Hostelworld has raised around £13.8m through a share placing, which it said would “materially strengthen the group's position, in an uncertain environment”.
The OTA said that it was hoping for a “modest and steady recovery throughout 2021”, but was also preparing for a second wave of Covid-19, “leading to significant disruption in global travel”.
The group also has €15.2m of cash on hand.
Gary Morrison, CEO, Hostelworld, said: "In these unprecedented times, our key priorities have been to (i) support our employees, our customers and our hostel partners; (ii) preserve our cash; (iii) strengthen our capital base as part of our contingency planning and (iv) take this opportunity to progress, where possible, our Roadmap for Growth.
“While the short term outlook for the travel industry remains extremely challenging, I remain confident that Hostelworld will emerge from the Covid-19 crisis stronger than before and be able to seize market opportunities when normal travel patterns resume.
“The group expects to have greater flexibility and resilience to operate through an extended period of disruption, with the potential in the Base Case to invest and react quickly to commercial opportunities when they arise. The placing provides essential liquidity in both of the indicative scenarios that we have considered, with the ability to accelerate growth in the Base Case.”
Hostelworld updated on trading, with first-quarter Ebitda decreasing by c. €4.8m when compared to the same period for 2019. It forecast a first-half 2020 Ebitda loss in the range of €8m to €9m.