Long-Term Strategy to Generate Shareholder Value

Hostelworld to Outline Strategic Growth Plan at Capital Markets Day, Focusing on Scaling our Social Travel Network for Long-Term Value Creation and the Reinstatement of a Dividend

Hostelworld, the ground-breaking social network-powered Online Travel Agent ("OTA") focused on the hostelling category, provides an update ahead of a capital markets event this afternoon. The event will be hosted by CEO Gary Morrison, CFO Caroline Sherry, and CTO Chris Berridge at the offices of Deutsche Numis, 45 Gresham Street, London EC2V 7BF, at 2:00pm.

Long-Term Strategy to Generate Significant Shareholder Value

We have built a highly differentiated, scalable and cash generative business model. Our pioneering social travel network has delivered powerful network effects across our core hostel OTA platform, which has delivered meaningful cash generation in recent years.

This strong financial performance has enabled us to fully repay our outstanding debt, significantly strengthen our balance sheet and enable the business to invest in its next phase of growth.

Today, management will outline a new medium-term strategy centred on three key pillars:

• Strengthening the core business through increased hostel inventory, enhanced social platform capabilities powered by AI and enhanced marketplace monetisation to increase revenues
• Expanding the addressable market
• Supplementing our hostel inventory with additional budget accommodation options to increase customer growth and conversion rates
• Expanding our travel product range to include additional products that are highly relevant to youth travellers
• Leveraging the value of expanding, proprietary social network data set to unlock new and exciting revenue streams
• Selective M&A: Exploring complementary acquisitions aligned with our strategic objectives that can accelerate growth, extend our capabilities and help drive incremental shareholder returns.

This new strategy is expected to deliver meaningful long-term value creation with the Company targeting:

• Low double-digit revenue growth in 2026 and 2027, pre-M&A
• Marketing as a % of revenue of 45 - 50%
• Adjusted EBITDA margin greater than 20%
• Adjusted Free cash flow (FCF) conversion of circa 70%

Commitment to Shareholder Returns

With our consistently strong cash generation, strengthened balance sheet and confidence in our growth strategy, we are pleased to announce the reinstatement of a progressive dividend policy of 20% - 40% of adjusted profit after tax starting with an interim payment in the second half of FY 2025. In addition, the company will introduce a share buy-back programme, subject to market conditions and taking into account other investment opportunities.

Current Trading

The group continues to deliver a resilient performance, despite the recent weakening of the US dollar and a persistent shift in traveller preferences towards lower-cost destinations; both of which are leading to a less favourable booking mix and average booking value (ABV).

While it is still early in the year and the summer booking season hasn't yet reached its peak, if current trends persist, we anticipate achieving mid-single-digit revenue growth for the full year.

The presentation will be available on the Group's website at 2:00pm via the following link:

A live webcast of the event can be viewed via the following link:

MAR information

For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is being made on behalf of the Company by Caroline Sherry, Chief Financial Officer.