Hostelworld’s bottom line bolstered as demand for travel rises
Hostelworld’s operating results strengthened as travel demand recovered, but still no new shareholder dividend
- Hostelworld saw revenue increase in 2022 and average booking value increased
- The group’s net bookings reached 4.8 million in 2022, according to new preliminary results
Hostelworld revenues rebounded last year as bookings bounced back amid the easing of Covid-19 travel restrictions.
The group, based in Dublin, told investors on Wednesday that long-haul flight bookings recovered from 27 percent of 2019 levels in 2021 to 76 percent by the end of 2022.
Hostelworld’s operating loss was €13.6m (£12m), up from €33.1m in 2021. Group adjusted EBITDA profit reached €1.3m, versus a loss of €17.3m in 2021.
Travel revival: Hostelworld saw its revenue rise last year as bookings increased
The company’s net sales amounted to €69.7 million in 2022, representing 86 percent of the 2019 level and an increase of 21 percent compared to 2021.
Net bookings amounted to 4.8 million, compared to 1.5 million last year, when numerous travel restrictions remained in place in certain countries.
The group’s basic loss per share fell from 30.96 cents to 14.71 euro cents, but no dividend was paid last year.
It said: ‘Any payment of cash dividends will be contingent upon the Group’s generation of adjusted after-tax profit, the Group’s cash position, any restrictions in the Group’s banking facilities and subject to compliance with the Companies’ requirements. Act 2006 relating to ensuring sufficient distributable reserves at the time of payment of the dividend.’
The net average booking value was €14.90 in 2022, up 23 percent year-on-year, “primarily due to bed price inflation,” the company said.
At the end of 2022, the group had a cash inventory of €19 million, up from €25.3 million at the end of 2021. A refinancing process is also underway for a €30 million term loan that will help reduce borrowing costs, the group added.
Gary Morrison, CEO of the company, said: ‘2022 was the year in which Hostelworld demonstrated the resilience of its business model and ability to capitalize on market demand that returned.’
He added: ‘After a slow start to the year driven by Omicron, booking demand quickly recovered to 2019 levels in Europe (our largest destination); with many of our top markets in Southern Europe surpassing 2019 levels in the summer.”
Looking ahead, Morrison said: “I am encouraged by the trends we have seen since the beginning of the year, despite the limited visibility of our key booking period, and I believe we are well positioned and firmly on track to meet the growth targets that in our Capital Markets Day presentation in November.”
Hostelworld shares fell today and fell 1.31 percent or 1.90 p this afternoon to 143.10 p, after rising more than 124 percent in the past year.