Trivago CEO Says Travel Spending Holding Up Despite Inflation – Interview

By Will Feuer

People are sticking with their summer travel plans even as inflation soars, according to Trivago NV Chief Executive Axel Hefer.

Mr. Hefer said the travel-booking platform has yet to see any signs of weakening demand through early July. “The early bookers are just booking as normal,” Mr. Hefer said. “If you’re really looking forward to your summer, you did book already.”

He sees some signs of caution beyond that. Inflation could force travelers to balk at booking last-minute trips as they scrutinize their budgets. And fall travel demand may weaken as travelers fear having their plans disrupted from a possible resurgence of Covid-19 cases.

US inflation is hovering around four-decade highs, with consumer prices in April broadly up 8.3% from a year earlier. As prices for everything from food to fuel rise, consumers are seeing their discretionary budgets for things such as entertainment and travel sapped, and companies are scrambling to adapt.

Trivago, which mostly draws low- to middle-income consumers, offers comparison-shopping tools that can help travelers manage their budgets. Mr. Hefer said consumers across all income brackets are prioritizing summer trips and cutting spending elsewhere. “There’s a significant number of trips that are just necessary because you would otherwise go crazy, or your kids go crazy, or both,” he said.

Americans are planning to travel more, with 60% saying they expect to take more vacations this year than they did during the pandemic, according to a Morning Consult survey commissioned by the American Hotel & Lodging Association. Inflation is currently a concern for 90% of survey respondents, while 78% said Covid-19 infection rates are a consideration.

Travelers are returning to some destinations that were hit hard by the pandemic, with visits to urban destinations like New York, Las Vegas, London and Paris, among others, in the cards, Mr. Hefer said. “People by now have confidence that they will have the classical city experience with food and beverage and entertainment and clubs and whatever different people are looking for when they’re traveling.”

At the same time, cross-continental travel is struggling, and the Russian war in Ukraine has hurt demand for trips to much of eastern Europe, including Germany, Mr. Hefer said. Trivago saw a decline in demand for travel to all of Europe around the start of the war, but western Europe has since normalized, he said.

Trivago said earlier this month that with Covid-19 restrictions nearly all gone, it is going on the offensive to make the most of this summer season. The company said it is planning a big marketing push to highlight its price-comparison tools.

Trivago is already seeing its sales rebound. Its first-quarter revenue came in at EUR101.6 million ($ 109.5 million), up 166% from a year earlier. It did post a loss, primarily tied to litigation in Australia.

Shares have yet to recover. American depository receipts tied to Trivago were recently trading at $ 1.74, down about 20% this year.

Write to Will Feuer at Will.Feuer@wsj.com

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