Hostelworld Group PLC AGM Statement (3305Z)
26 Mai 2016 - 8:00AM
UK Regulatory
TIDMHSW
RNS Number : 3305Z
Hostelworld Group PLC
26 May 2016
Hostelworld Group plc
("Hostelworld" or the "Group")
AGM Statement
As we reported in early April, the Group made good progress in
the first quarter of the year, with continued strong growth in our
flagship Hostelworld brand, improved efficiencies in our marketing
mix, and continued geographic expansion and digital engagement
across our key social platforms.
Reflecting recent geo-political events, particularly in Europe,
trading over the second quarter has been at a level below our
expectations. Whilst during this period Asia Pacific continued to
be our fastest growing destination region, driven by hostellers'
travel preferences and our increased supply in that geography,
bookings into higher priced European destinations have been
weaker.
We have continued to see strong bookings growth in the
Hostelworld brand and launched our new Hostelworld brand
advertising campaign, "In Da Hostel with 50 Cent", across digital
channels last week, which we expect will support the key summer
trading period. Planned changes to our supporting brands' product
offering and focus on improving the quality of our revenue streams
have resulted in a material reduction in bookings from these
channels. Overall, Group bookings are therefore marginally down
compared to last year.
Average booking value has been lower this year, reflecting the
evolving geographic mix, the continued higher proportional growth
in mobile bookings, which tend to be of shorter duration, and
exchange rate movements, particularly in relation to GBP which is a
key settlement currency for the Group. Our Elevate pricing
programme, which attracts higher commissions, continues to grow in
line with our expectations.
We are focused on optimising our financial performance and are
making better than anticipated progress in gaining further
efficiencies in direct costs with continued good management of
cost-per-click. We expect that this will result in marketing
investment as a percentage of net revenue coming in below the
previous guidance of 45%-50% on a full year basis. We continue to
see strong underlying cash conversion.
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.
ENDS
Contacts:
Hostelworld Group plc
Feargal Mooney, Chief Executive Officer
Tel: +353 (0) 1 498 0700
Weber Shandwick
Nick Oborne
Tom Jenkins
Tel: +44 (0) 20 7067 0000
This information is provided by RNS
The company news service from the London Stock Exchange
END
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