Hostelworld Revenues Up 10% in Year to Date
Hostelworld – the Dublin founded and headquartered global hostel booking platform – has said its group revenue is 10% up in the year to date.
The company’s latest trading update – covering the third quarter of the year – shows net revenue of €27.9m for the three months to the end of September; marking a 7% year-on-year increase; and an 11% year-on-year jump in net average transaction value to €15.3m.
However, the ongoing Middle East conflict has continued to dampen the business, with overall net transactions down 2% to 1.6 million in the latest quarter. Higher travel costs, due to the crisis, have also affected long haul transactions.
This has led Hostelworld to lower its full-year earnings and revenue growth outlook, and resulted in the company's shares dropping to a four-year low today.
"With Asia and Oceania entering their seasonal peak in Q4, we now expect the Middle East conflict, together with the softer long-haul demand between Europe and the Americas, to continue to weigh on volumes for the remainder of the year and into 2027," the company noted in its trading update.
Gary Morrison, Group Chief Executive Officer, commented: "Revenue grew 7% in the third quarter and is up 10% year to date, despite the conflict in the Middle East weighing on transaction volumes. Year to date, Elevate lifted our effective commission rate to a record 17.7%, direct marketing was held within our guided range at 49% of generated revenue, and adjusted EBITDA was €16.5m.
"Transaction volumes were 2% lower in the quarter. We estimate that underlying growth was circa 4%, the same as in the first half of the year. The conflict reduced our volume growth by approximately four percentage points, up from about three in the first half, concentrated on routes between Europe and Asia or Oceania. The balance arose in roughly equal measure from softer long-haul demand on routes between Europe and the Americas and from lower organic web traffic, across the industry, as AI answers more searches. Demand within Europe and from North America was broadly flat.
"The platform continued to strengthen. Almost two-thirds of our bed-nights are now booked in the app, where the social network lives, and engagement accelerated, with chat users up 37% and messages up 77%. The higher commission rate funded increased investment in paid social to grow the member base. Paid social is a mid-funnel channel we did not use last year. AI now powers how the network matches travellers with each other and surfaces trending conversations.
"On our property pages, AI summarises travellers' reviews and answers travellers' property related questions directly. Social members continue to book more frequently and at materially higher margin than non-members, and our newer products are making a growing contribution to volumes."
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