Hostelworld Group plc (LON: HSW) has reported a 5% year-on-year increase in generated revenue for the third quarter, driven by higher bookings and average booking values, reinforcing its full-year adjusted EBITDA guidance, aligning with market expectations.
The company’s trading update for the nine months ending September 30, 2025, points to positive momentum and strategic execution.
Q3 revenue growth was fueled by a 2% increase in bookings and a 3% rise in Average Booking Value (ABV). A significant factor in this performance was an improved effective commission rate, which climbed to 16.3% from 15.2% in Q3 2024, primarily due to the successful implementation of the ‘Elevate’ marketplace tool.
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Direct marketing costs as a percentage of revenue also saw improvement, decreasing to 47% in Q3, compared to 49% in Q3 2024 and 51% in the first half of 2025.
Year-to-date net revenue remained broadly flat at €72.6 million, reflecting a 1% growth in net bookings offset by lower deferred revenue benefits compared to the previous year. Adjusted EBITDA for the period was €15.4 million with a 21% margin, down from €17.8 million and 25% in YTD 2024, due to planned investments in growth initiatives and the timing of deferred revenue.
Hostelworld’s solid balance sheet features a closing cash position of €10.9 million and net cash of €6.6 million. The share buy-back program is progressing, with £2.2 million shares purchased year-to-date. Furthermore, the company reinstated a progressive dividend, paying an interim dividend of 0.82€ cent per share on September 19, 2025.
The company maintains its full-year 2025 adjusted EBITDA guidance, which remains in line with the current market consensus of €19.8 million. This reiteration provides reassurance to markets amidst ongoing strategic investments.
CEO Gary Morrison stated, “Our third-quarter results show that the strategic plan we announced at our Capital Markets Day is delivering positive results,” reinforcing the company’s focus on revenue growth, commission rate improvements, and marketing efficiency.
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