Hostelworld Releases Its Results For H1 2022

By Dave Simpson
Hostelworld Releases Its Results For H1 2022

Dublin-based accommodation platform Hostelworld Group plc its interim results for the six month period that ended on 30 June 2022.

Significant Developments

Hostelworld's results included the following information:

  • Net bookings 59% of H1 2019 levels with an increasing percentage achieved as Hostelworld moved through the period. January bookings were at 33% of January 2019 while June bookings were at 80% of June 2019. Net revenue reached 104% of 2019 levels up from 34% in January, driven by higher average booking values.
  • While overall EBITDA was negative for H1 2022, June was positive reflecting the increased level of bookings in that month.
  • 30 June 2022 cash balance €23.3 million, strong balance sheet and liquidity going into H2 2022 - well positioned to invest to accelerate growth​ and subject to no further deterioration in the macroeconomic/geo-political backdrop.
  • Delivering a differentiated growth strategy capitalising on the unique needs of the hostelling category​.
  • Progressed ESG strategy achieving climate neutral accreditation in partnership with South Pole.

Financial Highlights

  • Net revenue of €28.0 million in the period (H1 2021: €2.9 million), increase of 866% driven by pent up demand as travel restrictions eased in H1 2022.
  • Net bookings totalled 2.1 million (H1 2021: 0.3 million)
  • Net average booking value (ABV) of €15.82, a 35% increase (H1 2021: €11.72), due to favourable geographical mix, price inflation, recovery of underlying bed prices and longer length of stay bookings.
  • Cost per net booking was €9.46, a €3.23 increase over the same period last year (H1 2021: €6.24).
  • Direct marketing costs as a percentage of net revenue amounted to 70%, (H1 2021: 69%). Marketing costs expected to normalise to circa 50%-55% range over 2023 as normal travel patterns resume.
  • Loss in the period of €14.3 million (H1 2021: €20.3 million).
  • Adjusted EBITDA loss of €5.2 million (H1 2021: €9.7 million loss).

Balance Sheet And Cash Flow

  • Total cash and cash equivalent as at 30 June 2022 of €23.3 million (H1 2021: €33.7 million).
  • Net asset position of €54 million (H1 2021: €81 million) with available capital to invest to accelerate growth.

Statement By CEO

CEO Gary Morrison commented, "We are encouraged by the strong recovery we have seen in the first six months of the year across all demand segments and destinations, which demonstrate the ability of our business to capture pent-up demand as the travel market returns.

"In particular, booking demand into Europe, our largest destination in 2019, remains strong with our top markets in southern Europe exceeding 2019 levels. We also witnessed booking momentum slowly returning in Oceania and Asian destinations from a very low level in January, with booking demand in June at 43% of 2019 levels. Finally, long-haul bookings have reached 75% of 2019 levels in June, with trips from the US and Canada into European destinations above 2019 levels.


"We are pleased to report continued progress across all aspects of our differentiated growth strategy, that capitalises on the unique customer needs and attributes of the hostelling category. In particular, we are encouraged by the initial take-up of our ‘Social’ features by our customers. In parallel, we continue to make good progress on our platform modernisation strategy, having now migrated our platform to the cloud and exited our on-premise data centres.

"As we look to the future, we remain confident that our loyal customer base has the flexibility, the means and the desire to travel and meet other like-minded travellers as travel restrictions continue to ease."

Trading Update

During the first six months of the year, Hostelworld has seen strong month-on-month growth in new customers, net bookings and net revenue as the impact of the Omicron outbreak subsided. Specifically, June 2022 net bookings reached 80% of June 2019 levels (up from 33% in January), and net revenue reached 104% of 2019 levels (up from 34% in January), driven by higher average booking values.

As the recovery progressed, Hostelworld has seen several factors impact its trading economics versus 2019. In particular, net revenue growth has outpaced net bookings growth driven by a steady increase in average net booking values versus 2019. This has been driven primarily by bed price inflation (resulting from destination specific recovery rates versus 2019), which has been partially offset by a reduction in blended commission rates (due to the removal of Elevate in 2020), and higher cancellation rates (in part driven by a higher proportion of free cancellation bookings).

Direct marketing cost as a percentage of net revenue has also grown versus 2019, driven by Hostelworld's focus on new customer growth, underpinned by its ability to predict the lifetime value of these new customers versus their acquisition cost; higher cost per clicks (CPCs) in paid marketing channels (driven by higher average booking values); lower conversion rates in destinations where some level of restrictions persist; and finally higher cancellation rates (in part driven by a higher proportion of free cancellation bookings).


Overall, Hostelworld expects direct marketing costs as a percentage of net revenue will remain at H1 2022 levels for the balance of the year, before normalising to circa 50%-55% range over 2023 as it continues to optimise marketing investments for long term growth in new customers and direct margin. In parallel, Hostelworld also expects its "Social" strategy to improve our business model over time by driving new and existing customers to use its iOS and Android Apps.

Hostelworld has seen a significant improvement in operating cash performance with monthly operating cost cash burn reduced to a nominal level and the business returning to cash generative in Q2. As at 30 June, cash totalled €23.3 million, down €2.0 million as compared to cash as at 31 December 2021. Hostelworld will continue to maintain its cost discipline on an on-going basis and may look to refinance its current debt facility in 2023.

On the supply side, despite more than two years of depressed demand due to COVID-19 there has been only a very modest 8% net reduction in the number of hostels on Hostelworld's platform as of 30 June compared to levels at the end of 2019. These have been driven by continuous additions to the platform. For clarity, this reduction does not include hostels removed temporarily from our platform in Belarus and Russia, due to the ongoing conflict in the region.


The board remains confident in the long-term resilience of our business model and the potential of our differentiated growth strategy. The trends in H1 2022 are encouraging and indicate that where markets open up for travel, demand will recover to 2019 levels and that we can gain our share of that growth. In the absence of any further deterioration in the macro-economic climate, disruption to airline schedules, or escalation of the conflict in the Ukraine, Hostelworld expects to be EBITDA positive in H2 2022."

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