Global accommodation booking platform Hostelworld has suspended its final dividend in respect of last year as holidaymaker bookings continue to fall.
The Dublin-headquartered company has been badly impacted by the spread of the coronavirus.
Hostelworld expects to incur an earnings hit of €5m for the first three months of this year, up from its early prediction of €3m - €4m, according to a trading update from the group.
The group's net cash position remains strong, with over €20m of immediately available cash on hand. It has no debt obligations.
Gary Morrision, CEO of Hostelworld, said: “"The COVID-19 outbreak has had an enormous impact on the hostelling industry, the wider travel market, and the communities we live in.
Given the strength of our balance sheet and the initiatives we have taken in recent weeks I am confident that when this crisis passes, as it inevitably will, we will emerge stronger than ever."
As at 24 March, Hostelworld’s deferred revenue - that is customer deposits made under its free cancellation booking product - amounted to €2.5m.
The company said that while the rate of cancellation under this booking option has increased due to changes in travel patterns in response to the coronavirus outbreak, it is working to minimise any negative cashflow impacts to the business, by offering credits in lieu of cash refunds.
The company has also implemented “various” measures to reduce near term costs and conserve cash.
As the uncertainty around the deadly virus continues, Hostelworld said it is too early to predict or quantify the impact it will have on the group's results this year.
“Our balance sheet remains strong and we have taken mitigating actions to preserve cash as detailed above,” Hostelworld said.