Hostelworld shares drop as conflict dampens travel demand

Hostelworld Group PLC on Wednesday said it expects to report full-year revenue growth, but warned that the Middle East conflict and other factors will "continue to weigh on volumes".

In response, Hostelworld shares fell 8.8% to trade at 93.00 pence on Wednesday afternoon in London.

The Dublin-based hostel-focused online travel agent reported third-quarter net revenue of EUR27.9 million, up 7% year-on-year, with the net average transaction value increasing 11% to EUR15.3.

The effective commission rate increased to 17.8% from 16.3%, "supported by the continued adoption of Elevate," Hostelworld added. Elevate is the company's rewards programme for hostels.

Adjusted earnings before interest, tax, depreciation and amortisation increased to EUR8.3 million from EUR7.9 million. The adjusted Ebitda margin narrowed to 30% from 31%, "reflecting continued investment in product and technology."

For the year to date, Hostelworld said net revenue has increased 10% on-year to EUR80.1 million, and that generated revenue has grown year-on-year in every week of 2026 so far. Adjusted Ebitda has risen to EUR16.5 million from EUR15.4 million.

However, Hostelworld said the Middle East conflict dampened long-haul volumes, with net transactions down 2% on-year to 1.6 million in the third quarter.

"Approximately 30% of our hostel bookings annually are on routes between Europe and Asia or Oceania," Hostelworld explained. "We estimate the conflict negatively impacted volumes by about four percentage points, with Asia and Oceania destinations most affected.

"The softness in long-haul demand has since extended beyond those routes, with higher travel costs and stronger destination currencies weighing particularly on demand between Europe and the Americas."

Looking ahead, Hostelworld expects "the Middle East conflict, together with the softer long-haul demand between Europe and the Americas, to continue to weigh on volumes for the remainder of the year and into 2027."

The company said it now anticipates full-year revenue growth of around 10%, and adjusted Ebitda between EUR20.0 million and EUR21 million with a margin of about 20%, up from EUR19.9 million for 2025.

It added that "as the benefit of Elevate on our commission rate annualises and assuming no recovery in long-haul volumes, the board now expects net revenue growth in the mid-single digits."

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