Hostelworld said its chairman of less than a year, Ulrik Bengtsson, has decided to step down later this year to take on a chief executive role at a “large internationally-based company”.
The announcement came as the hostel-booking company targeting millennial and Gen-Z backpackers reported on Thursday that its net profit jumped by 78 per cent to €5.1 million. It will be unveiling a detailed growth strategy on April 29th.
Hostelworld had previously disclosed that its net bookings rose 6 per cent last year to 6.9 million. However, revenues dipped 1 per cent to €92 million as customer demand shifted towards low-cost destinations in Asia and Central America.
Goodbody Stockbrokers analyst Dudley Shanley described the financial results as “strong”.
“However, the key highlight for most investors will be the fact that Hostelworld has also announced that it will provide a detailed growth strategy and capital allocation update on the 29th of April at a capital markets day,” he said.
Mr Bengtsson, who previously served as chief commercial officer at Virgin Media O2 and chief executive of bookmakers William Hill, joined Hostelworld’s board last May after deciding to focus on non-executive roles. However, the Swedish native said that the new chief executive opportunity was a “compelling” one.
“During my period at Hostelworld, we have worked intensively on the future growth strategy for the group, which will be outlined at our capital markets day in April,” said Mr Bengtsson, who will remain as chairman until the end of October. “I have great conviction in the growth potential of the company and the continuing success of the group’s distinctive social strategy.”
Hostelworld reached an important milestone in 2023 when it repaid €28.8 million of high-cost loans drawn down from US specialist lender HPS Investments three years ahead of schedule with the help of €17.4 million of much cheaper loans from AIB, all of which has since been paid back ahead of schedule. It had net cash of €2 million at the end of 2024.
The company also agreed with Revenue early last year to repay what then stood at €9.6 million of warehoused taxes, racked up during the Covid-19 pandemic, over the next three years.
Hostelworld has been winning back hostel bookings market share that had been ceded to general online travel agents such as Booking.com before the pandemic, helped by the introduction of a pioneering social network that invites customers into city and hostel chat groups before checking in.
Some 80 per cent of company’s bookings came from social members last year, which helped reduce marketing spend as a percentage of revenue.
“Looking ahead, we are confident that our distinctive social strategy will continue to be a key differentiator in the online travel market,” said chief executive Gary Morrison. “We will continue to invest in our technology and expand our social features to enhance the customer experience and drive future growth.”
