Hostelworld Group PLC (LON:HSW) said it “modest” expectations for 2021 as the vaccine rollout continues globally.
In an interview with Proactive, chief executive Gary Morrison forecast a steady increase in activity through the year, as activity recovery depends on how restrictions are eased.
In fact, last summer the hostel operator noticed a strong correlation between how travel restrictions were easing at the time and how bookings were flowing.
“We now know that the reopening in the UK is going to be in May and it’s great for the industry to have a date to work towards. We expect the UK to benefit from its early rollout of vaccinations relative to other markets, especially considering young people’s desire to travel has remained strong over the last 12 months,” said Morrison.
“Currently, we see most demand and bookings coming from North America, Latin America, Asia, Australia and New Zealand where there's been more ease of movement for some time. More recently, we have started to see an increase in demand in Europe as more timelines are being provided around summer travel possibilities.”
The company is confident in its prospects after seeing customer engagement on its online channels, while a survey from last year revealed that 52% were ready to travel within the next six months if it were allowed.
The research, involving 3,000 travellers, was conducted by Hostelworld in partnership with global hostel partners.
In the year to December 31, net booking volumes declined by 79%, with revenue plunging 81% to €15mln.
The firm also slumped to an underlying loss of €17mln from a €20mln profit in 2019.
It did not declare a dividend to protect its cash position, which stood at €18mln at year-end before a new €30mln term loan facility was secured in February.
“As expected there is no quantitative comment on current trading and we expect bookings will remain at a very low level,” analysts at Peel Hunt commented.
“We will revisit our cautious stance once trading has restarted in earnest and we reiterate our ‘Reduce’ recommendation and 65p target price.”
Shares dipped 1% to 88.3p on Wednesday at midday.