Half Year 2025 Hostelworld Group PLC Earnings Call Transcript
Key Points
- Net bookings and Average Booking Value (ABV) showed recovery starting in late May, driven by European destinations and the launch of the Eleva monetization tool.
- The social network strategy is gaining traction, with 85% of bookings made by social members, and app bookings growing by 11% year-over-year.
- The Eleva tool increased commission rates from 15.2% to 15.8%, helping offset bed price deflation and a weaker US dollar.
- Strong cash conversion with 65% of EBITDA converted to cash, resulting in a closing cash position of 11 million.
- Strategic initiatives, including social platform monetization and budget accommodation, are on track for launch, expected to expand the addressable market.
- Overall revenue was flat for the first half, with net revenue growth contracting in Q1 before recovering.
- Paid marketing costs increased due to cost per click inflation, raising marketing expenses to 51% of net revenue.
- Net margin contracted by 11% to 19.8 million due to temporary cost inflation and flat operating expenses.
- Adjusted EBITDA decreased by 23% from H1 2024, with a margin of 16%, down 5% from the previous year.
- North America and Canada experienced a 4% decline in customer bookings, impacting overall performance.
Good morning, everyone. Welcome to Hostelworld Group PLC 2025 interim results. I'm joined today by
Caroline Sherry, our CFO, and David Brady, Head of Commercial Finance and Investor Relations. So turning to the next slide, I will take the usual disclaimers as read.
Moving through the highlights slide and we'll start with our financial summary. So, I'm going to start today by discussing our financial results in the context of customer trends year-over-year, our social strategy performance, Operating investments, and how we have deployed our operating cash flow.
So, if we start with net bookings and net ABV2, Q1 started off with a decline in Net Booking and ABV growth rates, which then returned to growth in late May into June, and this momentum is continuing into July.
So, Net Booking's growth recovery from late May into June and continue in July is being driven primarily by Europe as a destination returning to growth.
Net ABV growth, however, is being driven from late May by the release of Eleva,
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