Hostelworld revenue falls as Covid hits travel
ONLINE booking platform Hostelworld has said its revenue is down 69pc to €12m for the first half of this year.
The Dublin-listed company has been badly hit by Covid19 travel restrictions, with net bookings on the site down 67pc year on year, according to interim results.
This has resulted in the firm reporting an adjusted earnings before interest, taxation, depreciation and amortisation (ebitda) loss of €8.3m, a swing on the profit of €8.9m made in the same period last year.
The ebitda was in line with its previously guided range of an €8m to €9m loss.
Hostelworld says it has seen a “modest” increase in bookings in recent weeks as travel restrictions begin to ease.
The company is tracking slightly ahead of its base case scenario, which it calculated earlier this year after the global pandemic first began to impact the business.
However, its source markets in the Americas, Asia and Oceania “continue to remain very depressed”.
In June, the company raised €15.2m through the placing of and direct subscription for new ordinary shares.
It has taken a number of measures to reduce costs, the end result of which has seen operating expenditure – excluding marketing overheads – decline by a fifth in the three months to June 30.
Its cash position of €32.9m at June 30 includes cash on hand of €29.4m and a €3.5m short-term financing facility.
Hostelworld’s cash dividends for this year remain suspended, with the board instead proposing to issue new ordinary shares, by way of bonus issue to shareholders based on a value of €0.01 per share and subject to shareholder approval.
“The Covid-19 pandemic has resulted in significant trading disruption for our business and the global travel industry,” said Hostelworld’s CEO Gary Morrison. “Over the last few months we have taken the opportunity to accelerate our ‘Roadmap for Growth’ program to strengthen our core platform, completing items planned for H2 2020 and 2021 ahead of schedule.”
Looking forward, Hostelworld said there is “significant potential” to improve growth, mainly through increasing its range of experiential travel products beyond hostel accommodation. The firm handled 6.6 million net brand bookings in 2019.
Ross Harvey, analyst at Davy, said the group’s outlook statement was “encouraging”.
The company, founded by Ray Nolan, listed on the stock market in 2015.
Shares in Hostelworld were trading down just over 1pc in London yesterday.