Trivago, the popular travel-booking platform based in Düsseldorf, has announced its intention to distribute a special one-time dividend later this year. This news has caused an upswing in Trivago’s American depositary receipts, with the stock rising by 17% to $1.39 in premarket trading. Despite this recent increase, shares have experienced a 12% decline year-to-date.
The dividend is expected to amount to EUR184 million, approximately EUR0.53 per share, and will be instrumental in optimizing Trivago’s capital structure. This strategic move comes at a time when the online travel sector is witnessing robust growth and necessitates a shift in Trivago’s brand marketing strategy.
In line with this new direction, Trivago plans to intensify its brand marketing investments. However, this heightened expenditure is anticipated to impact profitability for the year. Consequently, Trivago has revised its projections and no longer expects to exceed adjusted earnings before interest, taxes, depreciation, and amortization of EUR70 million.
Johannes Thomas, Trivago’s Chief Executive, emphasizes the importance of keeping the brand at the forefront of travelers’ minds to achieve sustained long-term growth. He states, “We’ll employ a performance-driven approach, strategically increasing investment in areas and markets that deliver the desired impact.”
Trivago’s shift in brand marketing strategy and the announcement of the special dividend demonstrate the company’s commitment to adapting to market trends while prioritizing its future growth trajectory.