Full year bookings at Hostelworld are projected to less than a quarter of 2019 levels.

Recent bookings have slumped in the face of tighter global Covid travel restrictions.

Revenue is also expected to be down by as much as 84% over last year when it reported €80.7 million.

The hostel-based specialist OTA saw a “very modest” recovery in domestic bookings in late June, and short haul bookings into Europe in July and early August as travel restrictions were eased.

“At that time, we stated that we expected the pace of recovery to be driven by changes in travel guidance in individual markets over the coming months, both positive and negative,” Hostelworld said. 

But in a trading update today, the company said: “Since the end of August, travel restrictions have tightened globally and we have seen demand level off, and in recent weeks we have experienced a marked deterioration in bookings.

“We have also seen a greater than expected decline in ABVs [average booking values] driven in part by bed price deflation and adverse foreign exchange movements.”

The company no longer expects an improvement in the macro travel environment and therefore expects any recovery to be “muted”.

Hostelworld now expects full year net bookings to be in the range of 20%-22% of 2019 levels and net revenue to be in the range of 16%-18%.

The group revealed a monthly operating cash burn of €2 million through the third quarter of the year, expected to reduce in the final three months of the year.

It had €22.6 million in cash at October 9 against €29.4 million at the end of June – the month of fund raising via a share placing.

The company said: “Since the group’s equity placing in June, we have continued to actively assess our future funding needs and cost base in the light of continued uncertainty. 

“Finally, as noted in our interim results we have continued to deploy significant enhancements to strengthen our core platform during Q3 and will continue this progress into Q4.

“We expect these enhancements will result in strengthened marketing capabilities, an improved user experience and increased inventory competitiveness when normal travel patterns resume.”