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Irish Independent

Hostelworld says revenues almost back to pre-pandemic levels

The Casa Elemento Hostel in Colombia is a Hostelworld site

Online travel agent Hostelworld’s revenues have returned to pre-pandemic levels on the back of rising bed prices and a strong recovery in its European markets.

Net bookings reached 73pc of 2019 levels last week, up from 60pc just six weeks ago, when the group published its preliminary results.

Revenue has now reached 97pc of pre-pandemic levels, up from 75pc six weeks ago.

Chief executive officer Gary Morrison said Europe has seen the biggest recovery, with Asia and Oceania catching up despite ongoing restrictions in some markets.

Long-haul travellers from the US and Canada are also driving the uptick in revenues.

“Whether you look at it destination-wise or the type of travel, we’re seeing the business recover consistently with the first 12 weeks, which is very strongly,” Mr Morrison told the Irish Independent ahead of the group’s annual general meeting in Dublin.

“As the summer progresses, we will be expecting our trajectory, in terms of recovery versus 2019, to continue.”

Booking demand into Europe, Hostelworld’s largest destination in 2019, has almost fully recovered to 2019 levels.

Some markets – such as Portugal, Spain and France – have already exceeded pre-pandemic levels.

Bookings in Oceania and Asia have “really picked up momentum”, Mr Morrison said, despite Covid-19 restrictions continuing in key areas.

Long-haul bookings are at 70pc of 2019 levels, with trips from the US and Canada into Europe back at 2019 levels.

Bookings in the low-cost hostels sector are recovering faster than air passenger numbers, which are still below pandemic levels at Europe’s largest airlines.

Aer Lingus owner IAG said last week that passenger capacity was just 65pc of 2019 levels in the first three months of 2022, although that was up from 58pc at the end of December.

The group is expecting and planning for full-year capacity of 80pc.

Low-cost carrier Ryanair saw its passenger load factor for January to April rise to 83pc, from 71pc last year, thanks to a boost in travel during the Easter break that saw flights fill up.

Hostelworld chairman Michael Cawley said the firm was “confident in our business model and in our proven capability to capture the pent-up customer demand to travel”.

“Despite a number of external factors including inflationary pressures and the ongoing conflict in Ukraine, we anticipate this strong recovery trajectory to continue.”

Mr Morrison said inflation was driving up bed prices and adding to the Hostelworld’s bottom line.

But he said dipping consumer sentiment was a “very valid potential headwind” although the firm is “not seeing it in the numbers”.

“In other parts of the travel market, it tends to be more of a luxury item, and something that you potentially give up.

“But I think in the 18-35-year-old bracket – because, obviously, the average booking values are much lower and [because of] the need, not just to get a bit of sun, but to connect with other people – so far we’re not seeing it in the numbers.”