Hostelworld Group - Backpacking them in

Hostelworld's pioneering and fast-evolving 'social' strategy is delivering aplenty. Material outperformance of the hostel market (FY23 bed nights sold up 30% vs industry 8%) and low-cost acquisition and retention of high-value customers (over a million social members after just 18 months) confirm the success of the company's app-centric model, which taps into the social media habits of its target demographic to mutual benefit. With reducing marketing percentage of revenue on track to meet the FY25 low-end target of 45% (48% in H223), the boon of higher leverage from an asset-light platform may be reinforced by the move to cloud-based hosting, development of complementary acquisition channels and use of AI. FY23 EBITDA of €18.4m clearly ahead of €17.5-18.0m guidance and a 'strong start to 2024' suggest company targets of c 20% EBITDA margin on c €106m revenue in FY25 are well in hand.

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