REG - Hostelworld Grp PLC - Publication of Annual Report and Notice of AGM
02/04/2024 13:30
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RNS Number : 9928I Hostelworld Group PLC 02 April 2024
LEI: 213800OC94PF2D675H41
2 April 2024
Hostelworld Group plc
("Hostelworld" or the "Company")
Publication of Annual Report for 2023 and Notice of 2024 Annual General
Meeting
Annual Report and Accounts
Hostelworld, the world's leading hostel-focused online booking platform, is
pleased to announce that its Annual Report 2023 has been posted or is being
made available to shareholders today.
Annual General Meeting
The Company confirms that its Annual General Meeting will be held at 12 noon
on Thursday 2 May 2024 at the offices of the Company, Charlemont Exchange,
Charlemont Street, Dublin 2, Ireland. A Circular, containing the Chairman's
Letter and Notice of 2024 Annual General Meeting, and a Form of Proxy have
also been posted or are being made available to shareholders today.
Documents available for inspection
The following documents:
· Annual Report 2023;
· Circular containing the Chairman's Letter and Notice of 2024
Annual General Meeting; and
· Form of Proxy;
have been submitted to the Financial Conduct Authority via the National
Storage Mechanism, and the Irish Stock Exchange (trading as Euronext Dublin),
and will shortly be available for inspection at the following locations:
National Storage Mechanism:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism)
and:
Euronext Dublin:
Companies Announcements Office,
Euronext Dublin,
28 Anglesea Street,
Dublin 2
and https://direct.euronext.com/#/oamfiling
The Annual Report 2023 has also been filed with the Central Bank of Ireland.
The Annual Report 2023 (ESEF compliant format), the Circular containing the
Chairman's Letter and Notice of the 2024 Annual General Meeting and the Form
of Proxy are available on the Company's website at www.hostelworldgroup.com
(http://www.hostelworldgroup.com) .
Regulated Information
In accordance with DTR 6.3.5(1A), the unedited full text of the regulated
information required to be made public under DTR 4.1 is contained within the
2023 Annual Report which has been uploaded to the National Storage Mechanism
and is available on the Company's website www.hostelworldgroup.com
(http://www.hostelworldgroup.com) .
The information set out in the Appendix, which is extracted from the Annual
Report 2023, is included for the purposes of complying with Regulation
33(5)(b)(ii) of the Irish Transparency Regulations 2007 (as amended) and its
requirements on how to make public annual financial reports. The information
in the Appendix should be read in conjunction with the Company's preliminary
results for the year ended 31 December 2023 released on 21 March 2024 which
can be viewed at www.hostelworldgroup.com (http://www.hostelworldgroup.com) .
Together, these constitute the material required by Regulation 33(5)(b)(ii) to
be communicated in unedited full text through a Regulatory Information
Service.
Contacts:
Hostelworld Group plc
John Duggan, General Counsel & Company Secretary
Tel: +353 (0) 86 022 3553
Appendix:
Directors' Responsibilities Statement
The Directors are responsible for preparing the Annual Report and the Group
and Company Financial Statements, in accordance with applicable law and
regulations.
Company law requires the Directors to prepare financial statements for each
financial year. The Directors are required to prepare the Group financial
statements in accordance with UK-adopted international accounting standards
and applicable law. The Directors have also elected to prepare the Group
financial statements in accordance with International Financial Reporting
Standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in
the European Union and to prepare the parent Company financial statements in
accordance with FRS 101 Reduced Disclosure Framework (the "Relevant Financial
Reporting Framework") and applicable law. Under company law the Directors must
not approve the financial statements unless they are satisfied that they give
a true and fair view of the assets, liabilities and financial position of the
Group and Company and of the profit or loss of the Group for that period.
In preparing the Parent Company Financial Statements, the Directors are
required to:
· Select suitable accounting policies and then apply them consistently;
· Make judgments and accounting estimates that are reasonable and
prudent;
· State whether Financial Reporting Standard 101 Reduced Disclosures
Framework has been followed, subject to any material departures disclosed and
explained in the financial statements; and
· Prepare the financial statements on the going concern basis unless it
is inappropriate to presume that the Company will continue in business.
In preparing the Group Financial Statements, International Accounting Standard
1 requires that Directors:
· Properly select and apply accounting policies;
· Present information, including accounting policies, in a manner that
provides relevant, reliable, comparable and understandable information;
· Provide additional disclosures when compliance with the specific
requirements in IFRSs are insufficient to enable users to understand the
impact of particular transactions, other events and conditions on the Group's
financial position and financial performance; and
· Make an assessment of the Company's ability to continue as a going
concern.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the financial statements comply with the Companies
Act 2006. They are also responsible for safeguarding the assets of the Company
and hence for taking reasonable steps for the prevention and detection of
fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Legislation in the United Kingdom governing the preparation and dissemination
of financial statements may differ from legislation in other jurisdictions.
Responsibility Statement
We confirm that to the best of our knowledge:
· The Group Financial Statements, prepared in accordance with IFRS as
adopted by the European Union and the Company financial statements prepared in
accordance with FRS 101 Reduced Disclosure Framework, give a true and fair
view of the assets, liabilities, and financial position of the Group and
Company as at 31 December 2023 and of the profit or loss of the Group for the
year then ended. The Strategic Report includes a fair review of the
development and performance of the business and the position of the Company,
and the undertakings included in the consolidation taken as a whole, together
with a description of the principal risks and uncertainties that they face;
and
· The Annual Report and Financial Statements, taken as a whole,
provides the information necessary to assess the Group's performance, business
model and strategy and is fair, balanced and understandable. It also provides
the information necessary for shareholders to assess the Group's position and
performance, business model and strategy.
This responsibility statement was approved by the Board of Directors on 20
March 2024 and is signed on its behalf by:
John Duggan
Company Secretary
20 March 2024
Principal Risks and Uncertainties:
Introduction to Group Risk Register
Our business model and results are subject to risks and uncertainties which
could adversely affect our business, financial stability, and cash flows. Risk
is an inherent factor. While demand for hostelling returned in strength post
the impact of COVID-19, inflation, cost of living and geopolitical tensions
are new risk factors which can impact demand. We also recognise, in
particular, that climate change poses a number of physical and
transition-related risks for our business.
The most material risks and uncertainties impacting the business are listed on
below, together with comments on how they are managed to minimise their
potential impact. The table is not prioritised nor an exhaustive list of all
risks that may impact the Group. Individually or together, these risks could
affect our ability to operate as planned and could have a significant impact
on revenue and shareholder returns. Additional risks and uncertainties,
including those that have not been identified to date or are currently deemed
immaterial, may also, individually, or together, have a negative impact on our
revenue, returns, or financial condition.
Each risk identified is subject to an assessment incorporating the likelihood
of occurrence and potential impact on the Group. The Group's Risk Register
identifies key risks including any emerging risks, and monitors progress in
managing and mitigating these risks. Emerging risks are identified from areas
of uncertainty, which may not have a significant impact on the business
currently but may have the potential to adversely affect the Group in the
future. No new emerging risk was identified in the current year.
Risk Responsibility
The Board takes overall responsibility for identifying the nature and extent
of the risks to be managed by the Group to ensure the successful delivery of
its strategic and business priorities. The Audit Committee monitors certain
risk areas and the internal control system, as set out in the report on
governance. The Board and Audit Committee conduct a formal half-year and
full-year review of the risk register, which also incorporates the Task Force
on Climate-Related Financial Disclosures ("TCFD") Risk and Opportunities
Register. In their review proactive attention is given to key risks where the
probability of occurrence and extent of impact are elevated by the
consequences of the ongoing geopolitical conflict in Ukraine and the Middle
East, and the deteriorating global economic outlook.
Risk Identification
The Group's Risk Register process is based upon a standardised approach to
risk identification, assessment, and review with a focus on mitigation. There
is input across all levels of the business to enable the Group to remain
responsive to the ever-changing operating environment, including the impact
that social features can bring, the consequences of the ongoing war in Ukraine
and geopolitical tension, climate change, rising cost of living, and the
general macroeconomic conditions including rising interest and inflation
costs.
From the bottom-up, risk is identified and mitigated at a business unit level
by the executive management team, functional leads, their teams, and subject
matter experts including the Data Protection Officer and Head of IT Security.
Risks are assigned owners amongst the senior management team (primarily
functional leads) who monitor risks day to day, review the effectiveness of
controls in place, and report on risks through the risk register process.
The Group's risk register is subject to review by the Executive Leadership
Team ("ELT") prior to reporting to the Audit Committee and Board. In addition,
the ESG Steerco also support the ELT in identifying climate-related risks and
opportunities and ensuring compliance with the applicable ESG regulatory
landscape.
Risk oversight, appetite and governance is set by the Board. The Board has
overall responsibility for determining the nature and extent of the risks it
is willing to take in achieving the Group's strategic objectives.
Risk Levels
Following an assessment of the residual risk attached after internal
management and mitigation, each principal risk outlined below has been
assigned a direction of change based on 2023 factors and forward expectations.
Where a risk has increased or decreased in the year an additional note has
been included.
Strategic & external risk Technological, Cyber & Data risk Financial risk Operational & Regulatory risk
Any external risks outside of the Group's control impacting our business. The systems we use to power our business, and the data we hold. Integrity of reporting and viability of the Group. The processes and people we use to power the Hostelworld model.
- Macroeconomic Conditions - Data Security - Financial Risk - People
- Competition - Cyber Security - Taxation - Third Party Reliance
- Impact of Uncontrollable Events on our Business and the Leisure - IT Platforms and Technological Innovation - Climate Change and Sustainability
Travel Industry
- Search Engine Algorithms and Managing our Marketing Channels - Regulation
- Business Continuity
- Brand and Reputation
No Category Description and Impact Management and Mitigation Direction of Change
1 Macroeconomic Conditions The Group's financial performance is largely dependent on the wider Management and the Board regularly monitor a range of trading, market, and Steady arrow
availability of, and demand for, travel services. economic indicators to determine any risk to financial performance due to
macroeconomic uncertainties, and any potential mitigating actions required.
The Group's revenue and customer base is global, with a dispersed population
Travel services are enabled by the freedom of movement of people nationally of users, and a geographically dispersed set of destinations. While market
and internationally without prohibitive restrictions. Moreover, it is conditions may decline in certain regions, the globally diversified nature of
supported by affordable air, ferry and train fares at significant scale, and the business helps to mitigate this with circa 50% to 60% of destination
similarly good access to affordable accommodation. markets in Europe versus the rest of the world.
Inflation rates can impact consumer discretionary spending and reduce their
ability to travel. However, this is potentially offset by continued preference
The demand for travel services is influenced by a range of macroeconomic of consumers to prioritise discretionary spending on travel and leisure in
circumstances and their impact on consumers discretionary spending levels. their budgeting.
Economic activity, employment levels, inflation, interest rates, currency
movements and access to credit are among the factors that can impact travel In circumstances where events cause a material decline in consumer travel
demand. behaviours and patterns on a global scale, management will take necessary
actions to reduce operating costs and conserve cash.
2 Data Security We're an innovative technology group relying on advanced software and Data protection is a priority for the Group. We comply with laws, regularly Steady arrow
infrastructure, which means we can be exposed to cyber security threats. train employees, address threats and support business innovation and growth.
Protecting our e-commerce data and customer information is crucial.
We have a robust and comprehensive data privacy, security, and compliance
Our hybrid model, global contractors, and evolving social strategy heighten programme. A supplier is not onboarded until a rigorous review of their data
data security challenges. protection compliance and IT security controls has been carried out and deemed
satisfactory.
Cloud migration finished in 2022, but cloud security risks persist.
Technological speed and legislation gaps can complicate compliance with We adhere to leading industry standards and are PCI compliant. A data
guidelines and laws. GDPR adherence and secure, scalable IT platforms are protection framework aligned with GDPR is maintained, with a Data Protection
vital. Officer, supported by employee champions.
Hybrid work risks are assessed, and security measures include Single Sign On
and Multi Factor Authentication. Expert providers support us with cloud
services and security. Our evolving social strategy and broader product
developments are implemented in line with Privacy by Design, following
guidelines and emerging innovations with a risk-based approach.
3 Cyber Security The Group is susceptible to cyberattacks, which can impact system integrity The Group dedicates significant resources to enhancing cyber security and Steady arrow
and data security. Hackers' sophistication is constantly evolving, regularly increases expenditure.
complicating risk management.
A comprehensive risk programme manages vendor and third-party risks. Our
Cloud migration adds further cyber security challenges, potentially procurement process is robust, proactively ensuring new suppliers are security
compromising customer and proprietary data. Third-party vendors or contractors compliant.
can also be entry points.
Additional cyber security measures taken:
Inadequate skills internally might risk cloud data exposure and insurers could
limit coverage for cyber security incidents.
· Monitoring tools enable real-time threat detection and response.
· Policies and initiatives adapt to regulations and cyber threats.
· Mandatory security awareness training is consistently updated.
· Cloud-related training ensures skills are developed.
· Multi-factor authentication is implemented for better access control
and attack resilience.
4 People The Group relies on skilled, committed, and motivated employees for strategic The Group takes action to retain employees, by introducing innovative people Down arrow
success. However, the decision to maintain a stable headcount and not replace policies, moving to a remote working model, and by increasing the volume and
roles to pre-COVID-19 levels, combined with the transition to largely remote scope of employee events.
working may affect morale.
Learning and development initiatives have been prioritised and include
The Group is dependent on attracting and retaining key roles in engineering, training, mentoring, and a new online platform.
quality assurance, product management, and data roles to facilitate projects
and maintain product infrastructure. These roles can be hard to fill due to
location flexibility and competitive market demands.
Compensation is benchmarked externally, giving employees assurance that
salaries are competitive. During 2023 the Group also introduced a bonus scheme
tied to performance.
Failure to meet industry standards in rewards could lead to attrition, lowered
morale, business risks, damaging reputation, and productivity.
To provide flexibility of key talent, the Group operates from three global
offices and continues to hire in newer locations including Germany, Spain, and
Direction of change: Decrease in overall risk in the current year evidenced by Italy.
low attrition levels and the Group being a more attractive proposition for new
talent given the recovery in the business post COVID-19.
A Non-Executive Director fulfils a workforce engagement role as set out in the
2018 UK Corporate Governance Code.
5 Financial Risk The Group's activities expose it to a variety of financial risks. The Group's The Group proactively manages financial risk by seeking to minimise potential Steady arrow
revenues and costs are impacted by rising inflation rates, which may also adverse effects on its financial performance.
deter our customers from travelling.
Foreign exchange movements may impact travel decisions and travel patterns by
Foreign exchange movements may impact travel decisions and travel patterns by customers, but typically there is a degree of inherent hedging. In a normal
customers, as travel from one market into another (operating with a different trading environment, USD revenue receipts approximate related USD marketing
currency) becomes more expensive. Furthermore, the Group is exposed to outflows which mitigates FX translation risk. The Group minimises holdings of
translation risk which occurs if the Group has a surplus or deficit in a excess non-euro currency above anticipated outflow requirements.
foreign currency which changes in value over time.
The Group has established a disciplined framework, including key ratios and
The Group has a 3-year finance facility in place with Allied Irish Banks, plc KPIs, of forecasting and reporting which is regularly reviewed and challenged
comprising of a €10 million term loan, a €7.5 million revolving credit by management to ensure compliance with the loan facility's obligations and
facility ("RCF") and an undrawn €2.5 million overdraft. The term loan and covenants, and affordability of repayment terms including interest.
RCF each have an initial interest rate payable of 3.75% over EURIBOR, reducing
to 3.25% where the ratio of net debt to adjusted EBITDA is less than 2 times
and, 2.65% where the ratio is less than 1 times.
The facility includes a customary security package and financial covenants.
The Group must deliver a certain level of financial performance to meet its
repayment and covenant obligations.
6 Competition Competition risks could harm market share and growth. Competitors willing to Continuous monitoring of hostel coverage and market share guides the Group's Steady arrow
operate at a loss pose challenges. Price influences consumer decisions, proactive acquisition and retention strategy.
requiring competitive pricing, discounts, and flexible cancellation policies.
The Group's strategy focuses on leveraging its unique market position through
Competition might lead to losing key suppliers. Large market players and targeted customer acquisition and optimising the profitability of existing
disruptive new entrants pose risks. They may absorb revenue losses and/or customer cohorts, emphasising Customer Lifetime Value/Customer Acquisition
additional costs to compete on price or bidding strategy, their ability to Cost.
grow core inventory base (both in terms of property count and destination
coverage), and their ability to enhance product features faster through depth
of resources.
There's a continued focus on improving platform flexibility, enhancing
customer experience, and global expansion.
Changes in technology, such as AI or other, can impact the Group both
positively and negatively.
Partnerships deliver advanced technology solutions, aiming to diversify from
exclusive OTA reliance with a broader experiential travel offering. Commercial
agreements secure competitive rates and inventory, utilising the "Solo System"
Changing customer behaviour, such as preferring private rooms (as seen during and "social cues" to deter competition. The Group explores AI and new
COVID-19), could reduce demand or raise acquisition costs. distribution channels for customer acquisition and remains adaptable to market
changes.
Exclusive supply to competitors, new Digital Markets Act regulations, and
evolving market dynamics may influence the competitive landscape and affect
the Group's positioning in the market.
7 IT Platforms and Technological Innovation Over recent years the ever-increasing pace of change of new technology, new We focus on staying current with new trends in technology development and Steady arrow
infrastructure, and new software offerings have changed how customers customer behaviour.
research, purchase, and experience travel. Notable shift changes include AI,
mobile networks, mobile applications, meta-search providers, display
advertising, and social communities.
We invest a significant amount of our product and user experience functions on
Unless we continue to stay abreast of technology innovation and change, we research and development and interacting with similar companies both within
risk becoming irrelevant to the modern customer. Technology evolves rapidly, and external to travel.
and updates can become quickly obsolete.
We leverage the capabilities of partnerships to ensure we are delivering best
As new products and features are offered the relevant cybersecurity controls in class and the most advanced tech-based solutions for our customers and
must keep pace or risk new exposures. hostel partners.
The Group has continued with the ongoing modernisation of our underlying
platform to enable us to support faster execution across our core platform.
8 Third Party Reliance We rely on hostel accommodation providers to supply us with our inventory. Any Nurturing hostel and vendor relationships is a priority. This close Steady arrow
constraints upon the supply of hostel inventory may stem growth ambitions. cooperation enables us to monitor market development.
Revenue depends on connected hostels and third-party channels; lack of updates Rigorous assessment and due diligence is applied to third-party providers. All
or outages may cause competitiveness loss. vendor contracts and purchasing requests must be processed through the Group's
purchasing & contract review process.
Financial pressures on partners risk business closure or category shift.
Service providers are contractually obliged to provide timely resolutions to
Relying on third parties for systems poses revenue and functionality risks, issues. Alerts are in place to immediately capture any downtime and replicate
affecting customer service and brand. as much functionality as possible in-house.
Maintaining relationships with payment processors is crucial, as fee changes Annual business reviews and contractual obligations ensure risk mitigation.
or unfavourable terms could impact transactions. Readiness for partner/service provider failure includes financial health
monitoring and risk reduction measures.
9 Search Engine Algorithms and Managing our Marketing Channels A significant portion of our website traffic comes from search engines, both The Group invests in skilled personnel for paid and non-paid searches. Steady arrow
through organic and paid searches. We rely on Search Engine Optimisation and In-house expertise and technology adapt to algorithm changes.
Search Engine Marketing for visibility.
The search marketing team collaborates with Google, gaining search traffic
Search engine algorithms, like Google's, constantly change, affecting our efficiency insights. Participation in alpha and beta tests give the Group
placement and costs. AI-powered platforms are further influencing search first mover advantage with new functionality that can help drive efficiency.
results, making algorithm management and optimisation crucial for our
marketing strategy and efficiency.
Skill enhancement through third-party vendors complements in-house
capabilities for search engine optimisation.
10 Climate Change and Sustainability Increasingly, internal and external stakeholders are focused on the Group's The Group have ESG and TCFD Steercos who govern the actions taken by the Group Increasing
response to climate change. There is a request for more accountability from in relation to climate change. The steercos receive specific training from a
our customers, employees, and other stakeholders as to what the Group is doing third-party provider, and engage with third parties' specialists for
to limit its direct and indirect impact on climate change. There is a risk additional support where required.
that we do not meet shareholder expectations regarding our target setting and
performance against creating a more sustainable operating environment.
We have committed resources internally to assisting hostels and consumers on
their own sustainability journeys.
Listing rule developments require reporting on climate disclosures (by virtue
of TCFD).
Climate change issues may impact travel decisions and travel patterns by
customers but is mitigated to the extent that our business is a global one. We
There is a risk that the Group is perceived as not being transparent in its have a dispersed population of users, and a geographically dispersed set of
reporting. Physical climate change risks such as extreme weather events could destinations.
affect our inventory competitiveness and results of operations. In addition,
transitional climate change risks such as changes in stakeholder expectations,
travel patterns, technologies, and policy and regulation may affect the Group
and results of operations.
Direction of change: Increased risk driven firstly by increasing regulations
that the Group will have to comply with such as the EU Corporate
Sustainability Reporting Directive and secondly the unknown impact climate
change can have on our business if not managed. Physical impacts of climate
change such as drought, heatwaves and warming oceans will impact our hostels
and our trade.
11 Impact of Uncontrollable Events on our Business and the Leisure Travel The emergence of a global pandemic (similar to COVID-19) could result in Our target 18-34-year-old population tend to be flexible as to destination and Down arrow
Industry national or international lockdowns, risk to the health of our employees and are less risk adverse. Their trips tend to be a 'rite of passage' rather than
customers, and consequential negative impact on economic activity. a more discretionary or optional vacation resulting in less aversion to these
risks and more flexibility in configuring trips around restrictions.
Deterioration in the financial condition, restructuring of operations or
limited resource availability at one or more key stakeholder in our supply We maintain a close working relationship with our hostel partners to ensure we
chain eco-system could impact our growth. monitor key developments in the market and can take timely mitigating actions
if necessary.
The threat of terrorist attacks in key cities and on aircraft in flight may
reduce the appetite of the leisure traveller to undertake trips, particularly Risk assessment and due diligence controls are carried out by our dedicated
to certain geographies, resulting in declining revenues. Geopolitical procurement function and relevant business owner in respect of each
conflicts, climate change, natural disasters, or other adverse events outside third-party provider.
of the control of the Group may also reduce demand for or prevent the ability
to travel to affected regions.
Direction of change: Decrease driven by recovery in business from the impact
COVID-19 had on our business.
12 Regulation The Group faces regulatory and legal challenges in its global operations. We The legal team keeps abreast of current and anticipated legal requirements, Steady arrow
are exposed to issues regarding competition, licensing of local accommodation and consult with external legal advisors on territory specific legal and
and experiences, language usage, web-based trading, consumer compliance, tax, regulatory issues.
intellectual property, trademarks, data protection and information security
and commercial disputes in multiple jurisdictions.
Qualified and experienced in-house lawyers ensure consumer compliance, listing
rules, governance code, and Market Abuse Regulations adherence.
It's crucial that the Group complies with the Task Force on Climate-Related
Financial Disclosures and stays abreast of evolving sustainability
regulations.
TCFD governance structure and third-party monitoring ensure compliance with
climate changes.
The Group is subject to various regulations, including payment card
association rules, the EU Package Travel Directive, and rules on cookies usage
(impacted by GDPR and ePrivacy Directive). The Digital Services Act also External insurance brokers are appointed to optimise insurance terms
imposes content moderation and transparency obligations. reflecting industry standards.
Increased scrutiny of the mechanisms to transfer personal data to third
countries such as in relation to the EU-US Privacy Shield and Standard
Contractual Clauses create uncertainty in relation to international transfers Payment options are expanded for customer efficiency.
of personal data.
The California Privacy Rights Act introduces new privacy requirements. New
sign-up regulations, like DAC 7 EU Tax directive, may slow operations, impact The Digital Services Act is carefully reviewed, and processes are updated for
property categorisations, and result in closures due to changing local laws. social functionality and customer reviews.
Ongoing legal developments pose potential constraints, compliance costs, and
business harm for the Group.
Continuous reviews address online safety, media regulations, and evolving data
protection legislation in the wider legal framework.
13 Business Continuity IT system failures, including third-party services, could disrupt bookings, The Group's BCP prioritises e-commerce operations, backed by external Steady arrow
payments, and administrative services. advisors' disaster recovery plans.
Weakness in business continuity planning ("BCP") may lead to major service Modernisation and cloud transition enhance resilience.
disruption. Aging technology poses reliability, security, and feature delivery
challenges.
Robust supplier terms cover force majeure and BCP. Successful COVID-19
response validates BCP and backup systems, which are reviewed periodically for
Sole reliance on one cloud provider region risks business impact from data relevance and effectiveness.
centre outages.
14 Brand and Reputation Reduced brand marketing spending is likely to have impacted brand recognition The paid marketing teams focus on promoting the app and emphasising new social Steady arrow
and trust. features. Brand marketing sustains active owned channels, with added
investment in social media content creators, yielding increased engagement on
TikTok and Instagram.
Cyberattacks and poor customer experiences (with our hostel partners and our
services) pose reputational risks.
An ongoing CRM strategy integrates social features into the customer journey,
while proactive communication addresses emotive issues like the Ukraine war.
False claims about diversity, equity and inclusion or sustainability could
damage reputation.
External PR advisors handle corporate incidents, and the crisis communications
plan is updated with their involvement.
Response to geopolitical developments and improper user actions could also
affect brand integrity and the business.
Cybersecurity measures are robust, with a crisis plan adjusted to address
potential attacks.
An ESG Steerco oversees sustainability, mitigating risks through third
parties.
Customer service ensures positive experiences, backed by a crisis management
policy. In-app social features include terms, a code of conduct, and automated
moderation for user-reported inappropriate behaviour.
15 Taxation Indirect taxes are a growing area of complexity with different regimes and Tax risk management involves qualified personnel and collaboration with big Steady arrow
rules in place in countries where the Group does business. Measures introduced four tax advisors. Regular assessments, briefings to the Board, and biannual
include digital services taxes to address multinational businesses operating reviews with advisors, address tax impacts and legislative changes.
without a physical presence in Europe, and DAC 7 which requires digital
platform operators to collect and report information on sellers, with
penalties and potential lost revenue for non-compliance. There is a risk that
the Group does not stay ahead of compliance in all jurisdictions in which it Monitoring the global footprint includes implementing the relevant tax
operates. In addition, changes in tax legislation such as the European structures and enforcing a strict work-from-abroad policy.
Commission's proposals in relation to VAT in the Digital Age, interpretations,
or OECD recommendations may expose the Group to additional tax liabilities.
Key function locations are approved, and transfer pricing policies align
accordingly, demonstrating proactive tax risk mitigation strategies.
Due to the increasing global workforce footprint of the Group, a tax authority
may consider a permanent establishment to exist in a country by virtue of some
activity being carried on there.
Key functions, assets or risks undertaken/managed outside of Ireland may cause
tax leakage. If tax authorities take a different view than the Group as to the
basis on which the Group is subject to tax, it could result in the Group
having to account for tax that it currently does not pay. This may increase
the Group's effective tax rate, increase tax cash outflows, and increase the
costs associated with tax compliance.
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