Hostelworld revenues rebound to 97% of pre-pandemic levels

Hostelworld, the Dublin-based hostel booking company, said on Wednesday that its revenues for the first 18 weeks of the year have rebounded to 97 per cent of levels seen in 2019, before Covid-19 struck, as millennial and Gen-Z travellers return increasingly to backpacker trails.

The pace of growth in revenues has outstripped a rally in net bookings to 73 per cent of activity recorded for the same period in 2019.

That is because business so far this year has been skewed more towards higher-cost Europe destinations than Asia, as well as the effects of bed price inflation and travellers opting, as a result of the pandemic, for longer stays in locations, chief executive Gary Morrison told The Irish Times on the day of the company's annual general meeting (agm).

Mr Morrison said he was now “more confident” about his prediction at the end of March, when the company reported its 2021 results, that Hostelworld’s net bookings would “recover towards 2019 levels” this year.

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While that forecast was couched at the time against any further escalation of the conflict in Ukraine and other unforeseen events, the chief executive highlighted on Wednesday that eastern Europe represented a “very small part” of the business, while bookings across Europe were now running at 100 per cent of activity in 2019.

That is up from a rate of about 80 per cent six weeks ago, Mr Morrison said.

“In a cluster of southern European markets, bookings are above 100 per cent,” he said.

Momentum

Hostelworld said that it was also seeing booking momentum beginning to recover from low levels in Australia, New Zealand and Asian destinations as various markets reopened for international travel.

Long-haul bookings are now running at 70 per cent of 2019, with trips from the United States and Canada into European destinations having fully recovered to pre-pandemic levels.

Shares in Hostelworld jumped almost 6 per cent in early trading in London, bringing its year-to-date rally to more than 24 per cent, against the backdrop of declining global equity markets. The stock had slumped more than 40 per cent over the two previous years.

Hostelworld recorded 1.5 million net bookings through its platform last year, level with the outturn for 2020 – and 21 per cent of the figure for 2019.

While net revenues picked up by 10 per cent last year to €16.9 million, they remained well off the 2019 level of almost €81 million.