Irish travel website Hostelworld has reported a drop in revenue and profit for last year in what it described as a "highly competitive market".
But the company said it was operating in line with expectations, with chief executive Gary Morrison saying Hostelworld was optimistic about its future growth.
The company said revenue fell by 5 per cent to €82.1 million in 2018 with the drop attributed mainly to €2.9 million in deferred revenue, which will be recognised in 2019. The company introduced a free cancellation policy for its platform, which has led to some revenue being deferred to the following year.
Operating profit for the year fell to €6.7 million from €11.9 million the previous year.
Brand bookings grew by 4 per cent during the year, though growth in total group bookings was flat “reflecting the managed decline in supporting brands”.
Hostelworld also reported a 22 per cent increase in bookings from the app, which accounted for 40 per cent of all bookings in 2018.
The company said it was proposing a final dividend of 9 cent per share, resulting in full-year dividend of 13.8 cent per share, in line, it said, with its stated dividend policy.
“Hostelworld is operating in a highly competitive market, which is growing,” said Mr Morrison. “ We have a very relevant brand which is trusted by a loyal and engaged customer base.
Strategic review
“Following the completion of our strategic review, we identified and developed a ‘Roadmap for Growth’ programme to allow the group to capitalise on these significant opportunities available and to return the business to growth,” he said.
“There isn’t anything I’ve seen that indicates we aren’t on the right track. There’s no reason to be anything other than optimistic.”
Davy Stockbrokers said that while it was still early days in the execution of Hostelworld’s new strategy, “progress has begun and the implementation of the plan will be a key focus for the company in 2019 – with the ultimate objective being a return to growth in 2020”.
It noted that Hostelworld delivered a “modest 3 per cent beat” on adjusted Earnings before interest, tax, depreciation and amortisation (Ebitda) in 2018 and continues to demonstrate strong cash-generation capabilities.
