Hostel group sees bookings rise 6%

Shares in Dublin-headquartered accommodation booking company Hostelworld jumped by as much as 3% on the back of it reporting a 6% increase in total bookings for 2017 and saying its annual earnings should meet its targets, writes Geoff Percival.

In a pre-close trading update, ahead of the publication of its annual results in April, Hostelworld said bookings via its flagship brand increased by 13% in the year, with second-half growth of 6% noted. Further progress was made on the group’s mobile strategy, with mobile, including tablets, now representing more than 54% of total group bookings. In 2016, mobile accounted for 47% of total bookings.

While overall growth was up, the second half of last year saw more modest growth, with bookings only up 1% year on year. Nevertheless, the company said it remains upbeat about prospects for 2018.

“We are pleased with the performance of the business in 2017,” said chief executive Feargal Mooney.

“During the second half of the year we delivered an efficient booking mix with marketing costs for the full year marginally lower than our previously guided range. We continue to executive well on our strategy and this positions the group well to make further progress in 2018.”

Davy analysts said: “Confirmation that Hostelworld’s results for 2017 were in line with expectations means that it has now delivered high single-digit constant currency earnings growth in both 2016 and 2017 despite evidently changing conditions.

“We expect net revenue of €86m for 2017, up 7% from €80.5m in 2016,” they added and adjusted EBITDA of €25.5m, up 6% from €23.9m in 2016.

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