Hostelworld - Increased restrictions elicit marked impact on bookings

Davy Research
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Increased travel restrictions and infection rates have significantly impacted Hostelworld’s volumes since the end of August. The result is a more cautious outlook for late-2020, which will likely weaken the run-rate into 2021. The light at the end of the COVID-19 tunnel is a lean operation with proven cash-generative capability and an enhanced platform to drive growth. This may feel distant, but conditions have proven volatile in both directions and Hostelworld is trading on <5x pro-forma 2019 earnings.