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Safestay has announced that total revenues, including discontinued operations, rose by 18% to £22.5m in its full-year results, up from £19.1m the prior year, as occupancy hit 71.4% over the period.
While Adjusted EBITDA increased by 15% to £6.8m, the group did report that its net loss widened to £1.3m, following a £1m Bratislava impairment.
In spite of a challenging backdrop, the average bed rate increased to £23.74, up from £23.63, and the group also reported a recovery in group bookings with a new office set up in Warsaw to focus solely on this segment.
Safestay also made a significant investment into refurbishments across its portfolio, with 3% of revenues spent on this over the period. Other milestones over the year included the launch of a new website in July 2023 to drive direct sales, and the acquisition of a 225-bed hostel in Edinburgh for £4.3m.
The group noted that forward bookings as at 1 January are “significantly” up on last year at £3.7m, up from £1.9m in 2023, with forward bookings driven by large school and college groups.
Larry Lipman, chairman of the company, said: “Our collection of premium hostels continues to resonate with our core client base and our popularity and appeal is growing, resulting in us selling 848,633 bed nights in 2023. I am delighted to see that our pipeline is as strong as ever, with forward bookings up significantly at the beginning of the year.
“We are in a strong position to grow the business organically and there is a huge opportunity to grow our group bookings. Acquisitions will also play their part in driving growth. We have three new hostels due to come on stream this summer and I have no doubt that they will prove to be fantastic additions to our portfolio.”
Alongside its full-year results, Safestay announced it has acquired a freehold property in the centre of Brighton, from the University of East Sussex, and plans to convert it into a 220-bed hostel. As part of the completion process, the charges on the property will be satisfied as the sale is conditional on this.
The building is a Grade II listed end of terrace property located in the heart of Brighton, just 600m from the seafront. Set over five storeys and totalling 15,285 sq ft, the building is currently vacant.
Safestay said it will seek planning permission to convert the regency-style building into a hostel offering 220 beds, 200 of which will be in dormitory style accommodation and 20 in private rooms.
The additional cost of conversion is estimated at £1m and should take around six months. In its first year of trading, sales and EBITDA are projected to be £750,000 and £250,000 respectively.
Safestay Brighton will mark the company’s sixth hostel in the UK and the twentieth for the group as a whole.
