'Modest' earnings growth expected at Hostelworld in 2019
Dublin-listed Hostelworld expects its growth in earnings before interest, tax, depreciation and amortisation (EBITDA) in 2019 to be "modest".
In a trading update this morning, ahead of its Capital Markets day, the group reiterated that it expects like-for-like gross bookings to be flat this year, given the expected declines in its supporting brands.
The group added that cost management, combined with strong average booking value is helping to offset the impact of the flat bookings.
"We continue to see strong underlying cash conversion in 2018. The rollout of our free cancellation product has started well and cancellation rates are performing in line with expectations," the group said.
Commenting on the update, Gary Morrison, CEO of Hostelworld, said the company was operating in "an attractive and growing market, with a strong and trusted brand, providing relevant and valuable customers to the hostel sector."
"We will invest in our core products, platform and capabilities as we strive to improve the hostelling experience for travellers and enhance our technology offering for the benefit of our core hostel partners," Mr Morrison said.
Over the past six months the company has undertaken a strategic review, following which Hostelworld said a number of focus areas have been identified, "most notably a lack of investment in the core platform and the focus on short term monetisation levers all of which the long-term investment strategy will aim to address."