- Hostelworld Group
- 13 April 2026 13:52:44
Source: Sharecast
Berenberg said Hostelworld has transformed its business model, from an online travel agent focused on hostels to a global social travel platform - with the transition accelerating over the last two years and the bank expecting to see the benefits of this to support an improvement in revenue and profit growth in FY26.
The German bank said Hostelworld's ransition to a social platform was increasing the competitive moat around the business as network effects and growth in proprietary data support "a positive flywheel effect", driving an uplift in active customers and booking frequency.
"Furthermore, we understand the trend of consumers trading down to lower-cost destinations in recent years – which resulted in a drop in average book value – has tapered off, and its business in Europe has now returned to growth," said the analysts.
However, Berenberg stated that despite "these supportive factors", Hostelworld trades on a full year 2026 price-to-earnings ratio of just 8x, offering "a highly attractive entry point".
"Trading on 8x FY26E P/E, we do not think that the valuation reflects the improving trading environment and Hostelworld's transformed business model, which has significantly enhanced its growth and margin prospects," concluded Berenberg.
Reporting by Iain Gilbert at Sharecast.com