Hostelworld Group (HSW) H2 2024 earnings summary

Executive summary

• Net bookings grew 6% year-over-year to 6.9m, with solo travelers up 9% and now representing 63% of bookings.

• Social network strategy drove 80% of bookings from social members, up from 67% prior year, and app bookings increased 16% year-over-year, now 47% of total bookings.

• Marketing as a percent of net revenue reduced to 46% from 50% in 2023.

• Shift in demand toward lower-cost destinations, especially South Asia, which grew 29% year-over-year.

• Returned to net cash position, repaying all bank debt two years ahead of schedule, and maintained strong cost control despite inflationary pressures.

Financial highlights

• Net revenue declined 1% year-over-year to EUR 92 million, reflecting an 8% contraction in average booking value (ABV).

• Adjusted EBITDA rose 19% to EUR 21.8 million, with EBITDA margin up to 24%.

• Adjusted EPS increased 41% to 13.97 cents.

• Free cash conversion was 66%, down from 75% prior year due to working capital movements.

• Operating profit increased to EUR 11.3 million (from EUR 5.0 million), and profit for the period rose to EUR 9.1 million (from EUR 5.1 million).

Outlook and guidance

• Encouraging ABV trends in early 2025, supported by bed price inflation in Asia.

• Focus for 2025 on leveraging AI and machine learning to enhance the social network and customer experience.

• Detailed growth strategy and capital allocation update to be presented at capital markets day on April 29.

• Investments in the social platform and core platform modernization to continue, with completion expected in H1'25.