The Ireland-based, London-listed company reported a 15% year-on-year decline in underlying earnings (EBITDA) to €8.9mln for the first half of the year and said full-year EBITDA was also likely to be lower than last year.
As well as its markets remaining “highly competitive” into the peak period, with gross bookings down 3% to 3.7mln and revenue falling 9% to €38.8mln, management have also had to spend more than they anticipated on performance marketing.
On top of that, chief executive Gary Morrison wants to step up investment in his ‘Roadmap for Growth’ project during the second half of the year, where he said “good progress” had been made in the first half, including improving the search platform, online content and “connectivity” with hostel partners and suppliers.
The interim dividend was cut to 4.2 euro cents per share from 4.8 cents a year ago, as adjusted earnings per share fell 19% to 6.44 euro cents.
With Hostelworld agreeing a strategic investment in Tipi, a technology company focused on a ‘new way of renting’, Morrison said this would “enhance our product offering for both our customers and hostel partners”.
He added: “I believe the operational and strategic improvements we have put in place in the first half, should enable us to return the business to volume growth during 2020 and we continue to assess opportunities, both organic and inorganic, which could enable us to accelerate that growth.”
Shares in the company dropped 15% to 138p in early trading on Wednesday.