Hostelworld, the global hostel-focussed online booking platform, has announced its interim results for the period ended 30 June 2019.
The group delivered revenue of €38.8m in H1 2019 (H1 2018: €42.6m). Excluding the impact of deferred revenue, group revenue was €43.2m (H1 2018: €46.8m)
Hostelworld brand gross bookings stood at 3.7m in H1 2019 (H1 2018: 3.8m). Group total gross bookings were 3.8m (H1 2018: 4.0m) reflecting the continued managed decline in supporting brands.
Net of cancellations Hostelworld brand bookings came in at 3.4m (H1 2018: 3.7m), with total group bookings of 3.5m (H1 2018: 3.9m).
Average Booking Value was €12.8 (H1 2018: €12.2), a 6% increase on H1 2018, 2% increase on a constant currency basis.
There was a 7% increase in net bookings from the app (from 36% of net bookings in H1 2018 to 43% of net bookings in H1 2019).
The company delivered Adjusted EBITDA of €8.9m in H1 2019 (H1 2018: €10.4m), a 15% decrease (9% decrease when excluding the impact of deferred revenue).
Gary Morrison, Chief Executive Officer, commented, “While we are pleased with overall progress made during H1, particularly with regards to our ‘Roadmap for Growth’ strategy, booking demand over the peak summer period has been somewhat lower than anticipated.
'The first half financial performance was also significantly impacted by higher than anticipated inflation in performance marketing channels and the effect of the full global roll out of the free cancellation product being included for the whole period for the first time.
'As noted, we have made good progress on our ‘Roadmap for Growth’ strategy during the first half of the year, including improving the core search experience and adding unique hostel content, in addition to initial steps to improve our connectivity with our hostel partners and suppliers. We have also announced a strategic investment in Tipi, an innovative hostel focussed technology company, which will enhance our product offering for both our customers and hostel partners.
'The market remains highly competitive and as noted in our AGM statement, this continued into the peak summer period. Coupled with higher than anticipated inflation in performance marketing channels and the financial effect of increased investment in our ‘Roadmap for Growth’ during the second half of the year, means that EBITDA for the full year is likely to be below 2018.
'We continue to operate in an attractive and growing market, and I remain confident about the opportunity to capitalise on the significant growth opportunities we have identified. I believe the operational and strategic improvements we have put in place in the first half, should enable us to return the business to volume growth during 2020 and we continue to assess opportunities, both organic and inorganic, which could enable us to accelerate that growth.”