Hostelworld: Travel agency starts to pay off pandemic debt after record bookings in Asia
Backpacking Brits looking for cheap stays in Asia and Central America helped online travel agency Hostelworld achieve a record performance in the first half of its financial year.
The Irish company, which is listed in London, reported record bookings in Asia and Central America in the six months to June 30.
Net booking rose by nine per cent year on year to 3.7m, although the average booking value at the company was pulled down by 10 per cent thanks to an increase in solo travellers and high demand for Asian destinations.
Hostels in Asia – particularly South-east Asia – tend to be cheaper than in other parts of the world.
Katie Cousins, equity research analyst at Shore Capital, suggested that the strength in the Asian markets “likely reflected the region’s slower travel reopening versus the likes of Europe”.
Operating costs fell by two per cent year on year, to €12.5m (£10.77m).
In a sign that the company has left its pandemic-era troubles behind, it commenced repayment of its warehoused payroll taxes – which assisted businesses that experienced cash-flow and trading difficulties during the COVID-19 pandemic – to the Irish Revenue.
It paid €2m (£1.72) during the period, with €7.6m (£6.55) still outstanding.
Gary Morrison, Chief Executive Officer, said: “I am very pleased to report strong growth in net bookings and even stronger growth in net margins, primarily driven by our highly differentiated social strategy.
This performance, coupled with operating cost discipline, has translated directly into strong operating cashflow.
We have continued to provide our customers with enhanced social network product features, added more hostel inventory to our platform, and have continued to upgrade our platform towards a fully cloud native architecture.”
Hostelworld reiterated its guidance for the full year 2024, “absent any deterioration in the macro-economic climate or the occurrence of significant air travel related disruptions”.