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Trivago CEO sees potential for normalized travel by 'spring, potentially summer'

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  • TRVG

Trivago CEO Axel Hefer joins Yahoo Finance to discuss the company's recent earnings report and trends in travel amid the coronavirus pandemic.

Video transcript

- I want to go over your earnings report. Fairly strong numbers, but, as we've seen with a lot of travel companies, still not necessarily beating all of the 2019 cops-- comps. What's the story with Trivago here?

AXEL HEFER: So we are not through. I mean, that's the thing. The third quarter was significantly better than last year. And we see significant improvement through higher vaccination levels. But there is a potentially tough winter ahead of us and we think that it will take until spring, potentially summer for the travel patterns to normalize in the Western world.

- And we've seen a lot of residential ticket sales made-- not residential, excuse me-- domestic travel sa-- what I'm trying to get at-- OK, you have business travel and you also have travel for leisure. And I'm sorry that's not coming out as good as I hoped it would, but-- so leisure is fairly strong right now, as we've seen with a number of airline CEOs that we've interviewed, but the business really hasn't picked up yet. I'm just wondering what your forecast is for business travel, finally, resurging here, maybe, to pre-pandemic levels?

AXEL HEFER: Yeah, so what you see-- I mean, first of all, for both leisure and for business is that once a route is opening up, once a certain trip is possible, there is an immediate search because there is obviously a latent demand-- a pent up demand, sorry, for that specific route and then things are normalizing. For business travel, in particular, we look at it-- the following-- there are basically two kinds of business trips. One is a relationship-driven trip, which will come back very quickly. And the other one is more transaction business meeting where you do project updates, et cetera, which were, from our perspective, permanently replaced to a certain percentage by Zoom meetings, as we've now practice a slightly different way of working for almost two years.

- You run a travel site. Every jurisdiction around the globe has their own mask mandates or they don't have one-- different laws, different regulations, interpretations. I'm just wondering how you keep track of this internally and provide your customers with the service that they need to be apprised of, not only the risk-- the potential risks that they face, but also the requirements? How do you help your customers understand exactly what they need to do when they go on their trip?

AXEL HEFER: It is actually very difficult. And very, very early on in the pandemic, we teamed up with other travel companies to form the COVID travel alliance to provide exactly that information. Having said that, right now-- I mean, the bigger risk is not so much the complexity in travel as there is a bit more stability, there is a bit more structure in most countries, it is more the sudden change in restrictions or quarantine requirements. And that's why I also said at the beginning it will take a bit longer for the market to fully normalize. There is still uncertainty in the market and uncertainty from travelers about whether the regime will change on return or not.

- Well, speaking of certainty versus uncertainty and then just, kind of, weaving in the vaccine mandate story-- very controversial here in the US-- but it provides a certain level of certainty that people know that in order to go someplace, there's going to be a standard in effect and you could say the same thing about masks. I'm just wondering about how you view the situation as it's evolved here?

AXEL HEFER: It's-- I mean, from a business perspective obviously it would be best if everybody would be vaccinated. And I think also, overall, it would be best for all of us to really control the pandemic. On the other hand, I also do think it's a political question whether you do want to force people to get vaccinated and to inject certain substances into their body. And in a liberal society, I don't-- I personally don't believe that you should force people, but it is, for sure, the best measure to control the pandemic and that's why there is also-- yeah, I mean, that's why I guess there is a lot of-- there are a lot of people advocating for it.

- Yeah. And you have to think too businesses don't want to be in the business of policing people. It's an entirely different matter. But we have time for another question here. I want to give you the floor to talk about Trivago, maybe any new innovations, any new product launches, and just how you're adapting to the pandemic at this stage.

AXEL HEFER: Yeah, I mean, there are basically two key things that we have-- that we've launched since the beginning of the pandemic. One is another product, which is more local travel product, that we are now scaling in multiple markets. It's live in the US, it's life in the UK. And the other thing that we've started is that we started to offer our services also to other partners, most recently to the Huawei's Petal Search to give partners the opportunity to benefit from our scale and also our access to the most favorable rates on the internet. Both are very interesting and exciting and we are-- we think that we will benefit from the push in these two directions, also, when the market has normalized 2022 and further in the future.

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