Keeping It Simple

[eastunder]

TRVG letter to shareholders from 11-1

https://www.sec.gov/Archives/edgar/data/1683825/000168382521000044/exhibit992lettertosharehol.htm

November 1, 2021

Dear shareholders,

Over the last few months, significant progress has been made to mitigate the impact of the COVID-19 pandemic across many markets. Many countries have lifted restrictions on daily life and permitted the resumption of regular office work, schooling and even large events. Travel restrictions are also gradually being lifted, although more slowly than many had anticipated. With the reopening of the transatlantic travel routes in November, almost all relevant western travel restrictions will have been lifted, while travel within and to Asia remains heavily restricted.

Despite these positive developments, we do not expect a full rebound in travel over winter as there continues to be some uncertainty about the development of the pandemic in the Northern hemisphere over the coming months. However, for spring and early summer 2022, we expect travel demand and behavior to approach pre-pandemic levels in Americas and Europe, with a strong rebound of city and international travel in those regions. Asia is likely to lag, and we expect that the recovery in our segment Rest of World will take more time.

Trivago in H2 2021 and 2022

Significant progress with vaccination programs in many countries in Europe and the Americas has led to a noticeable recovery in our revenue in the third quarter compared to the same period in 2020, although they remain well below the levels in the same period in 2019, and the recovery trajectory flattened in October as compared to the summer month given the remaining travel restrictions.

Based on our performance in the third quarter, we have come out of summer with confidence: we believe our strategic direction is right and offers significant opportunities for 2022 and beyond. The diversification of our product offering and our revenue streams has shown early success, and we believe it will be a driving force going forward. In 2022, we plan to focus on four strategic levers across the company: (1) improve conversion and quality of our core product, (2) improve and manage customer lifetime value, (3) offer inspiration through upper-funnel products and (4) launch and scale new B2B solutions. This focus is a continuation of our strategy in 2021. We have made significant progress and have benefited from our learnings so far:

We have seen a significant improvement in our auction dynamics. In markets where travel demand has recovered strongly, advertisers became more active and increased their bids. In addition, we have seen that a growing number of advertisers are leveraging our CPA payment model to optimize their overall campaigns.

We are on track with our cloud migration and expect the migration of all live applications to be completed by year end. This will improve the overall reliability and scalability of our products.

The unprecedented impact of the COVID-19 pandemic has helped us better understand our brand marketing performance. We believe our prior television advertising campaigns continued to have a significant positive effect on direct traffic volumes, even in periods after the advertising was aired. As we significantly reduced advertising on television in 2020 and resumed such advertising at reduced levels in 2021, we anticipate that we will not benefit in the same way from prior campaigns in the next years as it had been the case in the past. As a result, we anticipate that we would need to invest in television advertising campaigns in the next years to rebuild our pre-pandemic direct traffic baseline.

During summer we have – despite the softness in city travel and the reluctance to travel among certain customers – managed to run brand marketing campaigns with good returns in a few markets, a fact that has given us reason to believe that we can profitably invest into growing our baseline from current levels over the years to come.

Our local travel product, trivago weekend, has launched packaged offers by rail and plane in first pilot markets. By adding more and more features, we are getting closer to offering comprehensive coverage of weekend travel and activities.

The first tests of our Meta-as-a-Service (MaaS) offering have been very exciting, and we are currently live with the first partners, with more in testing. Interest in the product is strong, and we believe that MaaS represents a multi-million Euro contribution opportunity in the next few years.

With progress across our different strategic pillars and full recovery in sight in some of our core markets, we are excited about next year and the opportunities for us in an ever-changing travel market.