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Safestay has reported a decrease in group revenues to £20.6m for the year ended 31 December 2025, down from £23m in the previous year, following difficult trading conditions across Europe.
The hostel operator saw adjusted EBITDA fall to £3.7m from £6.5m amid the lower sales, while reporting a loss after tax of £10.1m.
While UK revenues fell by 6% to £8.5m, which accounted for 41% of total group revenue, overseas revenues fell 13.5% to £12.1m, reflecting challenging trading conditions across several of its European markets.
The group said occupancy levels in the region were hit by consumer behaviour changes as a result of the conflict in the Middle East as well as by tourist levies introduced in several European destinations, which are increasing the overall cost of travel for visitors.
In total, occupancy levels dropped to 70% and revenue per available bed fell to £16.43, while total bed nights decreased by 6% to 877,674, down from 931,688 the prior year.
Over the year, Safestay’s footprint expanded to 22 properties in 2025, including hotels operated directly, under development, and under franchise, compared with 19 in 2024. It also sold two freehold sites in Edinburgh and Brighton during the year, while adding three new hostels in Italy and Austria.
Larry Lipman, chairman of Safestay, said: “Against the backdrop of a challenging pan-European trading environment, during 2025 the Board took proactive measures to manage the composition of the portfolio, significantly strengthen the balance sheet, and improve long-term performance. This included the sale of two freehold sites in the UK in Edinburgh and Brighton, whilst continuing to strategically expand the portfolio in attractive locations, with three new hostels added in Italy and Austria.
“Our focus remains on delivering sustainable growth and creating value for shareholders, underpinned by a leading customer proposition. With a strong brand in the European hostel market, well-invested systems and a pipeline of growth opportunities including franchising, we remain confident in Safestay’s ability to deliver sustainable growth and shareholder value creation.”
