Dublin-based online travel agent Hostelworld is “charging up the battery” after two years of pandemic losses, with bookings and revenues on an upward trend.
Chief executive Gary Morrison said the group has seen a “strong start” to 2022, despite the stop-start nature of Covid restrictions, rising fuel costs and the war in Ukraine putting people off travelling.
He is upbeat despite a lull at the beginning of the year caused by the spread of the Omicron variant.
“We had quite a few false dawns, but I’m sort of hopeful that that’s not going to be an issue this year,” he told the Irish Independent after the release of the firm’s 2021 preliminary results.
“We’ve got this spread of some regions that are going, quite frankly, gangbusters and others that are still severely depressed. On an overall basis, the trends say to me that we should be marching back towards 2019 levels.”
The company’s prospects this year will depend on recovery in Asia and Oceania, which made up a third of Hostelworld’s portfolio in 2019 but are now dragging down its overall results.
Adjusted earnings before interest, tax, depreciation and amortisation showed a loss of €17.3m in 2021, which was flat on 2020, with full-year net bookings stuck at 1.5 million for the second year in a row – just over a fifth of 2019 levels.
On the plus side, net revenue was 10pc up on 2020, at €16.9m, while net average booking value was 30pc up, at €12.11. Cancellations were down 43pc. The increased revenue is thanks to growth in the Central American market – which is now twice as big as it was in 2019 – rising average bed prices and people booking longer stays.
Administrative expenses (excluding marketing) were also down by 15pc to €24.2m although Mr Morrison said he expects salaries and wages to rise as the firm wants to remain “competitive”.
Total cash at the end of December 2021 was of €25.3m, up from 2020 levels, thanks to a new €30m term loan in February 2021, which the firm might use to "forward invest in some areas of technology”.
But “one of the big unknowns” is the crisis in Ukraine, Mr Morrison said.
“The community of travellers that we serve tend to be, obviously, more at the budget end of the spectrum and therefore their elasticity to flight price is probably not as good. So that’s one of the big unknowns. We don’t know how long the conflict is going to continue for and what its longer-term impacts might be.”
Hostelworld stopped taking bookings in Russia and Belarus on the back of international sanctions. The two regions make up just 0.01pc of the group’s portfolio.