Dublin-based hostel booking company Hostelworld Group said that based on its current business performance and trajectory it expects to be modestly EBITDA positive for 2022, adding that given it continued momentum, the outlook for 2023 is "encouraging".
In a trading update, Hostelworld said its net bookings in September reached 83% of 2019 levels.
It said this was driven by the continuing recovery of Asia and Oceania regions, which are now at 70% of 2019 levels, up from 43% in June.
It said that revenue in September reached 104% of 2019 levels, reflecting sustained growth in its average booking values and normalisation of cancellation rates throughout the year.
Hostelworld said its new social strategy is delivering margin growth well ahead of expectations.
Marketing as a percentage of net revenue expected to improve from 70% in the first half of the year to about 55% in the second half, it added.
It said that since launching its social network strategy earlier this year, it has seen strong growth in the number of customers signing up to the app based social platform when they make a booking.
As of the end of September almost 50% of all customers had signed up to the platform, which was launched in April.
"This, along with strong net booking and average booking value (ABV) growth, has translated into increased revenues, lower marketing costs and improved margins," the company stated.
It also said that because of its continued strong cost discipline and with marketing costs now lower than anticipated, it expects our closing cash balance to be higher than originally expected.
"In summary, all geographies continue to see a strong recovery in demand. Bookings and ABV are trending positively, cancellation rates are in line with expectations, and our marketing spend is significantly reduced as the benefits of our social features continues to materialise," the company stated.
Gary Morrison, group chief executive officer, said the company was very encouraged by the clear financial and operational progress it has have delivered so far this year.
Mr Morrison also said he welcomed new research published by Bureau Veritas which confirms that hostels produce on average 75% less carbon than hotels.
"We know travellers are increasingly environmentally conscious, constantly looking for ways to minimise their carbon footprint while visiting new destinations. This report confirms that hostels are the sustainable tourism choice," he said.
The CEO said that while recognising that wider macro-economic conditions are challenging and highly volatile, he remains very encouraged by the growth outlook for the business.
