One of Europe’s leading hostel operators saw its share price jump this morning after saying that it expected full-year revenue to soar in the wake of demand from young backpackers.
Safestay, a high-end hostel owner listed on London’s Alternative Investment Market (Aim), is forecasting a 39 per cent rise in total revenues to £14.6m in the 12 months to the end of 2018, pushing shares up six per cent in early morning trading.
With new site openings in cities such as Barcelona and Vienna, the hostel operator said that "demand for the hostel experience from the digital generation, in particular, remains strong across the UK and the continent".
"The focus is to grow the brand and the company has the capital to support an increase from the 13 sites today to over 20, at which point the business will become self-funding and increasingly gain from economies of scale and brand growth," said Safestay chairman Larry Lipman.
Occupancy levels over the year to 30 December also grew from 72.8 per cent to 75.6 per cent.
In September the firm said it had sold a total of 284,000 nights in the first six months of 2018, increasing from 140,000 in the same period in 2017, with Lipman telling City A.M.: "We’re seeing businessmen in suits, single travellers, mum and dads with babies – there is a huge customer base now."
Lipman added: "There is a movement in the whole sector, of which we are playing a part. If you look at student housing as it was 10 years ago...that is where the student hostel market is today. There is so much opportunity and growing attention, and there are some big ticket deals being done."