The Hostelworld Group has reported a return to growth in business volumes in the second half of last year, with a particularly strong rise in its flagship Hostelworld brand.
The core Hostelworld product reported a 21 per cent growth in bookings for the second half of 2016, resulting in an 18 per cent growth for the full year. With a fall in volumes in other group brands continuing, overall volumes for the group were up 2 per cent in the second half, but still 1 per cent down for the year.
In a trading update on Wednesday, Hostelworld also said it had made good progress in its mobile business, with mobile (including tablet) now representing over 49 per cent of bookings for the year, up from 41 per cent in 2015.
"Set in the context of challenging market conditions, particularly in Europe in the second quarter, I am pleased with our second-half performance and our continued momentum in the execution of strategy across mobile, pricing, geographic diversification, focused brand-marketing and a more efficient booking mix," chief executive Feargal Mooney said in a statement.
“This positions the group well to make further progress in 2017.”
Preliminary results for the year ending December 31st, 2016, will be announced on March 28th and are anticipated to be in line with the board’s expectations, the company said. “The board looks forward to announcing Hostelworld’s first full year final dividend in March, in accordance with the policy stated at the time of the group’s IPO”, the update said.
The group said its business model has continued to generate “excellent” free cash flow which contributed to a strong balance sheet at the period end.
In a note, Davy said the return to group-level volume growth in the second half of the year was the stand-out highlight from Hostelworld’s trading statement.
“In what was a difficult year for the travel space at large, we think this development will be well-received by the market,” it said.
“With 2016 in-line with expectations of flat adjusted ebitda (earnings before interest, tax, depreciation and amortisation), we are comfortable with our 2017 expectations of 8 per cent earnings growth.”
