and want to be on the trivago marketplace, is that an option?
No, that’s not an option. And that is exactly the point where we say, we are not a distribution channel, we are not an OTA. We are a marketing channel. And that is, yes, the more painful way to go. We could make it easy for ourselves and bring everybody on board with a CPA model. But that’s the easy route, and not the most sustainable one, because then the hotelier won’t think about their website. With CPA, you cannot send the traveler to the hotel website. You have to send them to a facilitated booking environment.
When you send travelers to your hotel website, you need to make sure that it’s in good shape, and that you have proper technology and good content. So, that’s the pressure the hotelier needs to feel and then he really takes care of his website. We do this by explaining the CPC dynamic and saying that we send you the visitor for your application to give them a good experience, providing a good setup for a good user experience. And that is what you need to provide to convert this traveler into a guest.
That’s part of the reason we want to put an incentive on getting your direct channel in shape, and not take the easy route where we act like an OTA.
Compete with booking channels
To hear Johannes Thomas speak more about trivago’s position on the booking-on-metasearch trend that’s sweeping through the hotel industry and the company’s core value proposition, take a look at the video of his interview with Phocuswright: “Johannes Thomas Talks Metasearch with Phocuswright.”