Business Irish

Wednesday 26 October 2016

Young and restless push sales up 5pc at post-IPO Hostelworld

Michael Cogley and Donal O'Donovan

Published 06/04/2016 | 02:30

A hostel in the Dutch capital Amsterdam, one of the many worldwide featured on the Irish company’s site
A hostel in the Dutch capital Amsterdam, one of the many worldwide featured on the Irish company’s site

Revenue at Irish travel booking website Hostelworld increased 5pc to €83.4m last year, though profits dipped by €4.6m.

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Hostelworld floated on the London and Irish Stock Exchanges last November, raising €173.6m.

Financial results yesterday show profit after tax fell to €21m.

While revenues were up, the business invested an extra €8.5m on marketing last year, including a €3.2m brand re-launch. Total marketing spend was €37.4m.

Hostelworld chief executive Feargal Mooney said the firm will see the full benefit of its brand investment next year.

"The new financial year has started well and in line with our expectations," Mr Mooney said.

"The strength of our brand and technology together with healthy booking numbers and continued pricing improvements, underpinned by a growing marketplace, gives the board confidence in the group's future prospects," he added.

The business provides a booking service for hostels worldwide and has shrugged off competition from the likes of AirBnB, he said.

Hostel users are younger and more likely to travel alone or in pairs, which deepens the appeal of hostels, which are often cheaper and more socially oriented than other online options, Mr Mooney maintained.

He said that 41pc of all bookings are made via mobile devices.

Asia is the fastest growing destination for bookings, but also a rising source of bookings, including from South Korea where the company has now opened an office, he said.

Davy Stockbrokers said the results "hit all the right notes".

"Hostelworld's maiden results statement is encouraging with a 3pc earnings beat, reassuring outlook and strong progress made against each of the company's four strategic growth pillars: pricing, brand, mobile and Asia," Davy said.

Hostelworld shares closed unchanged yesterday at €3.14 each.

Irish Independent

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