HostelWorld shares surge as Covid recedes and travellers reconnect

Budget travel website Hostelworld

Shares in Irish travel group HostelWorld have spiked after shareholders were told it expects a 30pc hike in sales this year.

The platform features 36,000 hostel and b&b style holiday properties in 178 countries across the globe and is heavily geared towards travellers in the 18 to 30 age ranges.

Revenue is up as as global tourism recovers after Covid and on the back of HostelWorld’s new social platform that connects travellers going to the same destinations. The app allows travellers to link up with others visiting the same destinations and organise meet-ups as well offering hostels the opportunity to showcase their events.

Shares on the Euronext Dublin stock market were up more than 8pc by lunchtime in Tuesday as the company held its annual general meeting (AGM).

Ahead of the shareholder meeting chairman Michael Cawley issued a a strongly upbeat trading update.

As a result of this strong performance and in the absence of any deterioration in the macro-economic environment, the reintroduction of Covid restrictions or air travel disruptions, we expect bookings and revenue to grow by 30pc over 2022 and our adjusted EBITDA to be in the range of €16.5m to €17m for the full year.

Bookings to many of HostelWorld’s key destinations are above 2019 levels with the Asian market, in particular, recovering strongly, he said.

Bed prices are ahead of 2019 levels. In addition, he said Hostelworld's new social network which was introduced to customers last year is proving “hugely popular and has helped deliver market share gains in key markets.”

In a note analysts at Goodbody said the feature helped separate HostelWorld from other online travel agents.

In an update on its financials the company said it has completed a refinancing of debt with new lender AIB.

The deal involved the remaining size of an originally €30m loan following an earlier repayment of €10m,

The new three-year facility with AIB is comprised of a €10m term loan, a €7.5m revolving credit facility (RCF) and an undrawn €2.5m. The term loan and RCF carry an initial interest rate payable of 3.75pc over EURIBOR, reducing to 3.25pc where the ratio of Net Debt to adjusted EBITDA is less than 2 times and, 2.65pc where the ratio falls below times earnings.

The new facility, with materially lower interest costs, significantly strengthens the group’s balance sheet, HostelWorld said.

Latest NewsMore