Tuesday, March 22, 2022 11:45:58 AM
February 8, 2022
Dear Shareholders,
2021 is now behind us. It has been a roller coaster year. Although it has not always been easy to navigate through all these changes, we are very proud of our teams. They have remained positive and focused on solving customer problems. We have invested in upgrading our infrastructure and systems and despite a very volatile environment, have tried out new initiatives. Not every idea has worked out but that has never been our aspiration - we try out ideas to generate learnings and understand better our customers' needs. Having finished the fourth quarter on a strong note, we are very happy with our financial and operational achievements in 2021.
The start to the year was challenging as travel restrictions were in place in many countries. As travel restrictions eased and the market improved, we benefited from cost discipline and marketing efficiency gains and improved our profitability every quarter. As a result, net income improved markedly, and in the second half of 2021, Adjusted EBITDA increased even in comparison to the same period in pre-pandemic 2019. Our Adjusted EBITDA margin in the fourth quarter 2021 reached 22%, the highest since we went public in 2016.
We more than tripled our active partners for our cost per acquisition (CPA) product, helping them manage elevated volatility during the pandemic and driving higher engagement in our auction.
We successfully launched the first partnerships of our Meta-as-a-Service (MaaS) product. While still early, we believe this presents an exciting opportunity to expand our business-to-business (B2B) offering.
We generated valuable learnings through testing new verticals and our local travel product trivago weekend. This will help us to focus our efforts to expand our offering and increase value to our customers.
We took advantage of a COVID-19 subsidy program and received a €12.0 million payment from the German government in the fourth quarter of 2021. The German government provided this assistance to compensate for losses incurred in the fourth quarter of 2020 and the first half in 2021 as a result of the pandemic.
trivago in 2022
Even with high infection levels and new restrictions on daily life and travel in place, we are optimistic and excited about the year ahead of us. The virus has mutated in a way that appears to cause less severe health consequences, the share of recovered and vaccinated people is rising quickly around the world, and more and more governments are moving towards accepting COVID-19 as endemic and are taking measures accordingly. We believe that travel demand could bounce back as early as the spring of 2022 in most of our important markets. This does not mean that travel will be back to 2019 levels and patterns, though. Some segments like business travel or city trips are still lagging. In addition, the industry must deal with labor shortages as many seasonal workers found other jobs and have not returned to the hospitality sector. Consequently, it will take more time until supply and service levels are back to pre- pandemic levels. We are preparing for that and future growth in the travel industry. Key levers for the years to come from our perspective are:
Innovation: We are confident that there is plenty of space for innovation in price comparison for accommodation. We are investing both in new feature development and the improvement of our back-end systems in terms of usability, reliability and speed.
Marketing: Since the start of the pandemic, we have reduced our marketing activities and in particular cut back our brand marketing investments. We believe that travel will bounce back earlier and more sustainably in our core markets in 2022 than in 2021 and that city trips, historically one of our strengths, will catch up significantly in the recovery. We plan to use this opportunity to sustainably gain market share by investing in marketing to increase our brand baseline.
Broadening of our offering: Outside of our core product, we have explored many ideas and opportunities in the past few years. We are excited about our B2B initiatives and believe that there is substantial room to serve our business customers with a broader set of solutions. In addition, we will continue to test additional business-to-consumer (B2C) products, aiming to deliver even more value to our core customers and attracting new customers alike.
Team development: We believe that we are uniquely positioned to compete in the war for talent. Leveraging our global brand, we were able to attract many talents from around the world in 2021. We believe this will help us to further improve the quality of our teams and reach our ambitious goals for the years to come.
As we expect to see a less volatile recovery going forward, it should become easier for us to forecast travel demand. We are looking forward to investing in new features, expanded product offerings, and marketing campaigns to serve travelers around the world in 2022 and in the years to come.
https://www.sec.gov/Archives/edgar/data/1683825/000168382522000004/exhibit992lettertosharehol.htm
"Then there was a woman, a lion of a woman."
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