Hostelworld has announced its preliminary results for the year ended 31 December 2022.
Significant Developments
The results revealed that Hostelworld experienced the following developments:
- returned the business to profitable adjusted EBITDA;
- strong recovery in demand as Omicron impact receded and travel resumed;
- successful launch of ‘social’ strategy supporting increase in bookings through apps and reduced marketing cost;
- operating costs below FY 2019 levels, facilitated by platform modernisation;
- continued progress of ESG agenda, accredited carbon-neutral label, and independent research validating ‘hostels as a more sustainable travel option to hotels’; and
- strong start to 2023, with positive trends continuing.
Financial Highlights
The results revealed that Hostelworld experienced the following financial highlights:
- full-year net bookings totalled 4.8 million – an increase of 228%, year on year (2021: 1.5 million) – driven by recovery in Europe, and, in particular, Asia and Oceania in H2 2022;
- net GMV of €470.1 million – an increase of 303%, year on year (2021: €116.7 million);
- net revenue for the period of €69.7 million – an increase of 312%, year on year (2021: €16.9 million);
- net average booking value (ABV) of €14.90 – a 23% increase, year on year (2021: €12.11) – due primarily to bed price inflation;
- direct marketing as a percentage of net revenue amounted to 59% (2021: 76%) – reducing from 70% in H1 2022 to 52% in H2 2022 – supported by the launch of app-centric ‘social’ strategy;
- operating costs (excluding paid marketing, exceptional items, and share option charges) are below 2019 levels (-13.4%);
- adjusted EBITDA profit of €1.3 million (2021: loss of €17.3 million); and
- operating loss of €13.6 million (2021: €33.1 million).
Balance Sheet And Cash Flow
Additionally, the results revealed that Hostelworld experienced the following:
- total cash as at 31 December 2022 of €19.0 million (2021: €25.3 million); and
- refinance process under way for €30 million term loan facility, expected to be completed in 2023, which will result in lower finance costs.
Statement By CEO
Gary Morrison, chief executive officer, commented, “Twenty twenty-two [2022] was the year in which Hostelworld demonstrated the resilience of its business model and the capacity to capitalise on market demand as it returned. Most significantly, through a combination of operational progress, disciplined cost control, and the launch of our innovative ‘social’ strategy, we returned the business to profitable growth.
“After a slow start to the year, driven by Omicron, booking demand recovered quickly towards 2019 levels into Europe – our largest destination – with many of our top markets in Southern Europe exceeding 2019 levels over the summer. Easing of travel restrictions enabled Oceania and Asia to show strong recovery through the year, improving from approximately 6% of 2019 levels before reaching 79% of 2019 levels in December. Central America continued to perform strongly throughout the year, at approximately 150% of 2019 levels. Similarly, we also saw the resumption of long-haul travel throughout the year, which is especially significant, given that it is a lead indicator of customers booking multi-destination trips. More specifically, long-haul bookings recovered from 27% of 2019 levels to 76% by year end, and, in particular, booking demand from North America into Europe remained above 2019 levels for much of the post-Omicron period in the year.
“In addition, I am pleased to report on the successful launch of our differentiated social-network growth strategy in 2022, which capitalises on the unique needs and attributes of the hostelling category. Since launching these social features on our apps in Q2, we have seen strong growth in the number of bookings being made by social members – customers who have opted into the social network – with 50% of our bookings being made by social members at year end, and a significant increase in the volume of bookings through our apps. This, along with strong net booking and average booking value – ABV – growth, has translated into increased revenues, lower marketing costs, and improved margins.
“Overall, I am encouraged by the trends we have seen since the start of the year, despite limited visibility of our key bookings period, and I believe we are well positioned and firmly on track to meet the growth targets outlined in our capital markets day presentation in November.”
Read More: Hostelworld Publishes Trading Update
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