A record year, with adjusted EBITDA exceeding market guidance.
Hostelworld, a leading global OTA focused on the hostel market, announce its preliminary results for the year ended 31 December 2023.
Significant developments
- Record full year net GMV and generated revenue
- Leader in Social Travel, with a highly differentiated business model driving strong growth in App bookings and reduced marketing costs as a % of revenue
- Robust bookings growth across all regions, a record year for Asia
- Operating costs continue to decline as a % of revenue
- Strong cash conversion driving deleveraging of balance sheet
- Returned the business to profitable earnings per share
- Continued progress of ESG agenda: launched ‘Staircase to Sustainability’ framework, awarded ‘Investors in Diversity’ Silver accreditation (building on 2022 Bronze) and published the 2nd edition of ‘Understanding the carbon impact of hostels vs. hotels’ in partnership with Bureau Veritas validating hostels as more sustainable than hotels
- Strong start to 2024 with positive trends continuing
Financial highlights
- Full year net bookings totalled 6.5m, an increase of 37% year on year (2022: 4.8m)
- Net GMV 618.7m euros, an increase of 32% year on year (2022: 470.1m euros)
- Net revenue for the period was 93.3m euros an increase of 34% year on year (2022: 69.7m euros)
- Net Average Booking Value (‘ABV’) of 14.36 euros, a decrease of 4% year on year (2022: 14.90 euros), a combination of bed price inflation and a greater proportion of Asian destination bookings
- Direct marketing as a percentage of revenue amounted to 50% (2022: 58%)
- Operating costs (excluding paid marketing costs, exceptional costs and share option charges) of 25.3m euros an increase of 0.4m euros year on year, continue to reduce as a % of revenue, 27% (2022: 35%)
- Adjusted EBITDA of 18.4m euros (2022: 1.3m euros)
- Profit after tax of 5.1m euros (2022: 17.3m euros loss)
- Adjusted EPS 9.91 cent (2022: 5.97 cent loss)
Balance sheet and cash flow
- Total cash as at 31 December 2023 of 7.5m euros (2022: 19.0m euros) and net debt 12.3m euros (2022: 21.6m euros)
- Adjusted free cashflow of 13.9m euros, 75% cash conversion (FY22: -521% cash conversion), balance of 7.5m euros revolving credit facility fully repaid in February 2024
Gary Morrison, Chief Executive Officer, commented: “I am very pleased to report another strong year of strategic progress for Hostelworld, which is 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 revenue) and continued operating cost discipline to deliver 18.4m euros EBITDA, which exceeded our guidance range of 17.5m euros – 18.0m. euros.
This operational delivery coupled with the strong cash conversion characteristics of our business model and a new 17.5m euros facility agreed with Allied Irish Banks, plc in May 2023, enabled us to strengthen our balance sheet and reduce our finance costs. As of February 2024, we have repaid in full the 7.5m euros revolving credit facility drawn down with AIB. Interest on the remaining term loan is charged at 2.65% over EURIBOR.
I am also proud to report that the Group continues to progress its ESG agenda and in particular the recent launch of our ‘Staircase to Sustainability’ framework with the Global Sustainable Tourism Council. This framework will help our hostel partners to promote the inherent sustainability advantages of their hostel accommodation.”
Outlook
“With our record performance in 2023 and substantial progress in strengthening our balance sheet, I believe we are strongly positioned to deliver against our medium-term financial commitments published at our Capital Markets Day in November 2022. We have started 2024 with strong momentum, and I feel confident that we will continue our track record of profitable growth and value creation for our shareholders.”
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
