Hostelworld shares fall on ‘soft’ bookings

HOSTELWORLD has said that the recent hot weather has led to a “softness in bookings” in July and August.

Davy analysts have advised of an approximately 11pc downgrade to consensus forecasts in the short-term.

In Europe, the group has seen increased competition from other online travel agents and from the “alternative accommodation sector”.

However, speaking to the Irish Independent, Gary Morrison, Hostelworld’s recently-appointed CEO, said that there had been some growth in the Asia Pacific and North American regions as a destination.

Mr Morrison said the most likely outcome for the year would be “flat bookings at group level”.

Hostelworld’s core brand now represents 96pc of group bookings.

The group said that it was continuing to deliberately focus its marketing initiatives and technology investments on its core brand, while managing the decline in the group’s supporting brands.

The group also announced the appointment of TJ Kelly as chief financial officer, with effect from November 21.

Mr Kelly is currently CFO of Glanbia’s performance nutrition division.

Adjusted earnings before interest, tax, depreciation and amortisation at Hostelworld fell 18pc year-on-year in constant currency to €9.8m in the six months to June 30.

Earnings were impacted by a change in booking options, with the group offering customers free cancellation on some bookings. This has led to deferral of some revenue, it said. Revenue at the group decreased by 3pc year-on-year in constant currency to €42.6m.

Shares were unchanged in Dublin.