Hostelworld Group plc (HSW) Earnings Call Transcript & Summary

So welcome, everybody. I'm delighted to have you join us for our interim results in 2026. I'm joined today by Caroline Sherry, our CFO; and David Brady, our Head of Investor Relations. And we're going to go through the presentation today and reserve some time for Q&A. If you send your questions to David, David will pass those out and then ask us at the end of the presentation. So if you could turn to Slide 5, please. So before I take you through the detail, let me give you the shape of the half year. Reported net transactions were 3.8 million, up 1%. Adjusting for the Middle East conflict, we estimate that net transactions would have been circa 4%. Net average transaction value was EUR 14.91, up 11%, driven primarily by Elevate lifting our effective commission rate. Net revenue was EUR 52.2 million, up 12%. Low double-digit growth, in line with the guidance we set at the Capital Markets Day. Three metrics in the middle row; engagement, efficiency and the margin it produces. First, social member messaging grew 65% year-on-year, following 84% in the first half of '25. The engagement number that really shows that our social network is genuinely compounding. Second, marketing was 49% of revenue, down from 51% and within our 45% to 50% guidance range. And that's driven by the growing structural benefit of the social network. Third, net margin grew 16% to EUR 22.9 million, and that's driven by the value and efficiency gains dropping through to the bottom line. On the bottom line, adjusted EBITDA was EUR 8.2 million, up 11% on the first half '25's EUR 7.4 million at a 16% margin. If you look at the constituent parts, transaction value and marketing efficiency added close to EUR 4 million. Most of that was reinvested with operating costs of EUR 2.3 million on platform investment and around EUR 0.8 million of deferred revenue timing. This leaves a net EUR 0.8 million uplift with EUR 3.2 million of deferred revenue unwinding as margin in the second half. We returned to a net cash position of EUR 2.5 million from net debt of EUR 1.6 million at December. And this really reflects strong underlying cash generation, which was driven by strong operating cash flow, EUR 6.1 million of adjusted free cash at 74% conversion. This cash flow funded the share buyback, the reinstated dividend and the warehoused tax repayment and still grew cash from EUR 12.2 million to EUR 15 million. And finally, we are continuing the progressive dividend, an interim of EUR 0.83 per share, which is marginally ahead of last year's EUR 0.82 per share. Overall, we delivered double-digit revenue growth with improving efficiency, EBITDA growth and a return to net cash, which is a strong first half despite a real external headwind driven by the Middle East conflict. That is the foundation for the rest of 2026. If we move to the next slide, please. So on the financial side, we delivered double-digit revenue growth with expanding margin despite that real external headwind from the Middle East conflict. Net revenue up 12%, in line with guidance. Driven by value, net average transaction value, up 11% as Elevate lifted our effective commission rate to 17.7%, and that's up from 15.8% in first half '25 and 16.7% in the second half of '25. Reported transactions up 1%, again, adjusting for the Middle East conflict, the underlying transaction growth would have been circa 4%. Marketing down to 49% of revenue from 51%, supporting net margin growth of 16% to EUR 22.9 million. Adjusted EBITDA, EUR 8.2 million, up 11% at a 16% margin. On the platform side, our transformation from a single product OTA to a compounding multi-stream social platform is well underway. A year ago, there was 1 revenue stream, which was our core hostel commission. Today, there are 3. There's the core hostel commission growing powered by Elevate, budget accommodation and Social Passes. On the new engines, budget accommodation, Social Passes and Events are bringing in new customers to our platform at low to 0 marketing costs and are accretive to the core. Our social network is the advantage that makes it compound. Social members now lead on transactions, revenue and margin and the app-centric nature of the social network makes it the most efficient source of growth. Second half is all about investing behind that, attracting more social members, deepening engagement through AI-powered matching and discovery and widening the distribution of budget accommodation and Social Passes, collectively keeping us on track for our Capital Market Day targets. This headline picture is a stronger, broader, more profitable platform, and Caroline will now take you through the detail. Caroline?

Many thanks, Gary. Good morning, everyone. I am now going to speak to Hostelworld's financial performance for the first half of 2026 in a little bit of more detail. So if we could move to the next slide, please. So this slide illustrates net transactions by customer nationality. The nationality of the customers who generated 3.8 million transactions in the first half of 2026. This represents growth of 1% year-over-year and reflecting varied regional performances. Looking first at European source customers, these grew by a modest 1%. Customers predominantly opting for shorter-haul European trips rather than long-haul travel. Customers from U.S.A. and Canada account for 22% of net transactions. And we saw the strongest growth from customers in these regions, growing at 10%, with Europe the greatest beneficiary of this demand followed by LatAm. Performance from Asia and Oceania source markets was impacted by the conflict in the Middle East, with these regions seeing the effect of lower long-haul international demand. So if we move to the next slide, please. This slide now looks at transactions on a destination basis. We've seen a strong surge in booking demand across many regions, including higher cost destinations. Demand across our core source European and North American markets were more resilient and more profitable. Total European destination demand grew by an estimated 6% on a combined basis. We saw strong source demand from intra-Europe, which was up 8%. This being the largest cohort of source customers across our business, with further growth from U.K. of plus 13% and U.S.A., Canada plus 9%. Within Western Europe, we saw strong growth in Spain, which was up 4% and France up 9%, 2 of our largest markets in Western Europe. The Czech Republic, our largest Eastern European market, grew 15%. Hungary, our second largest Eastern European market grew 16%. South Asia and Oceania destinations were impacted by the conflict. And as Gary said at the outset, we estimate that the conflict in the Middle East held volume growth back by about 3 percentage points, principally in longer-haul demand into Asia and Oceania. Asia did see growth from travelers originating in Oceania, which were up plus 6% and the U.S. and Canada, which was up 8%, with the overall regional decline primarily driven by fall in travelers originating from Europe. So if we could please move to the next slide, we're now going to look at how that transaction performance translated into revenue. Generated revenue, which is gross revenue less cancellations, was up 13% in the first half of the year. We saw strong revenue growth across all destinations with the exception of North Asia, where the decline in revenue was driven by a weaker yen. But focusing on Europe now. Western Europe revenue increased by 10%, significantly outpacing the 3% transaction volume growth. Eastern Europe revenue grew by an impressive 28%, and again, outpacing transaction growth of 15%. Despite the impact of the conflict on travel to Asia and Oceania, both regions saw strong revenue growth. And LatAm saw material growth in revenue of plus 17%, which was a record for that region. South Asia also delivered material revenue growth, growth of 18%. So despite booking softness, we've seen strong uptake of the Elevate product in this region, which has driven that double-digit revenue growth. Revenue per transaction grew 11% to EUR 14.90, and the primary driver of this was Elevate. Elevate being our marketplace monetization tool, which, as Gary said, lifted our effective commission rate to 17.7%, up from 15.8% in the first half of last year. So revenue per transaction also benefited from favorable geographic mix, some modest bed price inflation and growth in feature listing revenue, which is our advertising income stream. Then moving to the next slide. Let's examine how this performance has translated into margin. So, in H1 2025, we generated EUR 19.8 million in net margin. And since then, we've generated 3.8 million net transactions, as we discussed, and EUR 52.2 million in revenue. Average transaction value was 11% higher year-over-year. And as mentioned in the previous slide, this is driven by the continued uptake of Elevate, which we launched in May of last year. So the combination of a higher take rate of favorable geographic mix as Europe continues to grow, delivers this 11% average transaction value upside. Paid marketing costs as a percentage of revenue, reduced from 51% to 49%. So this efficiency in marketing spend delivered an EUR 800,000 benefit to margin. An increase in deferred revenue delivered an EUR 800,000 reduction to margin. So this deferred revenue provision movement relates to free cancellation bookings and will unwind as revenue, so a benefit in the second half P&L. Combining these factors, net margin for H1 2026 was EUR 22.9 million, representing double-digit 16% growth year-on-year. And then moving to the next slide. So now we're going to look at our operating cost base. These are costs excluding paid marketing. And this slide shows the evolution of our cost base over the past 3 periods. Operating costs in H1 2026 were just over EUR 2 million higher than the prior year. As outlined at our Capital Markets Day in April 2025, we invested in strategically important areas to support the delivery of our key initiatives; monetizing our social network, expanding our addressable market and strengthening the core for future growth. So looking at our cost base and taking it from bottom up, wages and salaries are the largest component of our operating cost base. And the increase there was driven by an increase in our headcount from 267 employees in June of 2025 to 276 employees in June 2026. The increase reflects the full-year run rate impact of investment in products and marketing resources as well as salary inflation. The next block, the Navy block, our contractor costs. These have increased as we brought in temporary resources to support development of products, which are generating new revenue streams, such as Social Passes, third-party inventory and the integration of OccasionGenius. The next block are our platform and technology costs. This is the gray block, and these costs increased year-on-year, and the increase supported the strategic initiatives, including the investment in AI capability and the OccasionGenius integration. Finally, other operating costs, the blue block at the very top, that's down year-on-year marginally, and that reflects our continued prudent management of our discretionary cost base. Okay. So on to the next slide. This chart illustrates the acceleration in performance across all key metrics from H1 2025 into H2 2025 and through to H1 2026. We noted at our preliminary results in March that there have been a significant step-up in performance from H1 '25 to H2 2025 across average transaction value, revenue, marketing investments and margin. And these trends have all continued through H1 2026 despite the headwinds from the Middle East conflict. Transaction values are growing faster, driving double-digit revenue growth, again, despite the conflict headwind. Marketing investment is more efficient. And together, these factors are growing margins. Gary will speak to the customer behaviors and segments underpinning these numbers in more detail in his section. So moving to the next slide. And bringing these elements together, this slide shows how our performance translated into adjusted EBITDA. Starting from the left, we generated adjusted EBITDA of EUR 7.4 million in H1 2025. Net transactions grew by 1% and average transaction value grew by 11%. And combined with a lower marketing percentage, resulted in a EUR 3.9 million increase in margin. A EUR 0.8 million increase in deferred revenue arose from a provision movement relating to free cancellation bookings, which will unwind incremental revenue in H2 2026. Operating costs increased by EUR 2.3 million, reflecting the increase in platform and development costs covered on the previous slide. And so consequently, adjusted EBITDA for H1 2026 stands at EUR 8.2 million, an 11% increase on H1 2025, giving an adjusted EBITDA margin of 16%, which is flat year-on-year. And one thing that's important to note is that EUR 3.2 million of H1 2026 revenue has been deferred, and this will unwind as profit in H2. So now moving on to the next slide. We're going to look at how our H1 performance translated into cash. We started the year with EUR 12.2 million of cash. We recognized just over EUR 52 million in net revenue. Offsetting this were direct costs of just over EUR 29 million and operating costs of EUR 14.7 million. And taking into account working capital movements and cash items such as exceptionals, the business generated EUR 7.6 million of cash from operating activities in the first half of this year. Our adjusted free cash flow conversion increased to 74%, up from 65% in H1 2025. And this reflects adjusted EBITDA growth, a working capital inflow and the cash-generative nature of the business. We acquired OccasionGenius, which is our B2B event discovery platform in Q4 of last year. And this acquisition was funded by a 3-year, EUR 10.3 million debt facility we drew down with AIB at an interest rate of 2% of the EURIBOR. And we commenced paying interest on this facility in H1 at a cash cost of EUR 0.2 million. The group also continued to repay its warehouse tax liability to the Irish tax authorities in line with the agreed schedule, paying EUR 1.3 million in the first half of the year. The group concluded its first ever share buyback program in April of this year at a cash cost of EUR 1.3 million. A final dividend of EUR 0.0158 per share was paid in May, bringing the total FY 2025 dividend to EUR 0.0240 per share. And this delivers a closing cash position of EUR 15 million, returning the business to a net cash positive position of EUR 2.5 million. And now, in the next slide, we're going to focus on how our strong cash generation supports a range of capital allocation options. In H1 this year, as I mentioned, we paid the final FY 2025 dividend, and that brought the total FY '25 dividend paid to EUR 3 million. And we're also pleased to announce today that the Board has declared an interim dividend of EUR 0.83 per share for the 6 months ended 30th of June 2026, and this will be payable in September. The group operated a GBP 5 million share buyback program from June 25 to April 26, under which over 4 million shares were repurchased and subsequently canceled, which represented just over 3% of the original issued share capital. And as I mentioned on the previous slide, the group is participating in the Irish Revenue Debt Warehousing Scheme, under which payment of certain Irish employer tax liabilities, which arose during COVID was deferred. Repayments continue in line with the agreed monthly schedule, and there's an outstanding balance of EUR 2.2 million expected to be repaid in full by April of next year. And there's no interest payable under the terms of the scheme. And finally, in October 2025, as I mentioned, the group entered into a debt facility with AIB to fund the acquisition of OccasionGenius. And during the period, we commenced payment of interest on that facility and repayment of the principal will commence through quarterly installments beginning in July of this year. All told, we have returned EUR 10 million to shareholders since our Capital Markets Day in April of last year. And so the final slide in my section is going to focus on ESG. And ESG is something which is fundamental to the Hostelworld business. From the 4 million-plus social members for whom we create meaningful social connections through to the over 2,700 hostels participating in our unique Staircase to Sustainability program, ESG is genuinely at the core of our culture and our category. This focus was formally recognized when we were honored to receive the Investor in Diversity Gold accreditation, 1 of just 34 organizations in Ireland to hold the accreditation and the first travel company to do so. And as a company, we remain committed to managing our Scope 1, 2 and 3 carbon emissions, having obtained South Pole's Taking Climate Action Silver label for the fifth consecutive year and having been awarded a CDP B rating. And with that, I'll hand back to you, Gary. Thank you.

Thank you, Caroline. I'm now going to take you through the strategy update, and I want to use it to do 3 things. First, show you how the business has changed from a single product OTA to a multi-stream social platform. Second, give you the evidence that the social network and crucially its social members are now driving both our growth and our margin. And third, explain why the platform we've built is well positioned for the shift to AI-powered discovery. So if you could turn to the next page, please. So this slide really captures how the business has changed, where we started on the left and where we're heading on the right. So 2 years ago, prior to the Capital Markets Day in April '25, we were really a hostel-focused OTA. We had a fixed addressable market. We only had hostels, static commission rates and a chat-based social network with a fixed number of destinations where we had hostels. Moving to the right, today, 3 things are different. We have a structurally larger market, a deeper inventory across many more destinations through hostels and budget accommodation and Social Passes reaching members beyond those booking a bed. Secondly, we're monetizing the core more effectively with more and more hostels using Elevate to manage their occupancy, which in turn lifts our commission rate. And finally, the new products compound that advantage. Social Passes and budget accommodation are bringing new social members into that social base at low or 0 marketing cost. And more members means richer data, better matching, which attracts more members again. And because, as I will show you later in the presentation, those social members are materially more profitable, every turn of that wheel lowers our marketing as a percentage of revenue and that same social data that our social members generate every day in the network is exactly what an AI-mediated world will reward. Moving to the next slide, please. So, one definition first, net transactions for the avoidance of doubt here include all 3 streams, our directly contracted hostels, budget accommodation and Social Passes. So reading each chart left to right, you can see we have first half '25, second half '25, first half '26 and then a war adjusted first half '26 bar. Looking at the first panel, reported net transactions were up 1%. But again, if you adjust for the Middle East conflict, net transactions would have been circa 4%. Reported revenue per transaction was up 11%, primarily driven by Elevate. However, adjusting for the Middle East conflict would have actually brought that number down slightly given that the conflict knocked out long-haul travel from Europe to Asia primarily, and Asia is our lowest bed price region. So as a consequence, this would pull down the war adjusted average if you added it back in. Reported generated revenue was up 13%. Again, adjusting for the Middle East conflict, this would have been [ nearer ] 15%. Marketing as a percentage of net revenue was down to 49% year-over-year from 51% a year earlier. And adjusting for the Middle East conflict, we think this would have been circa 48%, which is comfortably within our 45% to 50% guidance range. But crucially, the pattern is the same across all 4 metrics. The reported growth held back by an external sector-wide event with a clearly stronger business momentum underneath. Moving to the next slide, please. So this is the status of each new product initiative, left to right in terms of their geographic coverage, the impact they are having and what comes next. So I'm going to start with the core hostel business. Elevate lifted our effective commission rate by 190 basis points to 17.7%, up from 15.8% a year ago. And for clarity, we are assuming that this is going to be the run rate on a full year basis. Turning to budget accommodation. About 18% of its buyers are new to Hostelworld at low to 0 marketing cost. It's highly accretive to the core because it captures unmet demand. Bookings for destinations with rooms, we simply couldn't serve with our own hostel inventory rather than substituting for it. Turning to Social Passes. About 39% of Social Pass buyers, again, are new to Hostelworld, again, at low to 0 marketing cost. Importantly, 1 in 5 of these go on to book core inventory within 90 days and 97% of those bookings happened in the app. So it's very high margin. And finally, Events. We have an event or rather things to do catalogs live in 750 cities updated daily. And to be clear, this is content our customers really want. It's their #1 requested feature. Most tell us they've missed events they wanted to attend because they didn't know about them. And they're far more likely to go to an event if there is a connection they've made on the network going to. In terms of next steps, the platform integration is on track for early Q3, and that's when things to do content goes live in the social network, which in turn enhances the Social Pass proposition. If we could turn to the next slide, please. So in the first half, we continued to invest in the social network across 3 fronts. Broadly speaking, we've been spending a lot of time prioritizing our marketing spend towards recruiting more social members. Second, we've been broadening the network with budget accommodation, which brings in new customers who then join the and use the network and Social Passes, of course, which provide a paid route into the network. Finally, by continued investment in recommender loops that suggest people to message one-to-one and AI-powered trending threads, which are personalized to each member. And that shows up directly on the numbers on the right-hand side on a year-over-year basis. So unique social members up 7%, unique chat users up 26%, messages sent up 65%, and finally messages per unique user up 30% year-over-year. And I think importantly, what you can see with these numbers is that engagement is growing faster than membership. And that's really the signature of network effects taking hold. Each new member makes the network more valuable for everyone else, which pulls in more members again. So, this slide is incredibly important as it connects people who use the social network from the [ par ] slide to that monetary value to the business in terms of transactions, revenue and direct margin. So starting with a few explanations. These curves follow a fixed group of acquired customers over their first 52 weeks, cumulative transactions then revenue, then direct margin, left to right, split by whether they become a social member at acquisition or not. In that regard, we classify each customer once, and we do that at the end of their first trip when the first chat window closes 1 day after checkout date, and we never changed that classification. Fixing it at acquisition in this particular way really matters for 2 related reasons. Reason number one, we verified that the pattern that you see on the slide holds remarkably constant across 2.5 million new customers acquired since July 2023. And the second reason is, because of the first, it lets us line up every marketing and product decision behind just one goal, acquiring more social members. On every measure, the gap is large and it widens across the year. On transactions and revenue, a social member delivers materially more transactions and revenue than a non-member by the end of that first year. On direct margin, the chart on the right, the gap is the widest because social members cost less to acquire and less to serve because they download the app to use the social network and then they use it to make most of their bookings. So if you were to step back and size what the price is, if all of our customer base comprise social members, our marketing costs in the long run would then tend to 35% to 40% of revenue and indeed closer to the 35% than the 40%. So that is the structural margin engine for us. As the mix-shift shifts to social members, our marketing percentage will naturally come down. On to the next slide, please. So as a consequence of this insight, we've been on a journey to recruit more social members onto our platform since we launched the social network. The previous slide followed those customers one at a time. This slide adds them all up to show our progress to date over the last 4 years. The segmentation is exactly the same. Each customer fixed to their status at the first chat window close. But here, we total the transactions revenue and direct margin across 4 sequential 12-month periods, each running July to June, starting in July '22 with the latest ending in June 2026. So as you'll see from the 3 charts, our social member base leads on all 3 metrics: net transactions, generated revenue and direct margin. And direct margin materially so, as per the prior slide, given the app-centric nature of the network, margin always grows faster than revenue for social members, which in time will provide that structural downward pressure on marketing as a percent of revenue. So the real conclusion here is that our social member base is now the biggest, fastest-growing and most efficient contributor to our overall business results and why we are going to continue to invest aggressively behind it. Turning to the next slide, please. And that investment is really being directed into 2 main areas as we enter the second half. First, we want to attract more social members. So we're expanding our use of our own first-party data to be able to create audiences that allow us to target the highest value customers. We're building awareness of the social proposition through mid and upper funnel marketing. And we're opening up the social network-led recruitment channels by thinking about referral programs directly into the network. And at the same time, we're looking at product initiatives that help deepen the network's pool. So we're looking at building a social -- a persistent social graph that keeps travelers engaged with us and connected trip to trip. We're launching the daily event discovery in the social network across 750 cities in early Q3. And we'll continue to deploy more AI-powered matching as the member data set grows. Next slide, please. So as I mentioned earlier, our social network messaging growth and growth per user not only provides value to our social members through network effects, but it's also the engine that fuels our first-party data moat [indiscernible], comprising who's going, what's happening, who connects with whom across millions of members, tens of millions of messages and tens of millions of booking from social members that we use to power the network. And given that we own the 2 monetized gates to that social network, the full social experience is only available in our app if you make a booking on our platform or purchase a Social Pass. And in terms of our execution plan, in the first half, we built the enabling layer, making our event, inventory and event data more accessible to AI platforms. And through the second half, we will continue that work, broadening out access to our data selectively to AI platforms and instrumentation of AI referred traffic and conversion so we can measure the returns on those investments. Next slide, please. So this is the progress against the framework we set out at our Capital Markets Day with the drivers on the left and the scorecard on the right. So if we look at the drivers delivering now, commission rate expansion is at 17.7%. Again, we expect that stat to stay relatively flat to the end of the year. Budget accommodation live with cross-platform rollout underway. Social Pass distribution is expanding, OccasionGenius event integration on track for early Q3, marketing efficiency within range and operating leverage building on an asset-light platform. Turning to the right. The scorecard sets H1 actuals against the full year targets as stipulated in the Capital Markets Day. Net revenue, EUR 52.2 million in the half, growing 12% against a low double-digit full year target. Marketing, 49% of revenue inside the 45% to 50% range. Adjusted EBITDA margin, 16% in a first half that still carries the deferred revenue timing against a full year target above 20%. And adjusted free cash flow conversion of 74%, ahead of the 70% target. So really from here on in, our investment goes into growing the social base, which is the biggest, the fastest-growing and the most efficient contributor to our overall business results. So finally, turning to the last slide. So let me close with 3 things I want you to take away from today. First, we have a stronger, broader, more differentiated platform; 3 revenue streams where there was 1; a materially larger addressable market; and a compounding proprietary social network. Second, higher value at higher margin. Social members are worth far more per customer and now lead on every metric. So growing the base lifts both the pace or the velocity and the profitability of our growth. And third, not unsurprisingly, our priority from here is to grow the social base. It is the most efficient lever we have for compounding profitable growth. And I think finally, we said at the Capital Markets Day, we were building the social travel platform for the AI era. And I think in the first half, we've shown that it works. And from here on, we scale it. So thank you very much for your time listening to Caroline and I this morning, and I will now turn it over for Q&A. David?

Thank you, Gary, and good morning, everybody. Let's jump straight into the questions and cover as much as we can in the time that we have. Gary, a lot of interest in the new material and the new light that we've shared on the performance of social and nonsocial cohorts. I have a couple of questions for you on that. Firstly, does that split and difference in characteristics and performance between the 2 inform how we think about our marketing spend and our marketing allocation?

So it most definitely does. As you'd have seen from the presentation, over the first 52 weeks of a newly acquired social member versus a non-social member, social members have much higher transactions per customer, much higher revenue per customer, much higher direct margin and better direct margin profitability. So we have years of data to be able to see that those relationships hold over a period of time. So we are very much focused on allocating our product resources and our marketing expenses against acquiring more new social members.

So Gary, you touched on it there. You said that it's held over a number of years. Fair to say that this picture looked the same, similar last year and the year before. And then the other thing is which we didn't show, but maybe you can say something around, what do those trends and curves look like in year 2. So we've shown what the first year post acquisition looks like and how does it evolve in year 2?

So, we haven't actually shown that data. We can certainly show it when we get to preliminary results next year. What I would say to people is, these are classic retention curves. And you might expect that if you look at a mathematical property and extend them by a year, you're probably about right.

And the last question on this for the moment, Gary, before I move on to another topic. How do you think over the medium-to-longer term, this could impact our marketing guidance range of 45% to 50%. What is the potential there and what would drive improvement there?

So on one level, the evidence that we've shown today says structurally, as the mix of the business shifts to social members, then logically speaking, marketing as a percentage of net revenue would fall. If I look at the next 18 months, meaning balance of this year into 2027, the guidance is still low double-digit revenue across the 2, marketing, 45% to 50%. And that's also in recognition that the landscape where we acquire customers, whether social or non-social, is changing. Years ago, people would talk about the fact that SEO had given way to paid advertising. Now over the last 12 or 18 months, AI overviews are giving way to paid advertising. So there's lots of changes. And of course, we also have the rise of the AI platforms in terms of citing without delivering traffic. So there's many changes that are afoot. We are responding to those changes with our new CMO, Richard Bowden, and evolving our own marketing mix. So I think the guidance that we've given for the next 18 months is still appropriate. I would hope on the assumption that we have a Capital Markets Day, say, early 2028, we will be able to give fresh guidance then.

Thanks, Gary. We'll turn to the commission rates and Elevate for a moment, please. Have we seen even or uneven take-up in Elevate in different regions around the world? And in your view, has it impacted volume growth in those regions?

So I'm going to take the second part of the question first. No, it hasn't impacted volume growth. Hostels are freely able to choose whether to use the product or not in order to manage their occupancy. What we do see is that in any given city, there is a variety of penetration, meaning the number of hostels who use it, and also the levels of commission that they choose to put into the platform. So it is a very dynamic marketplace. But what we have seen when we look at the inventory, the quality of the inventory, both in magnitude and in competitiveness, that has not changed.

Yes. And I know you've touched on this before, but we'll just do it again because the question came in. Looking into the medium term, the rate we're at, at the moment, is that a reasonable planning assumption for people in their forecast?