Hostelworld Group (LON:HSW) outlined an acceleration in trading through the second half of 2025 and into early 2026, while highlighting progress on new initiatives designed to expand the company beyond its core hostel online travel agency (OTA) model.
2025 results showed a stronger second half
Management said net bookings in 2025 were 7 million, up 1% year-over-year, with net average booking value (ABV) of EUR 13.43, up 2%. Net revenue rose 2% to EUR 93.8 million, though executives emphasized that full-year growth masked a meaningful shift in trajectory through the year.
On profitability, adjusted EBITDA was EUR 19.9 million, representing a 21% margin that management said was slightly ahead of its guidance range and in line with market consensus. EBITDA declined from EUR 21.8 million in 2024, which management attributed primarily to increased investment—particularly headcount—aimed at building and launching budget accommodation, Social Passes, and integrating the OccasionGenius acquisition. The CEO said the hiring ramp was completed by year-end 2025 and that the company does not contemplate further headcount increases in 2026.
Marketing efficiency and app engagement
Hostelworld reported marketing spend of 48% of revenue for the full year, within its 45% to 50% guidance range, but above 46% in 2024. Management attributed the higher full-year ratio to cost-per-click (CPC) inflation experienced in the first quarter of 2025. The company said the second half marketing ratio improved to 45%, and in Q4 marketing as a percentage of revenue fell to 43%—below the guidance range—alongside double-digit revenue and margin growth.
Executives also pointed to rising app usage. The proportion of bed nights booked via the app reached 63% in 2025, up from 60% in 2024, with management noting app bookings are structurally lower cost and drive greater social engagement.
Elevate, Social Passes, and budget accommodation expand the model
The company framed 2025 as a year of delivering six commitments made at its April 2025 Capital Markets Day, including the launch of Elevate (a new hostel ranking and monetization tool), the introduction of Social Passes, expansion into budget accommodation through third-party inventory, and the acquisition of OccasionGenius.
- Elevate: The company said effective commission rates in the second half of 2025 reached 16.7%, up from 15.4% in the second half of 2024. Management also noted commission rates increased from 15.8% in the first half of 2025 to 16.7% in the second half and continued to rise in early 2026. In the first quarter of 2026, Hostelworld cited commission rates of 17.7%.
- Budget accommodation (third-party inventory): Hostelworld said it launched in 50 destinations in December 2025 and subsequently expanded across 18,000 destinations for iOS app users in English. Management said 12% to 13% of customers using the third-party inventory offering are new to Hostelworld, with cancellation rates roughly in line with directly contracted inventory and similar social network usage. Rollout to additional platforms and languages is underway in 2026.
- Social Passes: Launched in mid-November 2025, Social Passes create time-bound paid access to Hostelworld’s social network for travelers who may not book accommodation. Management said 37% of Social Pass buyers are new to Hostelworld and described early product mix as roughly two-thirds weekly passes and one-third monthly passes. Pricing discussed on the call included EUR 4.99 for a weekly pass, EUR 9.99 for a monthly pass, as well as longer-duration options (EUR 19.99 for three months and EUR 59.99 for an annual pass). The CEO said the company has not yet optimized pricing and expects to test pricing later, after scaling marketing activation beginning in Q2.
Management also discussed how new products may affect blended revenue per transaction over time. The CEO said budget accommodation earns approximately half the commission rate of directly contracted inventory, and Social Pass revenue per transaction is below the EUR 13.43 earned per transaction on directly contracted inventory in 2025. As these products scale, management expects overall growth to be increasingly driven by transaction volumes rather than revenue per transaction.
OccasionGenius integration and the “AI era” positioning
Hostelworld emphasized its view that social and events data could become more valuable as travel discovery shifts toward AI-assisted and socially contextual queries. The company cited 3.4 million social members and said member messaging grew 81% year-over-year. Management also reported that social members book approximately twice as frequently as non-members and are three times more likely to book on the app.
The company said OccasionGenius adds a proprietary “events and things to do” layer covering 300 cities initially, expected to scale to 700 cities by the end of the first half of 2026, and referenced a longer-term figure of 750 cities with daily updated content. Integration into the main platform is on track for late Q2 2026. Management argued that combining social profiles, messaging, bookings, and events creates interconnected “data loops” that can improve recommendations and engagement.
Hostelworld also discussed planned technical work to support AI “agent connectivity,” including MCP connectivity expected to go live in Q2 2026 and ongoing schema.org markup of pages. Management noted that how AI agent economics will evolve remains an open question, but said structured social data is a prerequisite to being surfaced in AI-driven travel discovery.
Balance sheet, shareholder returns, and Q1 2026 trading commentary
Hostelworld ended 2025 with EUR 12.2 million of cash, up from EUR 8.2 million at the start of the year, and a net debt position of EUR 1.6 million, which management said reflected drawing a EUR 10.3 million AIB facility to fund the OccasionGenius acquisition. The CFO said the debt facility is a three-year arrangement priced at 2% over Euribor and noted there is no early repayment penalty. The company also continued repaying warehoused payroll taxes owed to Irish Revenue Commissioners, paying EUR 2.7 million in 2025 and leaving EUR 3.5 million outstanding, which is due to be repaid in full by May 2027.
On capital returns, management said it reinstated a dividend in 2025, totaling EUR 0.024 per share for the year, comprising an interim dividend of EUR 0.0082 per share paid in September and a proposed final dividend of EUR 0.0158 per share payable in May 2026. The company also launched a GBP 5 million share buyback in June 2025 and reported that GBP 3.9 million of shares had been repurchased and canceled by year-end; management said the program is substantially complete.
In Q&A, executives described Q1 2026 as delivering a second consecutive quarter of double-digit revenue growth, with booking volume growth expected to be around 3% and revenue growth greater than 12%. The CFO said ABV performance was strong across regions, supported by Elevate, bed price inflation, and favorable geographic mix, while noting a headwind from the U.S. dollar translation into euros. Asked about conflict in the Middle East, the CFO said the impact for Hostelworld was less about direct source or destination exposure and more about travel corridors due to the region’s role as a layover for long-haul travel, contributing to some softness in Oceania and Asia. She added that elevated cancellations had normalized and said strength in Europe more than offset the softness.
Management reiterated its marketing guidance range of 45% to 50% of revenue and said it views the range as providing flexibility to invest in customer growth. The CEO also restated Capital Markets Day targets, including low double-digit revenue growth, marketing at 45% to 50% of revenue, adjusted EBITDA margin above 20%, and adjusted free cash flow conversion of approximately 70%.
About Hostelworld Group (LON:HSW)
Hostelworld Group plc operates as an online travel agent focused on the hostel market worldwide. It offers software and data processing services that facilitate hostel, B&B, hotel, and other accommodation bookings. The company also provides business information consulting and marketing planning services; and marketing and research and development services, as well as management services. In addition, it engages in the technology trading business. The company was founded in 1999 and is based in Dublin, Ireland.
