Hostelworld has reported a 12% rise in revenues to €52.2 million (£44.5 million) for the first half of 2024, driven by higher commissions from hostels using its new Elevate tool to boost their listings, even as the Middle East conflict dampened demand for long-haul travel.
Bookings Growth Slowed by Geopolitical Tensions
Total bookings increased by just 1% to 3.8 million, indicating that revenue growth was primarily fuelled by the value of each booking rather than volume. Hostelworld attributed the sluggish booking growth to the ongoing conflict in the Middle East, which particularly affected long-haul trips to Asia and Oceania.
Elevate Tool Drives Commission Rate Higher
The company’s new marketplace monetisation feature, Elevate, allowed hostels to pay extra fees for higher placement in search results. This lifted the effective commission rate from 15.8% to 17.7% year-on-year. Hostelworld generates revenue from commissions on bookings and listing fees paid by hostels.
Chief Executive Gary Morrison said the impact of the Iran war “intensified” between April and June, reducing bookings growth by approximately 3% over the first half. “Demand in Europe and North America was more resilient,” he added.
Outlook and Full-Year Guidance
Hostelworld expects the disruption from the Middle East conflict to ease in the second half, with broader trading conditions normalising. The company’s full-year guidance assumes a recovery in long-haul travel demand.
Despite the geopolitical headwinds, the group benefited from its chatroom app that connects travellers booked into hostels in the same area, enhancing customer engagement and loyalty.
