Hostelworld sees revenue decline 81%, continues to bet on experiences

Hostelworld says it continues to see opportunity in selling travel experiences as well as providing social features to connect platform users.

Reporting financial results for 2020, Gary Morrison, CEO of the budget accommodation-focused online travel agency, says the company has made improvements to the business throughout the past year and “will emerge pandemic stronger than before.”

Hostelworld reported a decline of 79% in booking volumes for the full year while net revenue was down 81% to €15 million.

Net average booking value came in at €9.33, a 22% dip on 2019’s figure of almost €12 attributed to the impact of increased cancellations and a reduction in bed prices in all markets.

The company reduced its marketing costs to €9 million compared with the €33 million spent in 2019.

Adjusted EBITDA was reported as a loss of €17 million, compared to a profit of €21 million in 2019.

Hostelworld says its cash position at December 31, 2020, was €18 million.

It raised €15 million in June and further strengthened the balance sheet last month through a €30 million loan facility.

Morrison says: “2020 has been an extremely challenging year for both Hostelworld and the entire global travel industry. In light of the unprecedented challenges presented by the pandemic, our key priorities have been to (i) support our employees, customers and hostel partners; (ii) increase our liquidity, and (iii) accelerate the execution of our core platform roadmap. During the year we delivered significant improvements in marketing capabilities, user experience and inventory competitiveness.”

The company also plans to ramp up Goki and Counter App, the Australia-based guest management technologies it  invested in August 2019 and January 2020, respectively.

Hostelworld also says its in-house property management system, Backpackers Online, will be phased out by the end of May.

Goals for the company going forward include adding to its inventory, buying or building core applications, developing  social tools and migrating to the cloud.

Hostelworld announced a $3 million investment in accommodation technology supplier Tipi in September 2019.

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