Hostelworld Group - Backpacking them in
Hostelworld’s pioneering and fast-evolving ‘social’ strategy is delivering aplenty. Material outperformance of the hostel market (FY23 bed nights sold up 30% vs industry 8%) and low-cost acquisition and retention of high-value customers (over a million social members after just 18 months) confirm the success of the company’s app-centric model, which taps into the social media habits of its target demographic to mutual benefit. With reducing marketing percentage of revenue on track to meet the FY25 low-end target of 45% (48% in H223), the boon of higher leverage from an asset-light platform may be reinforced by the move to cloud-based hosting, development of complementary acquisition channels and use of AI. FY23 EBITDA of €18.4m clearly ahead of €17.5–18.0m guidance and a ‘strong start to 2024’ suggest company targets of c 20% EBITDA margin on c €106m revenue in FY25 are well in hand.Hostelworld Group is engaged in managing and operating hostel-focused online booking platform through its flagship brand Hostelworld and supporting brands Hostelbookers and Hostels.com. Co. focuses on hostels, maintaining a global hostel database with over 14,000 hostels and approx 21,000 other forms of budget accommodation globally and manages customer-generated review database. Co. is a key distribution channel for hostels worldwide offering them a market-leading proposition by providing: a lower cost distribution channel; access and promotion across a range of platforms with an attractive demographic profile; access to BackPack Online; and access to Co.'s booking engine technology.
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