Support Skift’s Independent JournalismMake a Contribution Now
Hostelworld Group, which states it offers a lower-priced distributed channel than online travel agencies for hostels and other budget accommodations, priced its IPO in the UK and Ireland, valuing the company at $270.3 million.
There haven’t been big travel IPOs so far in 2015 as Hostelworld prices some 71.7 million shares at 185 pence per share, and Indigo airline’s parent, InterGlobe Aviation, goes public in India at a $4 billion valuation.
Although it is very much apples to oranges, the HostelWorld IPO might be viewed as a toe in the water for companies such as Airbnb and other alternative lodging/sharing-economy companies mulling their futures as public companies.
Founded in 1999, HostelWorld Group sees itself as a distribution channel for budget lodging properties, generally offering them distribution at 12 percent commission on sites and apps such as Hostelworld, Hostelbookers and Hostels.com.
As of August 31, Hostelworld Group offered more than 12,600 hostels and some 21,000 other budget accommodations in more than 170 countries.
The goal of the IPO, with projected net proceeds of around $191.7 million, is to increase marketing through digital and social channels, as well as brand partnerships, to deepen the company’s investment in “mobile-first” technology, and to expand geographically.
In the first six months of 2015, Hostelworld Group notched $15.3 million in adjusted EBITDA (earnings before interest, tax, depreciation and amortization) on $67.1 million in revenue.