TIDMHSW
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 t ravellers 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(R), 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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