Last checked at 10 Jan 2024 07:00
LEI:213800OC94PF2D675H41
Hostelworld Group plc ("Hostelworld" or the "Group")
Full Year Trading Update for Year ended 31 December 2023
Adjusted EBITDA exceeding market guidance driven by record revenue and bookings growth
Hostelworld is pleased to provide an update on trading for the period 01 January 2023 to 31 December 2023.
Continued execution of our highly differentiated growth strategy has enabled us to capitalise on robust demand in our key markets and to grow market share, while reducing paid marketing investment to the low end of our guidance range.
Key highlights:
á Record net GMV1 and revenue2 of ?619m (+32% year on year) and ?93.7m (+32% year on year), respectively
á Net bookings totalled 6.5m (+37% year on year) and net bed-nights totalled 22.7m (+30% year on year), driven by strong growth across all regions
á Net average booking value of ?14.36, (-4% year on year), driven by a greater proportion of Asian destination bookings, partially offset by bed price inflation
á Direct marketing as a percentage of revenue2 amounted to 50%, (-8% year on year) powered by our social strategy
á FY 2023 adjusted EBITDA of c. ?18.3m exceeds the upper end of market guidance (?17.5m - ?18.0m)
á On 31 December 2023 the Group had a closing cash position of ?7.5m and a net debt3 position of ?12.3m, reflecting a further ?1.0m reduction in our drawn revolving credit facility from ?3.0m to ?2.0m
1 Net GMV is gross transaction value of bookings less cancellations
2 Revenue is gross revenue less cancellations and excludes impact of deferred revenue
3 Net debt is cash less outstanding debt, including term loan, revolving credit facility and warehoused payroll taxes
Gary Morrison, Group Chief Executive Officer, commented:
"I am very pleased to report another strong year of strategic progress for Hostelworld, which has been reflected in our results. Over 2023 we grew market share, delivered record revenues and increased operating leverage through a combination of reduced marketing spend (as a percentage of net revenue) and continued operating cost discipline to deliver EBITDA which exceeds the upper end of our guidance range. In particular, I am also pleased to report our full year marketing costs as a percentage of net revenue fall from 51% in the first half of the year to 50% on a full year basis, which demonstrates the ability of our strategy to grow market share whilst reducing marketing costs.
These results coupled with the strong cash conversion characteristics of our business model and a new facility agreed with Allied Irish Bank in May 2023, have enabled to us to strengthen our balance sheet and reduce our interest costs. As of 31st December 2023 we have repaid ?5.5M of the original ?7.5M revolving credit facility drawn down in May, with interest on the balance now charged at 2.65% over EURIBOR.
Going into 2024, we are strongly positioned to deliver against our medium-term financial commitments. We have started the new year with strong momentum and I feel very confident that we will continue our track record of continued profitable growth and value creation for our shareholders."
The Group will report its full year results for the year ended 31 December 2023 on 21 March 2024.
For further information please contact:
Hostelworld Group plc Corporate@hostelworld.com
Gary Morrison, Chief Executive Officer
Caroline Sherry, Chief Financial Officer
David Brady, Head of Commercial Finance
Powerscourt hostelworld@powerscourt-group.com
Eavan Gannon / Nick Dibden Tel: +44 (0) 20 7250 1446
About Hostelworld Group
Hostelworld Group Plc is a ground-breaking social network powered OTA focused on the hostelling category, with a clear mission to help travellers find people to hang out with. Our mission statement is founded on the insight that the vast majority of travellers go hostelling as a means to meet other people; which we facilitate through a series of Social features on our platform that connect our travellers in hostels and cities based on their booking data. To date the strategy has been extraordinarily successful, generating significant word of mouth recommendations from our customers and strong endorsements from our Hostel partners.
Founded in 1999, Hostelworld is a well-known trusted brand with 250 employees across 11 countries; hostel partners in 170 countries; and a strong commitment to building a better world in all that we do. In particular, our focus in the last few years has been on improving the sustainability of hostelling industry, through our membership of the Global Sustainable Tourism Council (GSTC); our active involvement in the Global Tourism Plastics Initiative (GTPI); our partnerships with Bureau Veritas to establish emissions benchmarks for the hostelling industry; and our recent partnership with the South Pole to be a climate neutral company in 2021 and 2022.
Disclaimer
This announcement contains forward-looking statements. These statements relate to the future prospects, developments and business strategies of Hostelworld. Forward-looking statements are identified by the use of such terms as "believe", "could", "envisage", "estimate", "potential", "intend", "may", "plan", "will" or variations or similar expressions, or the negative thereof. Any forward-looking statements contained in this announcement are based on current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by those statements. If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, Hostelworld's actual results may vary materially from those expected, estimated or projected. Any forward-looking statements speak only as at the date of this announcement. Except as required by law, Hostelworld undertakes no obligation to publicly release any update or revisions to any forward-looking statements contained in this announcement to reflect any change in events, conditions or circumstances on which any such statements are based after the time they are made.