Adjusted earnings surged at budget travel group Hostelworld in the first half of the year, the company said on Wednesday in a trading update.
Ebitda (earnings before interest, taxes, depreciation and amortisation) jumped 88 per cent to €9.6 million, up from €5.1 million, in the six months to the end of June, the online travel company said.
When speaking to The Irish Times, the group said it had repaid 15 per cent of its pandemic-era warehoused debt in May of this year. The total amount owed was €9.6 million. The company is due to repay the rest of the debt over the next three years. It will repay €200,000 a month until 2027. Net debt at the group stood at €2.6 million at the end of June.
The group said the increase in earnings was driven by an upswing in the number of bookings, primarily in the Asian and Central American markets. However, this was offset by a fall in average earnings per booking as these markets are cheaper than other global markets. The company earns an average of €13.60 from each booking.
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As a result, net revenue for the company rose only slightly – by 1 per cent over the same period last year – to €46.4 million. Operating costs fell marginally to €12.5 million, a fall of 2 per cent on the previous year.
Bookings were up 9 per cent at 3.7 million. .
Hostelworld chief executive Gary Morrison said the trading update shows that “revenue is lagging net booking” as people are choosing to go to lower-cost destinations.
Dublin-based Hostelworld was founded as an online business in 1999 to provide a system for hostels around the world to connect with customers and manage their accommodation.
In April 2022, the group launched its “solo system”, specifically designed for people travelling on their own who want to meet new people. In the first half of 2024 bookings from these members increased by six percentage points to account for 80 per cent of all bookings.
Announcing results for 2023 in March, the group said bookings had jumped 37 per cent last year to 6.5 million. Hostelworld has almost 230 employees in more than 180 countries.
Mr Morrison said he was confident in the company’s growth strategy “and that we are well positioned, well financed and firmly on track to deliver against our objectives”.
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