REG - Hostelworld Grp PLC - Trading Update

HostelworldAnnouncement

12/10/2022 07:00

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RNS Number : 5555C  Hostelworld Group PLC  12 October 2022

LEI:213800OC94PF2D675H41

 

Hostelworld Group plc

Hostelworld Group plc - Trading Update

Strong current trading

Well positioned for profitable growth enabled by social network strategy

 

Hostelworld Group plc ("Hostelworld" or the "Group") is pleased to provide an
update on trading up to 30 September 2022.

Since reporting results for the first half, we have seen significant
improvements in our key financial metrics and performance indicators.

Key highlights:

·    GMV net of cancellations (1) in September reached 116% of 2019 levels

·    Net Bookings in September reached 83% of 2019 levels, driven by the
continuing recovery of Asia and Oceania regions (now at 70% of 2019 levels, up
from 43% in June)

·    Net Revenue in September reached 104% of 2019 levels, reflecting the
sustained growth in ABV and normalisation of cancellation rates throughout the
year

·    Social strategy is delivering margin growth well ahead of
expectations, with marketing as a percentage of net revenue expected to
improve from 70% in H1 to approximately 55% in H2

·    As a result, we now expect to finish the year modestly EBITDA
positive and with a stronger cash position than originally expected

(1) Total Transaction Value: Gross merchandise value of bookings net of
cancellations (pre-commission) processed on our platform

 

Since launching our innovative and differentiated social network strategy
earlier this year, we have seen strong growth week over week in the number of
customers signing up to our App based social platform when they make a booking
with us. In particular, as of the end of September almost 50% of all customers
had signed up to the platform (since launching in April); driving a
significant increase in the volume of bookings through our Apps. This, along
with strong net booking and average booking value (ABV) growth, has translated
into increased revenues, lower marketing costs and improved margins.

We are also pleased to report that through our continued strong cost
discipline and with marketing costs now lower than anticipated, we expect our
closing cash balance to be higher than originally expected.

In summary, all geographies continue to see a strong recovery in demand.
Bookings and ABV are trending positively, cancellation rates are in line with
expectations, and our marketing spend is significantly reduced as the benefits
of our social features continues to materialise.

Outlook:

Based on the current business performance and trajectory we now expect to be
modestly EBITDA positive for the Financial Year 2022. Given our continued
momentum, the outlook for 2023 is encouraging and we expect our growth
strategy to continue to deliver further significant benefits in FY 2023 and
beyond.

We look forward to providing further details of our growth plans and long-term
outlook at our Capital Markets Day on the 10(th) of November.

 

Gary Morrison, Group Chief Executive Officer, said today:

"I am very encouraged by the clear financial and operational progress we have
delivered year to date. In particular, I am very pleased with the positive
trends we are seeing from our innovative 'Social' strategy which is driving
more customers to use our Apps, and reduced marketing as a percentage of Net
Revenue.

In parallel, I am also pleased to welcome new research published by Bureau
Veritas which confirms that hostels produce on average 75% less carbon than
hotels. We know travellers are increasingly environmentally conscious,
constantly looking for ways to minimise their carbon footprint while visiting
new destinations. This report confirms that hostels are the sustainable
tourism choice.

While recognising that wider macro-economic conditions are challenging and
highly volatile, I remain very encouraged by the growth outlook for our
business, underpinned by our highly differentiated Social strategy, data
driven marketing allocation and disciplined cost control. I want to personally
thank the entire Hostelworld team for their efforts in building the strong
operating platform we have today as I look forward with confidence on the
journey ahead to continued profitable growth."

Capital Markets Day 10(th) November:

The Group will host a Capital Markets Day event on 10(th) November 2022 at the
offices of Numis Securities, 45 Gresham Street, London EC2V 7BF, where the
CEO, CFO and members of the management team will discuss latest developments
and future plans to continue our journey to profitable growth.

To register your attendance in-person or virtually, please email
numis_hostelworld@numis.com.

MAR information

This announcement contains inside information for the purposes of Article 7 of
the UK version of the Market Abuse Regulation (EU 596/2014) ("MAR") which is
part of UK law by virtue of the European Union (Withdrawal) Act 2018. For the
purposes of MAR and Article 2 of Commission Implementing Regulation (EU)
2016/1055, this announcement is being made on behalf of the Company by
Caroline Sherry, Chief Financial Officer.

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

 Eavan Gannon / Nick Dibden                                   Tel: +44 (0) 20 7250 1446

                                                              hostelworld@powerscourt-group.com

About Hostelworld Group

Hostelworld Group is a leading Online Travel Agent focused on the hostelling
category, with a well-known trusted brand, 13.7 million reviews and a loyal
customer base built up over 22 years. Our core business provides our customers
with hostel accommodation options and hostel focused small group adventure
tour products (Roamies) in over 180 countries worldwide via our website and
native app platforms in 19 languages.

In parallel with helping millions of hostel focused travellers Meet The
World®, we are also committed to building a better world in everything we do.
In particular, we are increasing our focus on improving the sustainability of
the hostelling industry, through our active involvement in the Global Tourism
Plastics Initiative (GTPI), led by the UN Environment Programme and the World
Tourism Organization (UNWTO); our membership of the Global Sustainable Tourism
Council (GSTC); and our recent partnership with the South Pole to offset all
our greenhouse gas emissions in 2021.

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.

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