In February – which was just two months ago – Trivago CEO Axel Hefer noted during the company’s latest earnings call that the initial impact from the COVID-19 coronavirus was primarily felt in markets with close ties to China.
Now, COVID-19 has brought all global travel to a near standstill.
As a response to the pandemic, the Düsseldorf, Germany-based travel metasearch company changed its internal management philosophy and shifted focus on its plans for a
In an interview with PhocusWire, Hefer discusses his outlook for travel, how Trivago is preparing for the future and the role of metasearch during the recovery.
What short-term cost-cutting measures has your company implemented due to COVID-19?
The first reaction was let’s focus on the safety of our employees by moving everybody to home offices and putting the processes in place.
The second one was reducing any non-critical spending. We stopped advertising everywhere where we could.
Obviously, we don't want to promote travel in the current times, so it doesn't make sense to advertise.
With COVID-19 impacting different markets around the world, how is your company planning for each one?
It will be different market by market. On the product development side, it doesn't really have an impact on us because we run one global product.
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The right point to start to engage with the user in terms of marketing will really depend on the
point of time when the situation in the respective market will improve and when it will be the right time for us as a company with a responsibility to start to encourage people to travel.
We have also sent a letter to our customers to discourage
them from traveling. Everybody needs to be disciplined right now for this to be over sooner rather than later. We're all thinking about these different phases and then every market will enter the different phases at a different point in time.
How is Trivago preparing for a post-crisis world?
We started to really focus on what does the world look like when things are getting better.
Picturing our customer sitting in his apartment for one, two, three months. The moment in time where things are getting a bit better, what is he thinking
about? What is he looking for? How can we help him to have a better time than he has had in the last one to three months? Do we have the right product for that customer at that moment in time?
This was super helpful in this remote setup
because it gives a very clear focus. The developer teams and the data scientists are working full steam on a product pipeline that is focusing on that moment.
Obviously, we don't know exactly when that moment will be, and it will be different
by market. We tried to take a time element out of it and focused more on this one moment, no matter when it will happen.
I think that this also gave a lot of relief to the company because it helps to focus on the future rather than on the
Given that it is important for your team to be centralized in one place and one office, and now that your employees are working remotely, how is your company coping with that?
Our whole management philosophy is based on the fact that we have pretty much everybody in one office. We have very little structure and a very casual information exchange, which fosters a very creative and dynamic company culture.
done within a couple of days is moved everybody remote and we also came up with a recovery plan. What is our vision of this one moment that we talked about before and what does each team need to contribute to prepare for that moment? There's a different
approach and a bit more structure than we would normally work with.
In short, we temporarily changed our management style and adapted to the new situation. You need more structured communication if you are sitting in 1,200 offices vs. in one. And the reception by the team was very positive.
Trust and loyalty could be an industry focus post-crisis, with travelers trusting companies that they are familiar with. What do you think will be metasearch’s new role in the post-crisis world?
We have spent billions on building our brand in the past when people were moving online for the very first time. That was really where I think we are particularly at our best at attracting users.
Obviously, it's a very challenging time and a
huge tragedy. The big opportunity is that we will face this customer in a situation where he hasn't interacted with anybody for a long time. He has not been online looking for travel. He has not seen a TV commercial focused on travel. He has not thought
Unless you are very high-frequency traveler, the average traveler will be open again. And whoever has, at that point in time, the clearest and most empathetic message to that user and the best product/need/fit will have a big
advantage. That's the main driver of everything we currently do.
In the future, in terms of both product and message, where are you headed?
The key question obviously to start with is: Is it safe and will I be able to travel? Will there be travel restrictions imposed because things could get worse somewhere?
Once things are getting better, there will still be a lot of uncertainty.
Can you travel and is it safe to travel? Flexibility will be very important for quite some time. To give more transparency on the rates - are they flexible, and how flexible are they?
Picturing our customer sitting in his apartment for one, two, three months. The moment in time where things are getting a bit better, what is he thinking about?
Axel Hefer - Trivago
I think the other thing that is important is also in terms
of destination. A trip to Boston, perhaps not now, but just conceptually is much safer and much more certain than a trip to Hawaii probably. You need the air capacity; you don't know what will happen there.
If you just get into your car
and you can drive somewhere, even if it's five hours or six hours, it's much more under your control. We think that drive versus a flight will be a lot more important in the foreseeable future.
There is another element that it is unclear
how quickly capacity will be added by the airlines. This really depends on how long this will last.
It doesn't really help an airline if one country is getting better, but another isn't. They need the whole global situation to stabilize and
to improve significantly. It will also depend on the government support that they are getting to really ramp up again.
There is from a demand perspective, and a lot of uncertainty - I think - on international air travel and from a supply
perspective. It's more short-term driving, potentially even shorter trips, depending on how long this will last.
I think there is an absolute need after three months in your apartment to get out of the apartment and do at least one or two
short trips and just skip the big family vacation perhaps.