DAVY VIEW

Hostelworld released its interim results this morning. Given that much of the detail had been pre-released, key for us is the outlook and commentary on trends. This highlights four key items: (i) net bookings continue to grow, particularly in low-cost destinations; (ii) hostel supply is growing, with market coverage increasing 3% year-on-year (yoy); (iii) the group’s cost discipline continues to deliver strong margins; (iv) efficient cash generation has enabled the group to repay all interest-bearing debt ahead of schedule. However, with softer-than-expected net revenue in H1’24 and low average booking value (ABV) trends expected to continue into the back half, attention now turns to how management plans to reinforce top-line growth for the rest of the year.