Hostelworld Group (HSW) H1 2024 earnings summary

Executive summary

• Net bookings grew 9% year-over-year to 3.7 million, driven by strong demand for low-cost destinations, especially in Asia and Central America, with solo travelers contributing significantly.

• Adjusted EBITDA rose 88% year-over-year to €9.6 million, with margin increasing from 11% to 21%, reflecting cost discipline and improved marketing efficiency.

• Net revenue increased 1% year-over-year to €46.4 million, supported by volume growth and marketing efficiency, despite a 10% decline in average booking value.

• Early full repayment of AIB debt facilities, reducing net debt to €2.5–2.6 million from €12.3 million at year-end 2023, with only warehoused payroll tax liability remaining.

• Social platform now accounts for 80% of bookings, driving higher retention and app usage.

Financial highlights

• Net average booking value declined 10% year-over-year to €13.60, reflecting a shift to lower-cost destinations and shorter stays.

• Operating costs declined 2% year-over-year to €12.5 million, aided by tech efficiencies and lower paid marketing expenses.

• Adjusted earnings per share improved to 6.0 cents (vs. -1.9 cents H1 2023); net profit reached €2.5 million.

• Free cash flow conversion was 103% of EBITDA, with adjusted free cash flow of €9.9 million.

• No interim dividend proposed for H1 2024.

Outlook and guidance

• High single-digit net bookings growth expected to continue, with revenue growth to remain lower due to ongoing ABV contraction and destination mix.

• EBITDA guidance reiterated in line with market consensus, targeting circa 20% EBITDA margin and €21.4 million EBITDA for the full year.

• Expect to be net cash positive by end of Q3 2024.

• Continued investment in social platform and expansion of hostel supply coverage planned.