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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Hostelworld Group Plc | LSE:HSW | London | Ordinary Share | GB00BYYN4225 | ORD EUR0.01 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 4.00 | 2.55% | 161.00 | 157.50 | 160.50 | 160.50 | 158.00 | 160.00 | 2,597,221 | 16:35:29 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Hotels And Motels | 93.26M | 5.14M | 0.0416 | 38.58 | 198.22M |
From Apr 2021 to Apr 2024
TIDMHSW
RNS Number : 5054H
Hostelworld Group PLC
06 April 2022
LEI: 213800OC94PF2D675H41
6 April 2022
Hostelworld Group plc
("Hostelworld" or the "Company")
Publication of Annual Report for 2021 and Notice of 2022 Annual General Meeting
Annual Report and Accounts
Hostelworld, the world's leading hostel-focused online booking platform, is pleased to announce that its Annual Report 2021 has been posted or is being made available to shareholders today.
Annual General Meeting
The Company confirms that its Annual General Meeting will be held at 12 noon on Wednesday 11 May 2022 at the offices of the Company, Floor 3, Charlemont Exchange, Charlemont Street, Dublin 2, Ireland. A Circular, containing the Chairman's Letter and Notice of 2022 Annual General Meeting, and a Form of Proxy have also been posted or are being made available to shareholders today.
Documents available for inspection
The following documents:
-- Annual Report 2021; -- Circular containing the Chairman's Letter and Notice of 2022 Annual General Meeting; and -- Form of Proxy;
have been submitted to the Financial Conduct Authority via the National Storage Mechanism, and the Irish Stock Exchange (trading as Euronext Dublin), and will shortly be available for inspection at the following locations:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
and at:
Companies Announcements Office
Euronext Dublin,
28 Anglesea Street,
Dublin 2
The Annual Report 2021 has also been filed with the Central Bank of Ireland.
The Annual Report 2021, the Circular containing the Chairman's Letter and Notice of the 2022 Annual General Meeting and the Form of Proxy are available on the Company's website at www.hostelworldgroup.com.
Regulated Information
In accordance with DTR 6.3.5(1A), the unedited full text of the regulated information required to be made public under DTR 4.1 is contained within the 2021 Annual Report which has been uploaded to the National Storage Mechanism and is available on the Company's website www.hostelworldgroup.com.
The information set out in the Appendix, which is extracted from the Annual Report 2021, is included for the purposes of complying with Regulation 33(5)(b)(ii) of the Irish Transparency Regulations 2007 (as amended) and its requirements on how to make public annual financial reports. The information in the Appendix should be read in conjunction with the Company's preliminary results for the year ended 31 December 2021 released on 31 March 2022 which can be viewed at www.hostelworldgroup.com. Together, these constitute the material required by Regulation 33(5)(b)(ii) to be communicated in unedited full text through a Regulatory Information Service.
Contacts:
Hostelworld Group plc
Caroline Sherry, Chief Financial Officer
John Duggan, General Counsel & Company Secretary
Tel: +353 (0) 86 022 3553
Appendix:
Directors' Responsibilities Statement
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors are required to prepare the Group financial statements in accordance with UK-adopted international accounting standards and applicable law. The Directors have also elected to prepare the Group financial statements in accordance with International Financial Reporting Standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union and to prepare the parent Company financial statements in accordance with FRS 101 Reduced Disclosure Framework ("Relevant Financial Reporting Framework") and applicable law. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the assets, liabilities and financial position of the Group and Company and of the profit or loss of the Group for that period.
In preparing the parent Company financial statements, the Directors are required to:
-- Select suitable accounting policies and then apply them consistently; -- Make judgments and accounting estimates that are reasonable and prudent;
-- State whether Financial Reporting Standard 101 Reduced Disclosures Framework has been followed, subject to any material departures disclosed and explained in the financial statements; and
-- Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
In preparing the Group financial statements, International Accounting Standard 1 requires that Directors:
-- Properly select and apply accounting policies;
-- Present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
-- Provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Group's financial position and financial performance; and
-- Make an assessment of the Company's ability to continue as a going concern.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Responsibility Statement
We confirm that to the best of our knowledge:
-- The financial statements, prepared in accordance with the Relevant Financial Reporting Framework, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole;
-- The Strategic Report includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face; and
-- The Annual Report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's position and performance, business model and strategy.
This responsibility statement was approved by the Board of Directors on 30 March 2022 and is signed on its behalf by:
John Duggan
Company Secretary
30 March 2022
Principal risks and Uncertainties
The Board takes overall responsibility for identifying the nature and extent of the risks to be managed by the Group to ensure the successful delivery of its strategic and business priorities. The Audit Committee monitors certain risk areas and the internal control system, as set out in the report on governance. The Group's risk register identifies key risks including any emerging risks and monitors progress in managing and mitigating these risks and is reviewed regularly during the year by the Audit Committee and at least annually by the Board. Emerging risks are identified from areas of uncertainty, which may not have a significant impact on the business currently but may have the potential to adversely affect the Group in the future.
The Group's risk register process is based upon a standardised approach to risk identification, assessment and review with a focus on mitigation. Each risk identified is subject to an assessment incorporating likelihood of occurrence and potential impact on the Group.
The Group's risk register is subject to review by the Executive Leadership Team ('ELT') prior to reporting to the Audit Committee and Board.
The Board has reviewed the principal risks and uncertainties against the on-going impact of the COVID-19 pandemic. The Board has ensured that all relevant risks were updated accordingly to incorporate the adverse effect the pandemic has had on the business and results of operations. The Board also recognises the continuing levels of uncertainty and risk of further pandemics and together with management continues to closely monitor and assess the Group's risks. In their review the Board have also taken into account inflationary pressures which contribute to a rising cost base.
The most material risks facing the Group are set out in the following table, together with comments on how they are managed to minimise their potential impact. While the following table is not prioritised nor an exhaustive list of all risks that may impact the Group, it is the Board's view of the principal risks at this point in time. Individually or together, these risks could affect our ability to operate as planned and could have a significant impact on revenue and shareholder returns. Additional risks and uncertainties, including those that have not been identified to date or are currently deemed immaterial, may also, individually or together, have a negative impact on our revenue, returns, or financial condition.
The Board also considered its obligations in relation to providing both the annual viability and going concern statements and its conclusions can be found in the Directors Report to the annual report and within note 1 to the consolidated financial statements within the annual report.
Hot Features
Premium
No Category Description and Impact Management and Mitigation Direction
of change
1 Macro-Economic Revenue is derived In circumstances where Increased
Conditions from the wider leisure events cause a material
travel sector. decline in consumer
The COVID-19 pandemic travel behaviours
and the resulting and patterns on a
measures, including global scale, such
travel restrictions, as the COVID-19 pandemic,
implemented by governments management will take
around the world to necessary actions
reduce the spread to conserve cash.
of COVID-19 has resulted There has been an
in an unprecedented increased and on-going
decline in consumer focus by the Group
spending, travel and on liquidity management.
related activities. New sources of debt
This pandemic has financing were received
adversely affected in February 2021 which
our business and the provides additional
outlook for the future flexibility to support
remains uncertain the Group as it recovers
at present with the from the impact of
extent of the pandemic the COVID-19 pandemic.
and the effect on Our business is a
our business still global one, with a
unknown. The impact dispersed population
is dependent on future of users, and a geographically
developments such dispersed set of destinations.
as the resurgence Whilst market conditions
of the COVID-19 virus, may decline in certain
impact of vaccines regions, the globally
and the duration and diversified nature
severity of travel of the business helps
bans, and lockdowns to mitigate this with
put in place by governments. c.50% of destination
It is not yet known markets in Europe
when international and c.50% in rest
travel will return of world.
to normal levels. Our target 18-34 year
Our business has always old population tend
been impacted significantly to be both flexible
by perceived or actual as to destination
economic conditions and are less risk
outside of our direct adverse.
control including FX movements may impact
slowing or negative travel decisions and
economic growth, rising travel patterns by
inflation rates, rising customers, but typically
unemployment rates, there is a degree
weakening currencies, of counterbalancing
higher taxes or tariffs movement e.g. the
which all can impair weakening of the US
customer spending dollar against the
and adversely affect euro means fewer US
travel demand. In travellers visiting
addition, events such the eurozone, but
as unusual or extreme decreased marketing
weather, travel related costs from US dollar
health concerns including denominated suppliers
the COVID-19 pandemic such as Google. Rising
mentioned above or inflation rates can
travel-related accidents impact customer discretionary
can disrupt travel spending and reduce
and result in declines their ability to travel.
in travel demand. We feel this is offset
Because these events in the near future
or concerns are largely by a pent-up demand
unpredictable, influencing from a lack of travel
customer demand and through 2020 and 2021.
behaviour, they can FX translation risk
adversely affect our is mitigated through
business and results matching foreign currency
of operations. cash outflows and
The above and other foreign currency cash
macroeconomic conditions inflows and by minimising
can also cause significant holdings of excess
volatility in foreign non-euro currency
exchange rates between above anticipated
the US dollar and outflow requirements.
the euro, the British
pound sterling and
other currencies.
Such volatility can
have a material impact
on travel demand and
travel patterns therefore
impacting revenue.
--------------- ------------------------------------------------------------ ------------------------------------------------------------ ----------
2 Working COVID-19 has had a When COVID-19 began Increased
Capital detrimental impact there was a robust
Investment on the travel sector assessment taken by
and Going and a very significant the Directors of principal
Concern impact on working risks facing the Group
capital resources. including those that
Our ability to access threaten its business
liquidity is constrained model, future performance,
by our trading volumes solvency or liquidity.
in a COVID-19 environment New funding was received
and the availability through an equity
of funding. With low raise and debt financing.
revenue volumes there The Group has performed
is a risk that the weekly forecasting
Group does not have of cash resources
the financial resources and monitored closely
to pay its liabilities the covenants and
as they fall due. obligations caused
Liabilities have also by the term loan facility
increased due to rising agreement in place.
inflation rates. This Monthly reporting
also directly impacts has been put in place
our ability to invest to ensure the terms
and grow which is of the term loan facility
constrained by our and related reporting
financial resources. requirements are adhered
When COVID-19 commenced to.
the Group implemented Key metrics and reporting
a number of key controls are reviewed regularly
to address any working in the Group's management
capital concerns including accounts and at management
rolling weekly cash meetings.
forecasting and took Procedures and monitoring
measures to secure controls are in place
additional debt and to ensure timely reporting
equity financing in to involved brokers
2020. In February and lenders regarding
2021 the Group received compliance obligations.
EUR28.8m, net of original
issue discount, on
a EUR30m term loan
facility. Nevertheless,
the extent of the
effects of the COVID-19
pandemic on our business,
results of operations,
cash flows and growth
prospects are uncertain.
Our term loan facility
creates repayment
obligations and covenants,
reporting to the involved
brokers and lenders
and requires constant
monitoring of the
Group's leverage position
and liquidity metrics.
Without a return to
growth it is not certain
that the Group can
meet the covenants
set out under the
term loan facility
agreement.
--------------- ------------------------------------------------------------ ------------------------------------------------------------ ----------
3 Data Security We are an innovative The Group takes the Increased
technology company protection of our
dependent on sophisticated customer and employee
software applications personal data very
and computing infrastructure. seriously and has
The security of the a series of controls
confidential business and monitoring in
information we generate place to ensure compliance.
when engaging in e-commerce We continue to maintain,
and the personal data policies and a governance
we capture from customers information security
and employees is essential framework to comply
to maintaining consumer with laws that apply
and travel service to our business, meet
provider confidence evolving stakeholder
in our services. As expectations, and
an online platform, support business innovation
we are constantly and growth.
exposed to cyber security-related We have a robust and
threats in the form comprehensive data
of internal and external privacy, security
attacks or disruption and protection compliance
on our systems or programme in place
those of our third-party which includes a supplier
suppliers. onboarding process
The shift to remote involving our information
working during COVID-19 security and data
changed the risk profile protection compliance
of data security and teams.
gives rise to ongoing Our information security
data security challenges controls are aligned
and a widening threat to leading industry
landscape. In particular, standards, ISO27001:2017
cyberattacks (including and NIST Cyber Security
ransomware) on organisations Frameworks. We are
have increased significantly PCI compliant with
during the COVID-19 the guidelines of
pandemic. the payment card industry.
As the Group reopens We work closely with
offices, the COVID-19 internal audit functions,
Return to Work Protocol and external consultants
(Ireland) and Working where relevant, to
Safely During Coronavirus ensure that our system
Guidelines (UK) require architectures, work
us to capture from processes and policies
colleagues and office are in place to provide
visitors, new categories as much protection
of sensitive personal as possible.
health data that we We have a data protection
would not have obtained compliance framework
before. The General in place that is aligned
Data Protection Regulation to our on-going obligations
("GDPR") places significant under the GDPR, ePrivacy
data security and Directive and other
regulatory compliance applicable laws. We
obligations on us have invested and
when processing such continue to invest
data. in our own data protection
In 2021, we migrated compliance resources
parts of our e-commerce to monitor and ensure
platform to the Cloud. compliance including
Whilst risk is minimal, a bespoke data privacy
there still is risk management software
that security gaps tool. Our Data Protection
may manifest during Officer ("DPO") is
the migration. responsible for informing,
Our IT platforms must advising and monitoring
be scalable, robust compliance on all
and reliable. If our matters relating to
systems can't keep the protection of
up with growing demand, personal data in the
this could affect Group. Our DPO is
our ability to deliver supported by designated
growth. data protection champions
through our core business
units including information
security, HR, customer
services, marketing
and product. We regularly
review our employee
information security
policy and we continue
to invest in information
security training
for all staff so that
they remain vigilant
and alert to the possibility
of cybercrime.
We reviewed the impact
on servers of increased
remote access loads
with teams working
from home. We issued
guidance to all colleagues
during COVID-19 regarding
the personal data
and data security
implications of the
pandemic and new remote
working along with
enhanced procedures
for accessing company
data while working
remotely.
We have engaged with
an expert solution
provider in the architecture
and provisioning of
cloud services, as
well as a certified
security company for
independent vulnerability
and security scanning.
We provide data security
training for all staff.
We perform due diligence
of our third-party
suppliers who process
our personal data
including heightened
information security
due diligence.
--------------- ------------------------------------------------------------ ------------------------------------------------------------ ----------
4 Cyber The Group like other The Group expend significant Increased
companies is susceptible resources to protect
to cyberattacks which against cybersecurity
could compromise the breaches, and regularly
integrity of our systems increase our security-related
and the security of expenditures to maintain
our data. Cyberattacks or increase our systems'
by individuals, groups security.
of hackers and state-sponsored
organisations are The Group have an
increasing in frequency arrangement in place
and sophistication with a specialist
and are constantly third party firm to
evolving. The Group monitor network activity
expects these issues and to detect, neutralise
to become more difficult and report any unusual
to manage as the tools activity to corporate
and techniques used IT.
in such attacks become
ever more sophisticated. IT policies, procedures
There is a risk that and cyber security
the Group's current initiatives are reviewed
technical, administrative and updated regularly
and physical IT security to address the changing
framework may not regulatory environment,
be successful in safeguarding including data privacy
our information assets regulations and to
against cybersecurity mitigate the evolving
attacks, past, present cyber security threat.
and in the future,
which may result in Dedicated IT personnel
bad actors stealing with appropriate expertise
customer information and qualifications
or transaction data in information security
or other Group proprietary are employed by the
information. Group.
There is a risk that
the Group's insurance
policies will have
coverage limits and
may not be adequate
to reimburse us for
all losses caused
by a cybersecurity
breach.
--------------- ------------------------------------------------------------ ------------------------------------------------------------ ----------
5 Competition The risks posed by Our primary mitigation Increased
competition could is the execution of
adversely impact our our strategy and to
market share and future capitalise on our
growth of the business. unique market position.
While we face a number This involves:
of key risks under * Targeting new customer acquisition and growing the
competition, in each most profitable customer cohorts (with focus on
the competitor we Customer Lifetime Value / Customer Acquisition Cost)
reference is likely by optimising overall marketing investment;
to have more resources
than we do to enable
them to compete more * Strengthening the Group's core platform in order to
effectively. Key areas improve its flexibility and the experience of our
are as follows: customers;
* Supply: competition from direct competitors,
alternative accommodation operators and disruptive
new entrants leading to a loss of key accommodation * Upgrading our third-party platform connectivity in
suppliers. order to defend our competitive position;
* Customers: changes in customer behaviour leading to a * Focus on expanding our global footprint, meeting
loss in customer traffic and demand for our services emerging demand while also strengthening our overall
and / or increase in customer acquisition costs. product offering;
Consumer preferences could change as a result of the
COVID-19 pandemic which may be disadvantageous to our
business and may benefit existing and new * Leveraging the capabilities of our partnerships to
competitors. With global travel restrictions, there ensure we are delivering best in class and most
may be a shift towards domestic travel and advanced tech-based solutions for our customers and
alternative accommodations. hostel partners;
* There has been a rise in cancellations and vouchers * Evaluating strategic opportunities to diversify away
issued in lieu of cash refunds for the Group and with from exclusive dependence on OTA business and develop
our competitors. This increases competition for the a broader experiential based travel offering to our
Group as it locks customers into those companies customers; and
issuing the vouchers, thereby potentially reducing
the demand for the Group's offering.
* Roll out commercial agreements to secure competitive
rates and inventory across our property base.
--------------- ------------------------------------------------------------ ------------------------------------------------------------ ----------
6 People The Group is dependent The Group is taking Increased
on ability to attract, meaningful action
retain and develop to retain employees
creative, committed and has implemented
and skilled employees HR policies and people
so as to achieve its processes to enable
strategic objectives. retention of key talent;
Due to the impact namely the introduction
of the COVID-19 pandemic, of an agile working
the Group took actions policy, a working
to reduce headcount from abroad policy
in 2020. The Group and paid wellness
also undertook several and parental leave
organisational change days to promote flexibility
programmes in the and work-life blending.
last 12 months to
ensure the organisation In Q4 2021, the Group
is designed to optimally also brought contractual
deliver our strategic annual leave entitlements
priorities. In addition, in line with market
the 2021 global increase to remain competitive
in attrition because and to drive engagement
of COVID-19 has the among the team.
potential to further As the Group re-open
disrupt the business offices, the lease
. on the Dublin premises
All of this presents in Leopardstown has
several significant been relinquished,
risks, including increased in favour of a WeWork
attrition and difficulty co-working space in
retaining valuable the city centre.
key employees, weakening
of our employer brand A blended approach
and ability to attract to remote/office working
high calibre talent, has been established
potential negative across all locations
impact on employee to allow for further
morale, productivity flexibility on an
and overall engagement, ongoing basis for
an adverse impact employees - teams
on our culture, and can decide what approach
resource constraints; works best for them.
any of which could
adversely impact our The Group has further
business and reputation. increased focus on
We have a key dependency understanding the
on attracting and drivers of employee
retaining technical engagement, through
employees in development, regular engagement
quality assurance, surveys and are committed
product management to taking action to
and engineering to improve employee engagement
facilitate delivery levels. We have recognised
of projects and maintain that an increased
site and infrastructure investment in career
stability. Due to development and training
increased packages of our people is key
in the technology to employee engagement
sector, there is a and in 2022 we will
risk that attrition be recruiting a dedicated
will continue to rise learning and development
unless we continue specialist within
to keep pace with our HR team.
the market and ensure
our total reward offering Robust external benchmarking
for new and existing has ensured there
hires is on-par with is better understanding
the industry standard. of the competitiveness
of the reward offering.
Employees identified
as key talent/critical
skills were awarded
various retention
plans in a bid to
retain key talent.
In H2 2021, the Group
brought forward their
planned 2022 compensation
review in response
to attrition rates
and external market
factors.
The Group currently
operates from five
global offices, which
provides flexibility
for location of key
talent, thereby opening
up a larger talent
pool to select from.
Our location and resourcing
strategy remains under
review on an ongoing
basis to optimize
the talent pool. A
non-executive director
fulfils a workforce
engagement role as
set out in the 2018
UK Corporate Governance
Code.
--------------- ------------------------------------------------------------ ------------------------------------------------------------ ----------
7 Search A large proportion The Group invests Unchanged
Engine of traffic to our heavily in recruiting
Algorithms websites is generated and retaining key
through internet search personnel with the
engines such as Google, requisite skills and
from non-paid (organic) capabilities in paid
searches and through and non-paid search.
the purchase of travel This in-house expertise
related keywords (paid is supplemented by
search). the deployment of
We therefore rely leading technology
significantly on practices tools. The search
such as Search Engine marketing team works
Optimisation ("SEO") closely with Google
and Search Engine to understand any
Marketing ("SEM") changes in functionality
to improve our visibility to the AdWords platform
in relevant search so that we can avail
results. Search engines, of any efficiencies
including Google, in our search traffic.
frequently update The Group participates
and change the logic in alpha and beta
that determines the feature tests that
placement and display give Hostelworld first
of results of a user's mover advantage with
search, which can new functionality
negatively impact that can help drive
placement of our paid efficiency.
and organic results We continue to enhance
in search results. our skillsets in house
Google algorithms and capabilities by
have become very sophisticated partnering with third
and able to determine party vendors to enhance
better quality driven our search engine
by machine learning optimisation.
capabilities. We risk
being significantly
behind in our marketing
strategy and unable
to be competitive
in the current environment.
Furthermore, in respect
of paid search, our
costs to improve or
maintain our placement
in search results
can increase. This
could result in a
decrease in bookings
and thus revenue and
an increase in costs.
It could also result
in having to replace
free traffic with
paid traffic, which
would negatively impact
margins.
Continued investment
is needed to remain
competitive.
--------------- ------------------------------------------------------------ ------------------------------------------------------------ ----------
8 Third Party Supply: We rely on Increased
Reliance hostel accommodation Supply: We work closely
providers to provide with partners and
us with our inventory. hostel associations
Any limitations put to monitor developments
in place by accommodation in the market. Our
providers limit the current focus is on
inventory that we measures taken by
sell. The COVID-19 hostels for managing
pandemic and its resulting social distancing
impact on travel demand, and ensuring appropriate
the travel industry hygiene measures are
and the economy, has in place. We continue
increased the risk to communicate actions
of insolvency or disruption we are taking to support
to the ability of any changes properties
our travel service may be forced to make.
provider partners For our systems and
to provide services. service providers
With our hostel partners we focussed on maintaining
in particular, there good relationships
is increased risk with vendors and ensuring
of properties going contractual obligations
out of business, no dictate minimum functionality
longer operating in and speedy resolution
the hostel category, of issues. We put
or removing significant alerts in place to
hostel elements from immediately capture
their properties. any downtime and replicate
Systems and service as much functionality
providers: We rely as possible in-house.
on a number of key We worked to ensure
third-party providers. there are tight service
Any interruption in level agreements in
service from any of place and there is
these providers may oversight of product
lead to a loss in roadmaps.
revenue, loss in site COVID-19 has highlighted
and app functionality, that sudden changes
increased input from in workload can have
customer services a negative impact
and engineer time on platform availability
and ultimately if with third party suppliers
we experience multiple but also that quick
failures we risk reputational intervention can be
and brand damage. taken to mitigate
COVID-19 has increased any issues.
the risk of supplier The Group has made
failures, a risk that preparations in the
would be exacerbated event hostel partners
if there are further and/or key service
global travel restrictions providers fail. The
in response to new Group closely monitors
waves (such as the the financial health
Delta and Omicron of key suppliers and
variants in 2021). taking steps to mitigate
The Group relies on risks.
payment processors
and payment card schemes
to execute certain
components of the
payments process.
We generally pay these
third parties interchange
fees and other processing
and gateway fees to
help facilitate payments
from customers to
our travel service
provider partners.
There is a risk that
the Group may not
maintain its relationships
with these third parties
on favourable terms
or that these transaction
fees imposed by these
providers are increased.
--------------- ------------------------------------------------------------ ------------------------------------------------------------ ----------
9 IT Platforms Over recent years We focus on staying Increased
and the ever-increasing current with new trends
technological pace of change of in technology development
innovation new technology, new and customer behaviour.
infrastructure and We invest a significant
new software offerings amount of our product
have changed how customer's and user experience
research, purchase functions on research
and experience travel. and development and
Notable shift changes interacting with similar
include mobile networks, companies both within
mobile applications, and external to travel.
meta-search providers, The Group has continued
display advertising with the ongoing modernisation
and social communities. of our underlying
Unless we continue platform to enable
to stay abreast of us to support faster
technology innovation execution across our
and change, we risk core platform.
becoming irrelevant We also leverage the
to the modern customer. capabilities of partnerships
Technology evolves to ensure we are delivering
rapidly, and updates best in class and
can become quickly most advanced tech-based
obsolete. solutions for our
customers and hostel
partners.
--------------- ------------------------------------------------------------ ------------------------------------------------------------ ----------
10 Climate Climate change and Climate change issues Increased
Change, sustainability continue may impact travel
Sustainability to be areas of increased decisions and travel
and Corporate focus for the Group patterns by customers
Social and are further evolving but is mitigated to
Responsibility as areas of heightened the extent that our
concern with consumers business is a global
and stakeholders. one, with a dispersed
Physical climate change population of users,
risks such as extreme and a geographically
weather events could dispersed set of destinations.
affect our inventory As an ecommerce business
competitiveness and based in five office
results of operations. locations around the
In addition, transitional world and under 300
climate change risks employees, whilst
such as changes in our carbon footprint
stakeholder expectations, is relatively small,
travel patterns, technologies, we recognise that
policy and regulation the Group has a role
may affect the Group to play in protecting
and results of operations. our environment. For
There is a request this reason, we have
for more accountability continued to make
from our customers, a concerted effort
employees, other stakeholders to offset our carbon
as to what the Group footprint through
is doing to limit various initiatives
its direct and indirect across our business,
impact on climate including
change. There is a (i) reducing our reliance
risk that we do not on printing by promoting
meet shareholder expectations a paperless office
regarding our target environment;
setting and performance (ii) encouraging third
against creating a parties to do everything
more sustainable operating electronically, including
environment. invoicing and contracting
Customers demand and (using DocuSign);
expect the humane (iii) putting provisions
treatment of animals in place to promote
and the respect for recycling across all
animal welfare. As our office locations;
an industry leader, (iv) focusing on energy
we have a responsibility and natural resource
to take the lead on conservation e.g.,
ensuring that when our offices have stop
we empower our customers taps for water consumption
to Meet The World and controlled lighting
(R) , that this experience and air conditioning;
is done with respect, (v) encouraging employees
humility and awareness to use more sustainable
for the world's people, modes of public transport
animals, communities (including the LUAS
and the environment. and the Cycle2Work
We are opposed to Scheme);
any experience that (vi) becoming a signatory
promotes and involves in 2020 of the Global
intentional direct Tourism Plastics Initiative
contact with wild led by the UN Environment
animals in their natural programme and the
habitat, including, World Tourism Organisation;
petting, feeding, and
riding animals or (vii) Joining the
similar practices. Global Sustainable
We take our lead on Tourism Council ('GSTC')
animal welfare from whom we will partner
the Five Freedoms and collaborate with
of Animal Welfare to drive sustainable
and are committed travel initiatives
to ensuring that all across the travel
our accommodation industry
and experience partners Our goal is to encourage
work to ensure the our hostel partners
highest quality of to sign up with the
life for any animals aim of reducing their
involved. single use plastics
consumption. We have
also taken steps to
reduce our plastic
consumption as a Group.
Prior to COVID-19,
we made efforts to
reduce our plastic
consumption through
initiatives such as
purchasing reusable
water bottles for
the office, ordering
fresh fruit and other
perishables from suppliers
who use fully recyclable
packaging.
Our contracts with
accommodation and
experience partners
contain contractual
commitments (developed
by reference to the
Five Freedoms of Animal
Welfare) on the part
of properties and
experience providers
to comply with all
applicable animal
welfare laws and ensure
that no animals shall
be harmed as a result
of any experiences,
activities or events
promoted, managed,
arranged or organised
by them. Any properties
or experiences that
are found to be in
violation of these
requirements or that
otherwise directly
or indirectly threaten
the welfare and/or
conservation of animals
will be removed from
our platform.
Well before COVID-19
we were already using
video conferencing
platform technology
to help reduce the
impact of working
across our various
office locations.
When the world went
into lockdown following
the outbreak of the
pandemic, we invested
further in our technologies
to enable our employees
to continue communicating
with each other and
keep our business
in operation during
lock-down.
--------------- ------------------------------------------------------------ ------------------------------------------------------------ ----------
11 Regulation Regulatory and legal The Group has an internal Increased
requirements and uncertainties legal team and external
around these could legal advisors to
subject the Group advise the Group on
to business constraints, current and anticipated
increased regulatory legal requirements.
and compliance costs Our legal advisors
and complexities or monitor and advise
otherwise harm our on regulatory matters
business. in locations in which
Our business is global we provide services
and highly regulated with a particular
and is exposed to focus on those areas
issues regarding competition, where we have local
licensing of local operations.
accommodation and Suitable experienced
experiences, language resources have been
usage, web-based trading, engaged to ensure
consumer compliance, consumer compliance
tax, intellectual requirements, compliance
property, trademarks, with the Listing Rules,
data protection and the Financial Reporting
information security Council Corporate
and commercial disputes Governance Code and
in multiple jurisdictions. the Market Abuse Regulations.
COVID-19 has led to A detailed analysis
increased focus by of the Group's approach
consumer rights regulators to offering vouchers
on the online sales to certain customers
practices of tourism concluded that the
and travel focused Group's approach was
companies and may aligned with the principles
have an impact on reflected in the EU
the Group's brand Commission recommendations
if the Group's sales on vouchers for cancelled
practices were investigated package travel and
and assessed to be transport services
non-compliant. published on 13 May
COVID-19 has heightened 2020.
our obligations under In line with guidance
employment and health from the Irish and
and safety laws to UK governments, we
protect the safety, have developed a robust
health and welfare COVID-19 Response
of colleagues in the Plan including adopting
workplace. protocols around returning
The GDPR imposes particular colleagues back to
compliance obligations the office environment.
with respect to our We have rolled out
COVID-19 response an effective refund
measures with risk management and risk
of fines and other policy and procedure
enforcement mechanisms to deal with individual
being imposed by a consumer complaints
data protection authority. and those from consumer
Our position on customer regulators. Our response
refunds may give rise to requests and complaints
to customer complaints is informed by a cross-departmental
to consumer regulators risk assessment.
such as the Irish The Group have been
Competition and Consumer working with the Central
Protection Commission Bank of Ireland to
or UK Competition ensure the Group is
and Markets Authority complaint with the
who have a range of PSD2 EU Directive.
enforcement powers We have appointed
including fines. external insurance
Payment Services Directive brokers to help us
Two ("PSD2") is an ensure we have the
EU Directive that appropriate Group
applies to payment insurance in place
services in the EU. on the best possible
The deadline for the terms.
Group to incorporate We have expanded our
and be compliant with ability to offer customers
this Directive was their preferred method
31 December 2020. of payment in the
PSD2 further regulates most efficient manner
the authentication on all our platforms.
process for accepting We process more of
credit cards and which our transactions on
we expect to result a merchant basis where
in increased compliance we facilitate payments
costs and complexities, through the use of
including those associated credit cards and other
with the implementation alternative payment
of new or advanced methods (such as PayPal,
internal controls. Alipay, ApplePay and
The Group is also Google Pay).
subject to payment
card association rules
and obligations under
our contracts with
the card schemes and
our payment card processors,
including the Payment
Card Industry Data
Security Standard
("PCI DSS").
The EU Package Travel
Directive (the "PTD")
sets out broad requirements
such as local registration,
certain mandatory
financial guarantees,
disclosure requirements
and other rules regulating
the provision of travel
packages and linked
travel arrangements.
The PTD also creates
additional liability
for a provider of
travel packages for
performance of the
travel services within
a packaged trip under
certain circumstances.
Conditions in the
insurance market are
difficult at present
and, in line with
general market trends,
we have seen an increase
in insurance costs.
Changes to the rules
regarding the use
of "cookies" on our
website and mobile
applications have
the potential to impact
on our ability to
serve our customers.
Cookies are small
text files that are
stored on a user's
computer or mobile
device that are used
to store or gather
information (e.g.,
remember log-on details
so a user does not
have to re-enter them
when revisiting a
website or opening
an app) and market
to customers. Cookies
are valuable tools
for the Group that
we use to enhance
our customers' experiences
and increase conversion.
The GDPR and ePrivacy
Directive require
"opt-in" consent before
certain cookies can
be placed on a user's
computer or mobile
device.
The Group is also
subject to new sign-up
regulations. Our Global
Markets Team ("GMT")
currently maintain
a list of cities that
require a hostel licence
to be provided before
we add a property
to our site. The city
list can change depending
on the local in country
regulations. Any addition
of new licence or
regulatory material
that needs to be collated
upon sign up, will
slow down the operations
of GMT and could impact
the number of properties
added to the site
each year. If there
is a reclassification
of what is a 'hostel'
in any locality, this
could impact how we
choose to display
property categorisations
on our site. Also,
even if a licence
is collated upon sign
up, the laws within
each city can change,
resulting in a closure
of properties and
removal of beds from
Hostelworld.
--------------- ------------------------------------------------------------ ------------------------------------------------------------ ----------
12 Brand and Hostelworld is the We are focused on Increased
Reputation world's leading OTA investing in our core
focused on the hostel products, platform
market. We rely on and technological
the strength of our capabilities to support
brand in the market our brand proposition
to attract customers and awareness as well
to our platform and as actively managing
to secure bookings. our brand portfolio
Consumer trust and through social media
confidence in our channels. We have
brand is therefore internal and external
essential to ongoing PR advisors to support
revenue stability us to manage any PR
and growth. Brand incidents. Our customer
marketing spend was service team strive
a cost line impacted to ensure that customers
by COVID-19 cost cutting have a positive experience
measures. As travel at all stages of interacting
restrictions lift with us. The Group
we must be competitive has a Crisis Management
with our marketing Policy in place which
spend and focus on includes appropriate
brand recognition escalation.
with consumers as In relation to COVID-19,
a key priority. we took the decision
As COVID-19 continues to offer refunds and
to evolve into different credits for cancellations
strains, there is due to COVID-19. During
a risk of further 2020 we rolled out
global lockdowns which an effective refund
could lead to a rise management and risk
in customer cancellations. policy and procedure
COVID-19 and the uncertainty to deal with individual
around the ability consumer complaints
of our customers to and those from consumer
travel and operational regulators. Our response
issues connected with to requests and complaints
the restart of global is informed by a cross-departmental
travel (including risk assessment. We
flight cancellations have continued this
and hostel closures) approach into 2021.
could lead to us being
overwhelmed with customer
service queries and
complaints.
--------------- ------------------------------------------------------------ ------------------------------------------------------------ ----------
13 Business Failure in our IT As an e-commerce organisation, Increased
Continuity systems or those on the Group's business
which we rely such continuity plan ("BCP")
as third party hosted focusses on the continued
services could disrupt operation of consumer
availability of our facing products and
booking engines and related services to
payments platforms, ensure our e-commerce
or availability of trading systems can
administrative services continue to process
at our office locations. bookings. The Group
has worked with external
advisors to produce
robust documented
business continuity
and disaster recovery
capabilities.
The ongoing modernisation
programme of both
Corporate IT and the
website to cloud based
services increases
resilience to business
interruption.
We updated our standard
supplier terms to
provide more robust
and comprehensive
contractual provisions
regarding force majeure
(covering epidemics/
pandemics) and BCP
(requiring suppliers
to implement the provisions
of our BCP at any
time).
The Group's BCP and
disaster recovery
plan was successfully
implemented to support
the business in its
response to COVID-19.
Both this plan and
the supporting backup
and failover facilities
are regularly reviewed
to ensure their continued
validity.
--------------- ------------------------------------------------------------ ------------------------------------------------------------ ----------
14 Taxation Due to the global In collaboration with Increased
nature of our business, our tax advisors,
tax authorities in a large professional
other jurisdictions services firm, we
may consider that assess possible tax
certain taxes are impacts in the jurisdictions
due in their jurisdiction. in which we operate
Such a scenario may to ensure our tax
arise for example obligations are aligned
because the customer to the operational
is resident in that nature of our business.
jurisdiction or the Our tax risk is managed
travel service is by the employment
deemed to be supplied of suitably qualified
in that jurisdiction. personnel and close
In other situations, engagement with big
a charge to tax may four tax advisors.
arise where the tax We receive briefings
authorities consider to Board by our tax
an establishment to advisors, where required,
exist in that country on tax risks and any
by virtue of some changes in tax legislation
activity being carried which impacts on current
on there. If those tax structure of the
tax authorities take Group.
a different view than
the Group as to the
basis on which the
Group is subject to
tax, it could result
in the Group having
to account for tax
that it currently
does not collect or
pay, which could have
a material adverse
effect on the Group's
financial condition
and results of operation
if it could not reclaim
taxes already accounted
for in the jurisdictions
the Group considers
relevant. Furthermore,
the ever-changing
tax landscape (i.e.
changes to tax legislation
or the interpretation
of tax legislation
or changes to tax
laws based on recommendations
made by the OECD in
relation to its Action
Plan on Base Erosion
and Profits Shifting
2.0 ("BEPS") or national
governments) may result
in additional material
tax being suffered
by the Group.
Certain countries
have taken steps to
introduce a digital
services tax to address
the issue of multinational
businesses carrying
on business in their
jurisdiction without
a physical presence
and therefore generally
not subject to income
tax in those jurisdictions.
These digital services
taxes are calculated
as a percentage of
revenue rather than
income or profits.
We are currently monitoring
the introduction of
the digital services
taxes, and its impact
on our Group as trade
and revenue (on which
the tax is levied)
continues to pick
up.
--------------- ------------------------------------------------------------ ------------------------------------------------------------ ----------
15 Impact The continued threat Our target 18-34-year-old Unchanged
of terrorism of terrorist attacks population tend to
threat in key cities and be both flexible as
on leisure on aircraft in flight to destination and
travel may reduce the appetite are less risk adverse.
of the leisure traveller
to undertake trips
particularly to certain
geographies, resulting
in declining revenues.
Increased incidence
of terrorism impacts
consumer confidence
and can shift demand
away from certain
destinations.
--------------- ------------------------------------------------------------ ------------------------------------------------------------ ----------
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April 06, 2022 07:58 ET (11:58 GMT)
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