Revenues jump 16% at Hostelworld despite ‘modest’ growth rates
Former Ryanair executive Michael Cawley set to be chairman of online booking platform
Michael Cawley: he is currently senior independent non-executive director of Hostelworld. Photograph: Dara Mac Dónaill
Revenues at Irish travel website Hostelworld rose 16 per cent in the first half of the year as the online booking platform said that former Ryanair executive Michael Cawley is set to assume the role of chairman.
Revenues rose 16 per cent to €46.6 million in the six months to June 30th, with earnings (adjusted ebitda) up 27 per cent to €12.9 million.
Pre-tax profits stood at €5.1 million, up from a loss of €5.5 million in the same period in 2016. The group had cash balances of €17.7 million as of end June, and Hostelworld will pay an interim dividend of 5.1 cent per share, up from 4.8 cent in the same period in 2016. Average booking value rose 3 per cent to €12.20.
Feargal Mooney, chief executive, said the strong trading seen in the second half of 2016 continued throughout the early months of 2017, “with growth in bookings across all geographies”.
However, while Mr Mooney says he remains confident in the group’s long-term strategy and execution, the level of growth in the first half of the year was “somewhat flattered by a weak comparative in H1 2016, and growth rates in the June to August period have been more modest. Our expectations for the full-year outcome are nonetheless unchanged, and we have declared a 6 per cent increase in the interim dividend”.
Mr Mooney said that demand has softened into the summer months against a background of terrorist attacks in Manchester and Barcelona.
The group’s flagship brand is Hostelworld, which now accounts for 92 per cent of group bookings, up from 73 per cent in 2015. Mobile bookings from mobile devices continue to grow, representing 50 per cent of total bookings in the six months ended June 30th.
Mr Mooney said Hostelworld was putting a lot of focus on its mobile app, which now accounts for 30 per cent of overall bookings, as the economics of getting travellers to book through the app were more favourable.
While organic growth was on the cards, Mr Mooney noted that the company would also consider an acquisition.
“We are certainly open to acquisitor opportunities, but there aren’t other direct competitors out there as we are the only hostel-focused travel site in the world.”. As such, Hostelworld might look to a tech company that could enhance its app offering, or a local player in Asia “that would help us grow faster”.
Richard Segal, the current non-executive chairman, is to step down after six years, and will be succeeded by Mr Cawley. The former Ryanair deputy chief executive is currently senior independent non-executive director of Hostelworld and will assume his new role at a date yet to be confirmed.
The bookings platform has also appointed Carl Shepherd as a non-executive director. Mr Shepherd spent 10 years with HomeAway, which he co-founded in 2005, until its sale to Expedia, and currently holds a board position at @Leisure Group, one of the largest online markets for holiday rental in Europe.