Premium hostel group Safestay have significantly shrunk their pre-tax loss as they undergo a gradual post-pandemic recovery supported by investment in new sites and demand from younger travellers.
The AIM-listed company reported revenue of £10.7m in the six months ended 30 June 2024, up by 6.6 per cent from £10m in 2023.
It reported earnings before interest, tax, depreciation and amortization of £3.2m, up by 23.1 per cent from the first half of 2023 due to “strong operational leverage, increased mix of sales through direct channels, and tight cost control”.
The company’s loss before tax shrunk to £113,000, from £947,000 in 2023.
Safestay said that overall market growth continued to be driven by “increasing consumer trends towards great value travel accommodation”, as well as the rise in international travel by millennial and gen z customers.
Its share price rose by nearly nine per cent in early trades.
The group, which owns six boutique sites in the UK, had an occupancy rate of 20.6 per cent, a 1.8 per cent increase year on year and close to pre-pandemic levels, it said.
Safestay said it had seen increased a “gradual recovery” in group bookings, which represented nearly a quarter of accommodation sales during the period.
Chairman Larry Lipman said: “2024 so far has been a period of significant strategic progress for Safestay as we have continued to strengthen our position as one of Europe’s leading hostel operators.
“In addition to remaining focused on delivering organic growth through our operational initiatives, we will continue to actively evaluate new opportunities where well located, attractive sites become available.
He added: “We are excited by the significant long-term growth opportunities available to us as an established international operator in the highly fragmented and significant global hostel market.”
Safestay added four new sites to its portfolio during the period, taking its total to 20 sites.
It also reported a successful refinancing with HSBC in January 2024, which saw debt refinanced into a single £16m five-year term loan with the addition of a new £2.5m Revolving credit facility.