Hostelworld on Wednesday warned coronavirus could hit first-quarter profits by up to £3.5 million as the online booking platform grappled with a drop in demand.
The company said the virus had sparked a fall in bookings and a rise in cancellations, prompting a splurge on advertising to attract customers.
Chief executive Gary Morrison said the forecast was “caveated”, adding: “If the coronavirus were to take hold in a brand-new region like the US, then that would affect the guidance we have just given.”
Hostelworld’s pre-tax profits fell 55% to €3 million (£2.6 million) for the year to December, as bookings dropped 5%. Sales also slipped 2% to €80.7 million for the period.
Morrison said there were signs his strategy to reboot the business was working after sales rose 1% in the final three months of last year.
Hostelworld said it would cut its payout to shareholders to fund a takeover spree, which will push the business towards offering travel experiences as well as hostels.
The shares plunged 11% to 92.9p.
