Hostelworld attributes plummeting profits to terror attacks and Brexit

Hostelworld attributes plummeting profits to terror attacks and Brexit

Budget online accommodation provider Hostelworld saw profits plummet last year in the face of terrorism and the Brexit vote.

Overall profit was down to just €800,000 from €81.2 million in 2015 as bookings fell back by 1% to 7.1 million.

Net revenue dropped by 4% or €3 million to €80.5 million for the 12 months to December 31, 2016.

However, adjusted annual earnings [EBIDTA] rose by 1% to €23.9 million, but the operating profit slumped from €7.2 million to €200,000.

Total transaction values in 2016 were down to €559 million from €634 million the previous year, while average commission rates increased to 13.8% from 13.1%.

Staff numbers were cut by 15 from 256 in 2015 to 241 last year.

Chief executive, Feargal Mooney, said: “As widely reported, 2016 was challenging for the travel industry, which had to contend with the impact of terrorist attacks and the implications of Brexit.

“Whilst our performance, particularly in our key European market during the second and third quarters of the year, was impacted by these events the group saw improved momentum in the latter part of 2016 which has continued through the first quarter of 2017.”

He added: “Our continued focus on key strategic initiatives is supporting year-on-year bookings growth, and together with our highly cash generative business model positions us well to benefit from continued market growth.”

The group’s main Hostelworld brand, which accounts for 87% of total business, achieved 18% bookings growth.

However, overall bookings declined by 1% due to weaker demand for European destinations, blamed on “geopolitical events”.

The company said it has continued to focus its attention and resources on the main Hostelworld brand, increasing its relevance to and reach among a target audience of young independent travellers.

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