TIDMHSW
RNS Number : 8339I
Hostelworld Group PLC
29 November 2018
LEI:213800OC94PF2D675H41
Hostelworld Group plc
("Hostelworld" or the "Group")
Strategy update and Trading update
Investing for Growth
29 November 2018: Hostelworld, the global hostel-focused online
booking platform, will host a Capital Markets Day for analysts and
institutional investors this afternoon in London from 12.45pm.
The purpose of today's presentations is to provide an overview
of the main findings of the strategic review conducted by Gary
Morrison, following his appointment as Chief Executive Officer
(CEO) in June 2018.
The event is being hosted by the CEO and other members of the
senior management team.
The presentation will also provide more detail about future
priorities and specific actions designed to return the business to
growth, a number of initiatives which have already commenced during
H2 2018, and which will enable the company to reaffirm its position
as the leading hostel-focused online booking platform.
Key highlights of strategy review:
- Operating in an attractive, growing market, Hostelworld is
ideally positioned to capitalise on the clear opportunity for a
hostel focused OTA to provide solutions to the unique needs of the
hostelling industry;
- A strengthened management team is now in place;
- The strategy is to enhance competitiveness and deliver a
return to growth by focusing on investment in core customer
acquisition and core platform enhancements; and
- The strategy will be supported by investments during 2019,
including an expansion of the existing Porto development centre,
with the benefits expected to be seen in 2020.
Trading update:
EBITDA for the full year to 31 December 2018 is expected to be
in line with the Board's expectations. As communicated at the time
of the Company's interim results in August 2018, growth in Group
like-for-like gross bookings is likely to be flat for the full
year, given the expected declines in our supporting brands.
Continued effective management of our cost base, combined with
strong ABV, is helping to offset the impact of flat bookings. We
continue to see strong underlying cash conversion in 2018. The
rollout of our free cancellation product has started well and
cancellation rates are performing in line with expectations.
The initiatives identified as part of the strategic review will
require additional investment during 2019, with growth in bookings
expected to be seen in 2020. However, the Board expects the
business to return to modest EDITDA growth in 2019.
Gary Morrison, Chief Executive of Hostelworld, commented:
"I'm pleased to be announcing the results of my strategic review
and details of my growth strategy, which will enable us to
stabilise and strengthen our core platform and return Hostelworld
to growth.
We are operating in an attractive and growing market, with a
strong and trusted brand, providing relevant and valuable customers
to the hostel sector. We will invest in our core products, platform
and capabilities as we strive to improve the hostelling experience
for travellers and enhance our technology offering for the benefit
of our core hostel partners.
I am hugely encouraged by the energy and opportunities in the
business and believe we have an exciting future ahead. I am
confident that we now have the strategy and management team in
place which will enable us to build on the strong foundations of
the business, increase our competitiveness and capitalise on the
significant opportunity to take Hostelworld to the next stage of
sustainable growth as the leading hotel focused online booking
platform".
Overview of the Strategic Review
The review undertaken over the last six months has highlighted
the opportunity for significant growth for the business. The
positive market dynamics showcase the potential pace of growth,
which a purely hostel focused business can exploit. The strength
and depth of the Hostelworld Brand, valuable customer base,
internal management capabilities, combined with the significant
data assets and strength in native app development, positions the
business well for the next phase of sustainable growth.
A number of focus areas have been identified most notably a lack
of investment in the core platform and the focus on short term
monetisation levers, all of which the long-term investment strategy
will aim to address.
Roadmap to Growth
Over the last few months the CEO has identified and developed a
'Roadmap for Growth', starting with the strengthening of the
management team to capitalise on the significant opportunities for
the business. The recently appointed CFO, TJ Kelly, started on 21
November 2018 and there have been a number of internal
promotions.
In addition to the personnel changes, we have also significantly
evolved the product and technology organisations into an Agile
development operating model. A number of initiatives have already
commenced during H2 2018 to enhance Hostelworld's competitive
position. There has been a refocusing of the marketing activities
on core customer acquisition and leveraging the rich data assets to
capture incremental 'multi destination trip' customers.
We have also sought to significantly improve the core search
experience, through a targeted sort order optimisation strategy,
with the ultimate goal of ensuring the 'right hostel for the right
customer at the right time'.
As we look to 2019 as an investment year to fund 'return to
growth' drivers in 2020, there will be a number of key focus areas
for the business to strengthen the core platform focused on
providing greater flexibility in the areas of:
-- Unique hostel content and improved localization;
-- Improved booking experience (payment types, currencies & online change/cancel);
-- Rate plan configurations; and
-- Improved 3(rd) party platform connectivity.
Growth will be self funded from existing cash resources and cash
generated from the business. Appropriate deployment of capital
against organic and inorganic growth opportunities as well as
returns to shareholders, will be subject to continual assessment
and appraisal by the Board.
Event details
A presentation will be held this afternoon at 12.45pm at St
Christopher's Inns Village Hostel, 165 Borough High Street, London,
SE1 1HR. To register your attendance, please contact Powerscourt on
the details below. A copy of the presentation made to attendees
will be made available on the Company's website at
http://www.hostelworldgroup.com/investors/reports-and-presentations/2018.
ENDS
For further information please contact:
Hostelworld Group plc
Gary Morrison/TJ Kelly/Ruthanne
Monaghan +353 (0) 1 498 0700
Powerscourt hostelworld@powerscourt-group.com
Lisa Kavanagh/Jana Tsiligiannis + 44 (0) 20 7250 1446
Jack Hickey/Eavan Gannon +353 83 4488 339 / + 353 87 236
5973
About Hostelworld Group
Hostelworld Group is a global hostel-focused online booking
platform. Connecting travellers with hostels around the world,
Hostelworld offers more than ten million customer reviews across
36,000 properties in more than 170 countries, making the brand the
leading online hub for social travel. The website operates in 19
different languages and mobile app operates in 13 different
languages.
Hostelworld travellers are a unique, passionate breed; they want
to see the world, make new connections and crave the adrenaline of
new adventures. Hostelworld inspires them to 'Meet the World'
through the social nature of hostels that turbo-charges their
journeys and helps create unforgettable memories.
Headquartered in Dublin, Hostelworld has offices around the
world in London, Porto, Shanghai and Sydney with approximately 280
employees. The Hostelworld Group listed on the main London and
Irish stock exchanges in November 2015.
This announcement contains forward-looking statements. These
statements relate to the future prospects, developments and
business strategies of Hostelworld. Forward-looking statements are
identified by the use of such terms as "believe", "could",
"envisage", "estimate", "potential", "intend", "may", "plan",
"will" or variations or similar expressions, or the negative
thereof. Any forward-looking statements contained in this
announcement are based on current expectations and are subject to
risks and uncertainties that could cause actual results to differ
materially from those expressed or implied by those statements. If
one or more of these risks or uncertainties materialise, or if
underlying assumptions prove incorrect, Hostelworld's actual
results may vary materially from those expected, estimated or
projected. Any forward-looking statements speak only as at the date
of this announcement. Except as required by law, Hostelworld
undertakes no obligation to publicly release any update or
revisions to any forward-looking statements contained in this
announcement to reflect any change in events, conditions or
circumstances on which any such statements are based after the time
they are made.
This information is provided by RNS, the news service of the
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END
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