Hostelworld, the hostel booking group that targets millennial and Gen-Z backpackers, said its net bookings and revenues have picked up during the summer months after a slow start to the year.
Still, the Dublin-based group’s net bookings were flat for the first half of the year, while the net average booking value (ABV) dipped 1 per cent to €13.40 on the same period in 2024. Net revenue was also unchanged, at €46.7 million.
“Bookings and ABV improved through the first half of the year, returning to growth in late May and continuing positive momentum into June and July,” the company said.
It said that commission rates have improved since it launched its new hostel ranking system, Elevate, in May, which has offset bed price deflation and the impact of a weaker than expected US dollar.
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A spokeswoman said that the Elevate product gives hostels the flexibility to manage their inventory and visibility by paying a marginally higher commission rate. It differs from a previous, controversial product with the same name, which allowed hotels to pay extra to bump up their listings, regardless of poor customer reviews, pricing or availability.
App bookings grew 11 per cent year-on-year reflecting continued progress of its social network strategy, Hostelworld said.
[ Hostelworld shares slump amid ‘underwhelming’ trading in first half of yearOpens in new window ]
The company’s adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) fell to €7.4 million in the first half from €9.6 million. However, its closing cash position rose to €11 million from €8.2 million at the end of December.
“I am confident that the momentum generated in the first half positions us strongly to deliver on our strategic priorities and continue building the world’s leading social travel platform, creating sustained value for all our stakeholders,” chief executive Gary Morrison said.
Hostelworld said in a strategy update in April that it plans to return to paying dividends this year for the first time since before the Covid-19 pandemic, as the hostel-booking group also eyes “selective” deals to broaden its business.
It aims to return to a progressive dividend policy of 20-40 per cent of net profits, starting with an interim payment in the second half of this year.
Hostelworld said it sees full year Ebitda meeting current market consensus expectations of €21.4 million, down marginally from €21.8 million posted last year.
“Hostelworld will need a good second half to meet guidance, but it is starting to see the benefits of increased commission rates from its Elevate marketplace tool,” said Davy analyst Paul Ruddy.
The group reached an important milestone in 2023 when it repaid €28.8 million of high-cost loans drawn down from US specialist lender HPS Investments three years in advance of schedule. This was facilitated with the help of €17.4 million of much cheaper loans from AIB, all of which has since been paid back in advance of schedule.
The company also agreed with Revenue early last year to repay €9.6 million of warehoused taxes, racked up during the Covid-19 pandemic, over the next three years.
