Dublin-based hostel booking company Hostelworld said net bookings continued to recover and revenue surpassed 2019 levels as cancellation rates normalised.
In a trading update for the period ended September 30th, 2022, the group said it had seen “significant improvements” in key financial metrics and performance indicators since reporting its first-half results.
Gross merchandise value, or the value of sales, net of cancellations in September was 116 per cent levels recorded in 2019, while net revenue was 104 per cent of 2019 levels. Net bookings, meanwhile were 83 per cent of levels seen pre-Covid, as the Asia and Oceania regions continued to recover.
The company said its social strategy, launched earlier this year, was delivering margin growth well ahead of expectations, and marketing as a percentage of net revenue is expected to improve from 70 per cent in the first half of the year to 55 per cent in the second.
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Hostelworld said almost 50 per cent of all customers had signed up to the platform since its April launch, which in turn had driven a “significant increase” in the volume of app bookings.
The group said it expects to finish the year “modestly” positive on earnings before interest, tax, depreciation and amortisation, and with a stronger cash position than anticipated.
Chief executive Gary Morrison said he was encouraged by the financial and operational progress the company had delivered.
“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,” he said.
“While recognising that wider macroeconomic 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.”
