Safestay’s (LON :SSTY) Share price fell -1.47% as investors took the view that it had been better to travel than arrive in the hostel operator.
Safestay, one of Europe’s leading hostel operators, produced a robust trading upadate today despite difficult market conditions in the 12-months to 31/12/2024.
The company reported record sales of £23.0 million, that’s a +2.0% increase over the prior year, while adjusted EBITDA came in at £6.50 million.
Having successfully refinanced its debt in January 2024 via HSBC, it now has just one loan of £16.0 million over a 5-year term and a £2.50 million revolving credit facility.
This has allowed Safestay to grow its portfolio to 20 sites, spread across Europe, and it has added properties in the Costa Blanca, Cordoba, Brighton, and Budapest.
This expansion, combined with the successful opening of a new Edinburgh location, are part of a significant growth plan. At the same time Safestay has sold a loss-making hotel in Vienna Austria.
Looking at some of the numbers in the update:
Total bed nights, a measure of utilisation, increased by +10.0% to 931,688. While overall occupancy rates rose to 75.2%, up from +71.4% in 2023.
The company is trying to reduce commission costs, and direct bookings now account for +37.0% of the firm’s total bookings. That’s up from just 32.0% in the previous year.
Despite industry-wide price pressures, which have meant average bed spend at the firm’s properties declined by -10.0% to £21.40, Safestay has managed to maintain its Total Revenue per Available Bed at £18.56.
That’s thanks to additional revenue from things like increased food and beverage sales, which grew by an impressive +26.0% over the period.
Looking ahead, forward bookings have increased +27.0% to £4.7 million. The recent partnership with Cloudbeds, which equips Safestay with AI pricing software, should also help with revenue and yield optimization.
Safestay has ambitious plans to double its portfolio size in the medium term, using a variety of strategies that include acquisitions and franchising.
And this might be good timing, as ongoing inflation, and prices rises, are making younger travellers and backpackers ever more cost conscious.
With over 35 years of finance experience, Darren is a highly respected and knowledgeable industry expert. With an extensive career covering trading, sales, analytics and research, he has a vast knowledge covering every aspect of the financial markets.
During his career, Darren has acted for and advised major hedge funds and investment banks such as GLG, Thames River, Ruby Capital and CQS, Dresdner Kleinwort and HSBC.
In addition to the financial analysis and commentary he provides as an editor at GoodMoneyGuide.com, his work has been featured in publications including Fool.co.uk.
As well as extensive experience of writing financial commentary, he previously worked as a Market Research & Client Relationships Manager at Admiral Markets UK Ltd, before providing expert insights as a market analyst at Pepperstone.
Darren is an expert in areas like currency, CFDs, equities and derivatives and has authored over 260 guides on GoodMoneyGuide.com.
He has an aptitude for explaining trading concepts in a way that newcomers can understand, such as this guide to day trading Forex at Pepperstone.com
Darren has done interviews and analysis for companies like Queso, including an interview on technical trading levels.
A well known authority in the industry, he has provided interviews on Bloomberg (UK), CNBC (UK) Reuters (UK), Tiptv (UK), BNN (Canada) and Asharq Bloomberg Arabia.
You can contact Darren at darrensinden@goodmoneyguide.com
