Revenue at hostel booking group Hostelworld continued to rise in the second half of 2025, new figures show, driving full-year net revenue higher.
But the company is closely watching the situation in the Middle East, it said, with the potential for impact on travel patterns and airline costs.
The group said adjusted earnings were down, in line with expectations, and marketing costs declined as the company’s social marketing improved its efficiency.
Net revenue for the year was €93.8 million, a 2 per cent increase year on year. Hostelworld said there was a significant rise in the second half of the year, with generated revenue rising 7 per cent.
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Direct marketing costs in the second half of 2025 were 45 per cent of revenue, down from 48 per cent a year earlier. Hostelworld attributed that to its social network, which now reaches 3.4 million members.
Adjusted earnings before interest, tax, depreciation and amortisation fell 9 per cent to €19.9 million, in line with market consensus, while adjusted earnings per share were down 15 per cent to 11.91 cent.
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Full-year net bookings were 1 per cent higher at seven million, with net average booking value increasing 2 per cent year-on-year to €13.43. Operating costs were broadly stable at 27 per cent of revenue, totalling €25.8 million.
Chief executive Gary Morrison said 2025 was “a year of two distinct halves” for the company.
“While the year began against a softer trading backdrop, I am very pleased with the significant momentum we built throughout the second half, delivering 7 per cent revenue growth in H2 and full-year adjusted Ebitda [earnings before interest, tax, depreciation and amortisation] in line with market consensus,” he said.
“This performance was underpinned by the disciplined delivery of the strategic milestones we set out at our 2025 Capital Markets Day.”
Morrison pointed to the launch of its marketplace monetisation tool Elevate, which increased its commission rate to 16.7 per cent in the second half of the year.
He also highlighted the acquisition of OccasionGenius, the launch of Social Passes to create a new subscription revenue stream, and the initial roll-out of budget accommodation across 50 destinations.
“We have fundamentally strengthened our platform’s value proposition and made meaningful progress towards our Vision: to be the world’s leading social travel platform,” he said.
The evolving situation in the Middle East could affect global travel patterns and airline prices, Morrison said, but there had been no material effect on revenues to date.
“We are seeing some softness in bookings to Asia and Oceania, offset by stronger demand in Europe and North America, supported in part by the timing of Easter this year,” he said.
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“While it is too early to draw firm conclusions from these early trends, to date there has been no material effect on revenues. Our current outlook assumes no material impact on bookings and is subject to there being no further escalation in the region which would further disrupt air travel.”
Looking ahead, Morrison said trading in the first quarter had been positive.
“The board remains confident in the group’s ability to deliver low double-digit revenue growth in 2026 and 2027, in line with the targets set out at the April 2025 Capital Markets Day, with an adjusted Ebitda margin greater than 20 per cent and adjusted free cash flow conversion of approximately 70 per cent,” he said.
A shift towards AI travel discovery could also benefit the company in the longer term.
