In an AGM statement released to shareholders this morning Hostelworld PLC (LON:HSW) traded at 190.00 down -26.14% 10:19AM BST after the Irish hostel booking company said it has traded “below expectations” in the second quarter of its financial year.
On reflection the company said that ‘recent geo-political events, particularly in Europe’ such as the terrorist attacks on Paris and Brussels were a strong influence behind the dip in trade.
Bookings into higher priced European destinations were weaker whereas the Asia-Pacific region continued to be its fastest growing area due to an increase in hostelers travel preferences.
With Group bookings ‘marginally lower’ compared with its previous year, the company expects its recent launch of its digital advertising campaign to support key summer trades. However the company said it has continued to see strong bookings growth in the Hostelworld brand.
Hostelworld also said it expects marketing investment in its cost-per-click as a percentage of net revenue coming in at below the previous guidance of between 45-50% on a full year basis.
“The trends in bookings and Average Booking Value that we have seen in the travel market, particularly into higher priced European destinations, while partially offset by improved marketing efficiency, means that the year’s outturn will be dependent on a recovery in key European destinations over the important summer travel season, and we remain mindful of the exchange rate environment.
“Hostelworld will continue to actively respond to movements in demand, supply and pricing. The strength of our brand and technology, underpinned by a growing marketplace, gives the Board confidence in the Group’s future prospects”
By Aaron Kidd