July 4, 2022

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Hostelworld posts 2021 loss as it reports ‘strong start’ to 2022

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Dublin-based Online travel agent Hostelworld has reported a loss for 2021 as the Omicron wave dampened bookings, and warned of “new uncertainties” from the war in Ukraine.

owever, the group says it has seen a “strong start” to 2022, with net bookings and revenue continuing to recover as pandemic restrictions eased.

Adjusted earnings before interest, tax, depreciation and amortisation showed a loss of €17.3m, which was flat on 2020 as full-year net bookings were stuck at 1.5 million – the same as 2020 and just 21pc of 2019 volumes.

Net revenue was 10pc up on 2020, at €16.9m, while the net average booking value was 30pc up on 2020 at €12.11.

In a statement to its preliminary 2021 results on Thursday. Hostelworld said the recovery was down to “a favourable geographical mix, recovery of underlying bed prices and longer length of stay bookings”.

Booking cancellations were down 43pc, or 0.2m, to €3.6m, although the cancellation rate as a portion of revenue remains “elevated” Hostelworld said.

Cost per net booking was up €3.57 on 2020 levels, while marketing as a percentage of revenue increased by 22pc to 72pc. However, administrative expenses (excluding marketing) fell by 15pc to €24.2m due to “tight management of our cost base”.

Total cash at the end of December was of €25.3m, up from 2020 levels, thanks to a term loan secured in February last year.

However, the group said it was too soon to give definitive guidance for the year given the pandemic. 

There was a “strong start” to 2022, Hostelworld said in a statement, with a “consistent recovery” in weekly net bookings, revenues and direct margin as travel restrictions eased.

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While Covid-19 is easing, there are “new uncertainties” related to the effects of the Russian invasion of Ukraine, the statement said. Hostelworld has stopped bookings from Russia and Belarus.

“Whilst it is difficult to predict what the mid to long term effects of these events might be in continental Europe or further afield, we are hopeful on a humanitarian level that there will be a swift and peaceful resolution of the conflict,” the statement said.

”While 2021 was a challenging year both for Hostelworld and the global travel industry, I am pleased to say we saw a consistent recovery throughout the year in both bookings and revenue versus 2019, save for the last few weeks where we saw travel concerns over the Omicron variant,” said chief executive Gary Morrison.

“Overall, I remain confident that our loyal customer base has more desire than ever to travel and meet other like-minded travellers once restrictions are eased. The improvements we continue to make to our platform and our differentiated growth strategy mean we are well-positioned to capitalise on those opportunities as demand continues to return.”

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