2025 Chair's Statement

Operating Environment and Strategic Context

Travel markets remained dynamic in 2025, with shifting customer expectations, rapid digital evolution, and heightened demand for personalised and community led experiences. Against this backdrop, Hostelworld continued to execute its strategy with purpose and clarity.

As the Group emerged from COVID-19 and the industry experienced a rapid return to normal trading, Hostelworld created an entirely new travel category: social travel. This proposition is centred on helping travellers find people to hang out with and finding unique experiences in their chosen destination, creating a differentiated and defensible position in a market where connection, experiences and community increasingly shape decision making. Throughout 2025, this strategy continued to prove its relevance and long term growth potential.

At our Capital Markets Day market, management set out a clear roadmap to scale our social strategy and accelerate growth by strengthening our platform, expanding our addressable market, and broadening how travellers can connect before and during their trips. Hostelworld’s position at the convergence of travel and shared experiences gives the Company a distinct role, particularly for younger and solo travellers seeking connection and community while travelling. During the year, the Company made strong progress against the milestones set out in April, with performance in 2025 reinforcing the Board’s confidence in the strategic direction of the business.

Strategic Progress

Strengthening Our Platform

During the year, we continued to strengthen the product experience, prioritising earlier and more meaningful engagement with customers. Our ongoing investment in the higher margin Hostelworld app is underpinned by new features that allow travellers to connect before, during and after their trips by using and sharing the Group’s Travel Plans product, which launched in March 2025, and delivering personalised, AI driven recommendations to customers on people to meet and communities to join.

AI will clearly play a significant role in reshaping travel discovery and planning, and the Board believes Hostelworld is well-positioned to benefit from this evolution. Given the age profile of our core customers (18-34 years), who are at the forefront of AI adoption in everyday life, we will continue to invest in responsible AI capabilities that enhance personalisation while reinforcing the fundamental value of human connection.

Expanding Our Market Reach

Two major product launches broadened our market access:

Social Passes, launched in November 2025, provides time-bound paid access to our community and social features to travellers who may not have booked accommodation through Hostelworld.

Third Party Inventory (3PI), launched initially across 50 destinations in December 2025, provides customers with access to a wider accommodation offering, enabling us to serve customers wherever they choose to travel, most importantly in those destinations where there are few, if any, operating hostels.

Integrating OccasionGenius Inc.

The acquisition of OccasionGenius Inc., a US based event discovery platform, will significantly enhance our social travel ecosystem by integrating real time event discovery into the Hostelworld experience. This product will enrich the social experience by enabling travellers to discover activities and travel-worthy events that deepen engagement and foster connection beyond accommodation. This initiative complements our social strategy and strengthens our differentiated position in the travel market.

These initiatives and continued product innovation represent important building blocks for the Company’s next phase of growth. Our strategy is firmly focused on enabling a global community of travellers to connect, supporting sustainable growth and long term value creation for shareholders, as we continue to pursue our ambition of becoming the world’s leading social travel platform.

Our People

Our people are at the heart of everything we do, and attracting and retaining highly talented staff is essential to achieving the Company’s goals. In 2025, we achieved our highest ever employee engagement scores, reflecting a motivated and committed team. We were also proud to be awarded the ‘Investors in Diversity Gold’ accreditation, placing the Company among just 34 organisations in Ireland and making it the first within the travel sector to achieve this recognition. This external recognition confirms that our people strategy is aligned with best practice and reflects strong performance across governance, inclusive leadership, workforce representation and employee engagement.

Capital Structure and Shareholder Returns

We remain focused on delivering growth and long term sustainable value for shareholders, underpinned by a strong balance sheet and disciplined capital allocation. In 2025, we maintained a careful approach to capital allocation, balancing reinvestment in the business with returns to shareholders.

During the year, we introduced a dividend and commenced a £5 million share buyback programme, reflecting confidence in our strategy, operational performance and growth outlook. These returns were balanced with continued reinvestment in technology, product development, and strategic initiatives such as the OccasionGenius Inc. acquisition. OccasionGenius Inc. was acquired for an agreed purchase price of $12.0 million, fully funded by a new €10.3 million, 3-year term loan facility with Allied Irish Banks, plc, at an interest rate of 2.0% over EURIBOR.

At the end of 2025, the Group had a closing cash position of €12.2 million (2024: €8.2 million) and a net debt position of €1.6 million (2024: net cash €2.0 million). We continue to hold an interest-free warehoused debt facility with the Irish Revenue Commissioners. This liability will be paid in full by April 2027, in accordance with the terms of the agreed payment plan.

Building on the Board’s decision to reinstate a progressive dividend policy, we declared an interim dividend of 0.82 € cent per share for the first half of 2025. This interim dividend was paid to shareholders on the register as of the applicable record date, 19 September 2025. Subject to shareholder approval at the 2026 AGM, the Board intends to pay a final dividend of 1.58 € cent per share, which will be paid in May 2026.

In June 2025, the Company announced the commencement of a £5 million share buyback programme, authorised under the general share repurchase authority granted by shareholders at the 2025 AGM on 7 May 2025. The programme is designed to reduce the Company’s share capital, with all repurchased shares cancelled. As at year end 2025, the Company had repurchased and cancelled 3.1 million shares at a total cost of £3.9 million, with buyback activity continuing in early 2026 in line with the programme parameters.

The Board is confident that our approach to capital allocation positions Hostelworld for sustainable growth while maintaining flexibility to pursue opportunities that strengthen our competitive advantage.

Sustainability

We recognise our responsibility to minimise environmental impact and promote responsible travel, and the Board remains committed to ensuring key ESG principles are fully reflected in how the business is run.

Our Staircase to Sustainability (“S2S”) framework helps hostels demonstrate and communicate their sustainability credentials to customers with clarity and transparency. A fifth of our hostels now carry an S2S badge, which is accredited by the Global Sustainable Tourism Council (“GSTC”). We continue to champion responsible travel and remain the only OTA represented on the GSTC’s advisory group for Small and Medium Enterprises.

We also take responsibility for emissions arising from our own operations. In line with Science Based Targets initiative criteria, the Company has established reduction targets, referenced to the baseline years in which they were first set. Scope 1 and Scope 2 emissions have reduced by 95% since the establishment of a 2019 baseline. Scope 3 emissions, excluding hostel emissions, have reduced by 37% since the establishment of a 2023 baseline.

For the fifth consecutive year we retained the South Pole ‘Taking Climate Action’ label. This independent recognition reflects our continued commitment to the robust measurement, management, and reduction of our carbon footprint. Further details on our sustainability strategy, performance, and targets are set out in the Sustainability Report to the Annual Report.

Board Changes

In September 2025, Ulrik Bengtsson stepped down as Non Executive Chair, having previously announced his intention to do so in March 2025. I assumed the role of Interim Chair while the Board continued its comprehensive process to appoint a permanent successor, resulting in the appointment, on 30 January 2026, of Marieke Bax as a Non Executive Director and member of both the Remuneration and Nomination Committees. Marieke will assume the roles of Chair and Chair of the Nomination Committee with effect from 31 March 2026. We extend a warm welcome to Marieke and look forward to benefiting from her experience, insight and leadership, as we continue to execute our strategy and build on the company’s positive momentum. Full details of the Board changes that occurred during the reporting period and in the period prior to the date of signing of this annual report are set out in the Nomination Committee Report within the Annual Report.

Conclusion

2025 saw Hostelworld strengthen its platform and scale its social travel proposition, focusing on deeper customer engagement, broader product relevance, and long term differentiation within the travel market. The progress made this year reinforces the Board’s confidence in the company’s long term direction and growth prospects.

As we look toward 2026, we will continue to invest with discipline to enhance the business for the benefit of all stakeholders. While the full financial contribution of our new features will build over time, they represent meaningful platform enhancements and provide a strong foundation for future growth. Our focus remains on building the world’s leading social travel platform and empowering a global community of travellers to connect, explore, and create unforgettable memories together.

On behalf of the Board, I would like to extend my sincere thanks to Gary Morrison and the management team for their leadership, and to all our colleagues for their dedication and contribution during the year. I also extend our appreciation to our partners, customers and shareholders for their continued confidence and support.