Trivago CEO Axel Hefer on Company Earnings, Summer Outlook

Axel Hefer, Trivago CEO, joined Cheddar News to this week to discuss the company's latest earnings report. The company reported a miss despite increased global travel demand. "We expect this summer to be strong despite the concerns you hear everywhere about inflation, about higher prices," Hefer said.

Closing Bell

Online hotel search platform, Trivago reported earnings after the close on Wednesday, the company did fall short of estimates on the top and the bottom lines. But despite the miss, the company is saying global travel demand on its platform continued to be robust in the first quarter after a strong 2022. Well, looking ahead to this peak summer season, the company says its monetization levels will be at the lowest levels lower levels than last year. So joining me now is axel. He first ceo of axel. Thanks so much for joining as always, what was behind these results and should investors be more optimistic? Yeah, we think that the the travel market is actually strong. Um The the first quarter has seen solid growth on our platform and we we expect actually this summer to be pretty strong despite the concerns that you hear everywhere um about inflation about higher prices. What we see is that that consumers are actually mitigating um these price increases by doing various things. I mean, the we just run a survey in the US where where more than 60% of the respondents said that they are actually comparing more prices online than they have done before. But what's even more interesting is that um that the people are not only cutting their trips slightly short, but they are also going to cheaper destinations. And so if you look at the US traveler, they are going more to Mexico in America and more to Turkey and Europe and less to Canada and the UK, so similar experience but cheaper destination. Interesting. Ok. So I guess we've talked a bit about geography there just in terms of consumers trying to save money, but in terms of sales across regions, right? A I mean, you do have a global company. Are there certain locations where you're seeing certain regions where you're seeing stronger demand than others? I think this will be the year of Asia, to be honest. Yeah, so for our travel business, um Asia is back, China is back, um Japan is back and um and, and we see there are exactly the same thing that we've experienced um in the US in Europe last year and the year before that there is a huge um pant up demand where people want to see their friends, they want to see their relatives, they want to see business partners and we expect a very strong recovery across Asia. How does that translate? Excuse me to your results? Because I do see the stock actually closed up 1.7% today, but we have seen shares under pressure of late Yeah, I mean, the summer is obviously the the the peak season. Um and that's where you will make or not make your, your annual targets. Um Most of the, the big countries that I just talked about are in the northern hemisphere. So, so they have the summer coming and, and um and the summer has not, not happened already. Um for China, we don't operate in China, but it's a very important destination for a lot of our platforms. So for South Korea, for Taiwan, for Hong Kong, Singapore, Japan as well, it's a very important destination. Japan is obviously part of this. It's a very attractive destination to travel to and also has a lot of um people that want to travel abroad. So we expect that to materialize in summer. Artificial Intelligence Axle has been a big topic of conversation on Wall Street and really across corporate America. This year, a lot of companies trying to use it to make their businesses more efficient, especially in a potentially recessionary environment. Is your company exploring A I? And if so how I mean A I has been a core part of our business. I mean, since inception, to be honest, I mean, the all the the algorithms that are basically um determining whether um whether to show one hotel or the other um which prices are, how attractive to consumers. I mean, these are all machine learning algorithms. Um The the thing that is new is, is obviously, um that, that um conversations are now much easier and that content generation can happen at a level that it was not possible before. And I think that will be particularly relevant for really content generation on websites. And that's something we are looking into, of course, but it will be even more relevant for uh websites that offer inspiration of where to travel to, when to travel to. Um And uh there will be, will be a big game changer over the, the month and the years to come.