TIDMHSW

RNS Number : 2120T

Hostelworld Group PLC

23 March 2021

LEI: 213800OC94PF2D675H41

23 March 2021

Hostelworld Group plc

("Hostelworld" or the "Company")

Publication of Annual Report for 2020 and Notice of 2021 Annual General Meeting

Annual Report and Accounts

Hostelworld, the world's leading hostel-focused online booking platform, is pleased to announce that its Annual Report 2020 has been posted or is being made available to shareholders today.

Annual General Meeting

The Company confirms that its Annual General Meeting will be held at 12 noon on 26 April 2021 at the offices of the Company, Floor 2, One Central Park, Leopardstown, Dublin 18, Ireland. A Circular containing the Chairman's Letter and Notice of 2021 Annual General Meeting and Form of Proxy has also been posted or is being made available to shareholders today.

Whilst the AGM will be held at 12 noon on 26 April 2021 at the Company's head office: Floor 2, One Central Park, Leopardstown, Dublin 18, Ireland, please note that in light of the COVID-19 pandemic and in anticipation of social distancing measures remaining in force, it is intended that the meeting will be run as a closed meeting and shareholders must not attend in person. Shareholders are therefore strongly encouraged to submit a proxy vote in advance of the AGM, in accordance with the explanatory notes set out in the notice of AGM.

Documents available for inspection

The following documents:

-- Annual Report 2020;

-- Circular containing the Chairman's Letter and Notice of 2021 Annual General Meeting;

-- Form of Proxy;

have been submitted to the UK Listing Authority via the National Storage Mechanism, and the Irish Stock Exchange (trading as Euronext Dublin), and will shortly be available for inspection at the following location:

https://data.fca.org.uk/#/nsm/nationalstoragemechanism

and at:

Companies Announcements Office

Euronext Dublin,

28 Anglesea Street,

Dublin 2

The Annual Report 2020 has also been filed with the Central Bank of Ireland.

The Annual Report 2020, the Circular containing the Chairman's Letter and Notice of the 2021 Annual General Meeting and the Form of Proxy are available on the Company's website at www.hostelworldgroup.com .

Regulated Information

The information set out in the Appendix, which is extracted from the Annual Report 2020, is included for the purposes of complying with DTR 6.3.5 and its requirements on how to make public annual financial reports. The information in the Appendix should be read in conjunction with the Company's preliminary results for the year ended 31 December 2020 released on 17 March 2021 which can be viewed at www.hostelworldgroup.com . Together, these constitute the material required by DTR 6.3.5 to be communicated in unedited full text through a Regulatory Information Service.

Contacts:

Hostelworld Group plc

Caroline Sherry, Chief Financial Officer

John Duggan, General Counsel & Company Secretary

Tel: +353 (0) 1 498 0700

Appendix:

Directors' Responsibilities Statement

The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare Financial Statements for each financial year. Under that law the Directors are required to prepare the Group Financial Statements in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and International Financial Reporting Standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union. The Directors have elected to prepare the parent Company Financial Statements in accordance with FRS 101 Reduced Disclosure Framework ("Relevant Financial Reporting Framework") and applicable law. Under company law the Directors must not approve the Financial Statements unless they are satisfied that they give a true and fair view of the assets, liabilities and financial position of the Group and Company and of the profit or loss of the Group for that period.

In preparing the parent Company Financial Statements, the Directors are required to:

   --    Select suitable accounting policies and then apply them consistently; 
   --    Make judgments and accounting estimates that are reasonable and prudent; 

-- State whether Financial Reporting Standard 101 Reduced Disclosures Framework has been followed, subject to any material departures disclosed and explained in the financial statements; and

-- Prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

In preparing the Group Financial Statements, International Accounting Standard 1 requires that Directors:

   --    Properly select and apply accounting policies; 

-- Present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;

-- Provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Group's financial position and financial performance; and

   --    Make an assessment of the Company's ability to continue as a going concern. 

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the Financial Statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of Financial Statements may differ from legislation in other jurisdictions.

Responsibility Statement

We confirm that to the best of our knowledge:

-- The Financial Statements, prepared in accordance with the Relevant Financial Reporting Framework, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole;

-- The Strategic Report includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face; and

-- The Annual Report and Financial Statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's position and performance, business model and strategy.

This responsibility statement was approved by the Board of Directors on 16 March 2021 and is signed on its behalf by:

John Duggan

Company Secretary

16 March 2021

Principal risks and Uncertainties

The Board takes overall responsibility for identifying the nature and extent of the risks to be managed by the Group to ensure the successful delivery of its strategic and business priorities. The Audit Committee monitors certain risk areas and the internal control system, as set out in the report on governance. The Group's risk register identifies key risks including any emerging risks and monitors progress in managing and mitigating these risks and is reviewed regularly during the year by the Audit Committee and at least annually by the Board. Emerging risks are identified from areas of uncertainty, which may not have a significant impact on the business currently but does have the potential to adversely affect the Group in the future.

The most material risks facing the Group are set out in the table below, together with comments on how they are managed to minimise their potential impact. While the table below is not prioritised nor an exhaustive list of all risks that may impact the Group, it is the Board's view of the principal risks at this point in time. Individually or together, these risks could affect our ability to operate as planned and could have a significant impact on revenue and shareholder returns. Additional risks and uncertainties, including those that have not been identified to date or are currently deemed immaterial, may also, individually or together, have a negative impact on our revenue, returns, or financial condition.

 
 Number   Category             Description and Impact                Management and Mitigation              Direction 
                                                                                                             of change 
 1        Macro Economic       Revenue is derived from the wider     In circumstances where events cause    Increased 
           Conditions          leisure travel sector.                a material decline in consumer 
                               The COVID-19 pandemic and the         travel behaviours and patterns 
                               resulting measures, including         on a global scale, such as the 
                               travel restrictions, implemented      recent COVID-19 pandemic, management 
                               by governments around the world to    will take necessary actions 
                               reduce the spread of COVID-19 has     to conserve cash. 
                               resulted in an unprecedented          There has been an increased and 
                               decline in consumer spending,         on-going focus by the Group on 
                               travel and related activities. This   liquidity management. 
                               pandemic has adversely affected       New sources of debt and equity 
                               our business and the outlook for      financing have been secured which 
                               the future remains uncertain at       provides additional flexibility 
                               present and it is not yet             to support the Group as it recovers 
                               known when international travel       from the impact of the COVID-19 
                               will return to normal levels.         pandemic. 
                               Perceived or actual economic          Our business is a global one, with a 
                               conditions, including slowing or      dispersed population of users, and a 
                               negative economic growth, rising      geographically dispersed 
                               unemployment rates,                   set of destinations. Whilst market 
                               weakening currencies, higher taxes    conditions may decline in certain 
                               or tariffs could impair customer      regions, the globally 
                               spending and adversely                diversified nature of the business 
                               affect travel demand. In addition,    helps to mitigate this. 
                               events beyond our control such as     FX movements may impact travel 
                               unusual or extreme weather,           decisions and travel patterns by 
                               travel related health concerns        customers, but typically there 
                               including the COVID-19 pandemic       is a degree of counterbalancing 
                               mentioned above or travel-related     movement e.g. the weakening of the 
                               accidents                             US dollar against the euro 
                               can disrupt travel and result in      means fewer US travellers visiting 
                               declines in travel demand. Because    the Eurozone, but decreased 
                               these events or concerns              marketing costs from USD denominated 
                               are largely unpredictable,            suppliers such as Google. FX 
                               influencing customer demand and       translation risk is mitigated 
                               behaviour, they can adversely         through matching foreign currency 
                               affect                                cash outflows and foreign currency 
                               our business and results of           cash inflows and by minimising 
                               operations.                           holdings of excess noneuro 
                               Significant movements in FX rates     currency above anticipated outflow 
                               can have a material impact on         requirements. 
                               travel demand and travel patterns 
                               therefore impacting revenue. 
         -------------------  ------------------------------------  -------------------------------------  ----------- 
 2        Working Capital      Resulting from the detrimental        When COVID-19 began there was a        Increased 
           Investment and      impact that COVID-19 has had on the   robust assessment taken by Directors 
           Going Concern       travel sector there                   of principal risks facing 
                               has been a significant impact on      the Group including those that 
                               our working capital resources,        threaten its business model, future 
                               which creates a risk that             performance, solvency or liquidity. 
                               the Group will not be able to         New funding was received through an 
                               continue in operation and meet its    equity raise and debt 
                               liabilities as they fall              financing. 
                               due. The Group has prepared a         The Group is focused on cash 
                               five-year budget which assumes a      forecasting, tight cost control and 
                               return to growth.                     managing supplier and customer 
                               There is a risk that the travel       relationships. 
                               sector will not return to trading     Key metrics and reporting reviewed 
                               volumes in line with expectations.    regularly in management accounts and 
                               Our ability to invest and grow is     at management meetings. 
                               further constrained by our 
                               financial resources. 
         -------------------  ------------------------------------  -------------------------------------  ----------- 
 3        Capital              The Group has reviewed its capital    The Group engaged with large firm      Increased 
           Structure           structure and strengthened its        corporate finance advisers to review 
                               capital base with two landmark        and discuss the 
                               transactions in June 2020:            optimal capital structure. 
                               -- Equity Placing                     The Group has performed weekly 
                               -- Debt Raising                       forecasting of cash resources and 
                               Since the IPO in 2015, the Group      monitored closely the covenants 
                               had neither placed equity nor         and obligations caused by any debt 
                               raised debt. These two transactions   agreements in place. Monthly 
                               carry inherent risks. Equity          reporting has been put in place to 
                               placing leads to higher scrutiny      ensure the terms of the new 
                               from shareholders both                term loan facility and related 
                               participating                         reporting requirements are adhered 
                               and non-participating.                to. 
                               In 2021 the group entered a new 
                               term loan facility for EUR30m. 
                               Debt, by creating repayment 
                               obligations and covenants, requires 
                               constant monitoring of the Group's 
                               leverage and 
                               liquidity. 
         -------------------  ------------------------------------  -------------------------------------  ----------- 
 4        Impact of            The continued threat of terrorist     Our target 18-34-year-old population   Unchanged 
           terrorism threat    attacks in key cities and on          tend to be both flexible as to 
           on leisure travel   aircraft in flight may reduce         destination, and are less 
                               the                                   risk adverse. 
                               appetite of the leisure traveller 
                               to undertake trips particularly to 
                               certain geographies, 
                               resulting in declining revenues. 
                               Increased incidence of terrorism 
                               impacts consumer confidence and can 
                               shift demand away from 
                               certain destinations. 
         -------------------  ------------------------------------  -------------------------------------  ----------- 
 5        Competition          The risks posed by competition        Execution of roadmap for growth and    Increased 
                               could adversely impact our market     capitalise on our unique market 
                               share and future growth of            position, this 
                               the business, these include:          involves: 
                               -- Supply: competition from direct    -- Targeting new customer 
                               competitors, alternative              acquisition and growing the most 
                               accommodation operators and           profitable customer cohorts (with 
                               disruptive                            focus on CLV/CAC) by optimising 
                               new entrants leading to a loss of     overall marketing investment. 
                               key accommodation                     -- Strengthening the Group's core 
                               suppliers.                            platform in order to improve its 
                               -- Customers: changes in customer     flexibility and the experience 
                               behaviour leading to a loss in        of our customers. 
                               customer traffic and demand           -- Upgrading our third-party 
                               for our services and / or increase    platform connectivity in order to 
                               in customer acquisition costs.        defend our competitive position. 
                               Consumer preferences could            -- Focus on expanding our global 
                               change as a result                    footprint, meeting emerging demand 
                               of the COVID-19 pandemic which may    while also strengthening 
                               be disadvantageous to our business    our overall product offering. 
                               and may benefit existing              -- Leveraging the capabilities of 
                               and new competitors. With global      our partnerships with Goki Pty 
                               travel restrictions, there may be a   Limited and Counter App Limited 
                               shift towards domestic                to ensure we are delivering best in 
                               travel and alternative                class and most advanced tech-based 
                               accommodations.                       solutions for our customers 
                               -- There has been a rise in           and hostel partners. 
                               cancellations and vouchers issued 
                               in lieu of cash refunds for 
                               the Group and with our competitors. 
                               This increases competition for the 
                               Group as it locks customers 
                               into those companies issuing the 
                               credit notes, thereby potentially 
                               reducing the demand for 
                               the Group's offering. 
                               -- Technology and Product: Over 
                               recent years the ever-increasing 
                               pace of change of new technology, 
                               new infrastructure and new software 
                               offerings have changed how 
                               customer's research, purchase 
                               and experience 
                               travel. Notable shift changes 
                               include mobile networks, mobile 
                               applications, meta-search 
                               providers, 
                               display advertising, social 
                               communities etc. 
                               Unless we continue to stay abreast 
                               of technology innovation and 
                               change, we 
                               risk becoming irrelevant to the 
                               modern customer. 
         -------------------  ------------------------------------  -------------------------------------  ----------- 
 6        Search Engine        A large proportion of traffic to      The Group invests heavily in           Unchanged 
           Algorithms          our websites is generated through     recruiting and retaining key 
                               internet search engines               personnel with the requisite skills 
                               such as Google, from non-paid         and capabilities in paid and nonpaid 
                               (organic) searches and through the    search. This in-house expertise is 
                               purchase of travel related            supplemented by the 
                               keywords (paid search).               deployment of leading 
                               We therefore rely significantly on    technology tools. The search 
                               practices such as Search Engine       marketing team works closely with 
                               Optimisation ("SEO")                  Google to understand 
                               and Search Engine Marketing ("SEM")   any changes in functionality to the 
                               to improve our visibility in          AdWords platform so that we can 
                               relevant search results.              avail of any efficiencies 
                               Search engines, including Google,     in our search traffic. The Group 
                               frequently update and change the      participates in alpha and beta 
                               logic that determines the             feature tests that give Hostelworld 
                               placement and display of results of   first mover advantage with new 
                               a user's search, which can            functionality that can help drive 
                               negatively impact placement           efficiency. 
                               of our paid and organic results in 
                               search results. This could result 
                               in a decrease in bookings 
                               and 
                               thus revenue. It could also result 
                               in having to replace free traffic 
                               with paid traffic, which 
                               would negatively impact margins. 
         -------------------  ------------------------------------  -------------------------------------  ----------- 
 7        Brand                Consumer trust in our brand is        We are focused on investing in our     Unchanged 
                               essential to ongoing revenue          core products, platform and 
                               growth. Negative publicity around     technological capabilities 
                               our products or services could        to support our brand proposition as 
                               negatively impact on traveller and    well as actively managing our brand 
                               accommodation provider confidence     portfolio through social media 
                               and result in loss of revenue.        channels. Our customer service team 
                               Negative publicity could impact       strive to ensure that customers 
                               brand perception and consumer         have a positive experience at all 
                               loyalty and ultimately revenue.       stages of interacting with us. The 
                               Our exceptional refund policy for     Group has a Crisis Management Policy 
                               COVID-19 refunds has the potential    in place which includes 
                               to adversely affect our               appropriate escalation. 
                               brand. 
         -------------------  ------------------------------------  -------------------------------------  ----------- 
 8        Data Security        We capture personal data from our     Hostelworld are Level 1 PCI            Increased 
                               customers, including credit card      compliance with the guidelines of 
                               details and retain this               the payment card industry. 
                               on our systems. There is always a     Through 2020 we performed a lot of 
                               risk of a cyber security related      work to comply with certain aspects 
                               attack or disruption, including       of Payment 
                               by criminals, hacktivists or          Services Directive 2 ("PSD2") in 
                               foreign                               2021 as it relates to customer 
                               governments on our systems or those   payment - customer authentication 
                               of third-party suppliers.             security measures. 
                               Cybercrime including unauthorised     Hostelworld works closely with 
                               access to confidential information    internal and external audit 
                               and systems would have significant    functions to ensure that our system 
                               reputational impact                   architectures, work processes and 
                               and could result in financial         policies are in place to provide as 
                               and/or other penalties.               much protection as possible. 
                               The shift to remote working during    We have a privacy compliance 
                               COVID-19 (beginning 12 March 2020)    programme to align with our on-going 
                               changed the risk                      obligations under GDPR and 
                               profile of certain data processing    have invested in our own data 
                               activities and gives rise to          protection resources to monitor 
                               ongoing data security                 compliance including the onboarding 
                               challenges and a widening threat      of bespoke privacy management 
                               landscape more targeted at endpoint   software in mid-2020. Our Data 
                               controls.                             Protection Officer ("DPO") is 
                               As we plan for a level of return of   responsible for informing, advising 
                               colleagues to our offices, the        and monitoring compliance on all 
                               COVID-19 Return to Work               matters relating to the 
                               Protocol (Ireland) and Working        protection of personal data in the 
                               Safely During Coronavirus             Group. We regularly review our 
                               Guidelines (UK) require us to         employee information 
                               capture                               security policy and we continue to 
                               from colleagues and office            invest in information security 
                               visitors, new categories of           training for all staff so 
                               sensitive personal health data that   that they remain vigilant and alert 
                               we would not have obtained before.    to the possibility of cybercrime. 
                               The General Data Protection           We reviewed the impact on servers of 
                               Regulation ("GDPR") places            increased remote access loads with 
                               significant data security and         teams working from 
                               regulatory compliance obligations     home. We issued guidance to 
                               on us when                            all colleagues during COVID-19 
                               processing such data.                 regarding 
                               Third party vendors that we engage    the personal data and data security 
                               with may not have the appropriate     implications of the pandemic and new 
                               Information Security                  remote 
                               controls in place leading to a        working along with enhanced 
                               potential breach of customer data.    procedures 
                               For 2021, Hostelworld plan to         for accessing company data while 
                               migrate parts of the e-commerce       working 
                               platform to the Cloud. Whilst         remotely. 
                               risk is minimal, there still is       We provide data security training 
                               risk that security                    for all staff. 
                               gaps may manifest during the          We perform due diligence of our 
                               migration.                            third-party suppliers who process 
                                                                     our personal data including 
                                                                     heightened information security due 
                                                                     diligence. 
         -------------------  ------------------------------------  -------------------------------------  ----------- 
 9        Regulation           The global nature of our business     Monitor regulatory matters in          Increased 
                               means we are exposed to issues        locations in which we provide 
                               regarding competition, licensing      services with a particular 
                               of local accommodation, language      focus on those areas where we have 
                               usage, web-based trading, consumer    local operations. 
                               compliance, tax, intellectual         Suitable experienced resources have 
                               property, trademarks, data            been engaged to ensure consumer 
                               security and commercial disputes in   compliance 
                               multiple jurisdictions.               requirements, compliance with the 
                               Compliance with new regulations can   Listing Rules, the FRC Corporate 
                               mean incurring unforeseen costs,      Governance Code and the 
                               and noncompliance could               Market Abuse Regulations. 
                               result in penalties and               A detailed analysis of the Group's 
                               reputational damage.                  approach to offering vouchers to 
                               COVID-19 has led to increased focus   certain customers 
                               by consumer rights regulators on      concluded that the Group's approach 
                               the online sales practices            was aligned with the principles 
                               of tourism and travel focused         reflected in the EU 
                               companies and may have an impact on   Commission recommendations on 
                               the Group's brand if the              vouchers for cancelled package 
                               Group's sales practices were          travel and transport services 
                               investigated and assessed to be       published on 13 May 2020. 
                               noncompliant.                         In line with guidance from the Irish 
                               COVID-19 has heightened our           and UK governments, we have 
                               obligations under employment and      developed a robust 
                               health and safety laws to protect     COVID-19 Response Plan including 
                               the safety, health and welfare of     adopting protocols around returning 
                               colleagues in the workplace.          colleagues back to the 
                               GDPR imposes particular compliance    office environment. 
                               obligations with respect to our       Rolled out an effective refund 
                               COVID-19                              management and risk policy and 
                               response measures with risk of        procedure to deal with individual 
                               fines and other enforcement           consumer complaints and those from 
                               mechanisms being imposed by a data    consumer regulators. Our response to 
                               protection authority.                 requests and complaints 
                               Our position on customer refunds      is informed by a cross-departmental 
                               may give rise to customer             risk assessment. 
                               complaints to consumer regulators     The Group have been working with the 
                               such as the Irish Competition and     Central Bank of Ireland to ensure 
                               Consumer Protection Commission or     the group are complaint 
                               UK Competition and Markets            with the PSD2 EU Directive. 
                               Authority who have a range of 
                               enforcement powers including fines. 
                               PSD2 is a new EU Directive that 
                               applies to payment services in the 
                               EU. The deadline for the 
                               Group to incorporate and be 
                               compliant with this Directive was 
                               31 December 2020. 
         -------------------  ------------------------------------  -------------------------------------  ----------- 
 10       Tax                  The taxation of e-commerce            In collaboration with our tax          Increased 
                               businesses is constantly being        advisers, a large professional 
                               evaluated and developed by tax        services firm, we assess possible 
                               authorities                           tax impacts in the jurisdictions in 
                               around the world. There is a risk     which we operate to ensure our tax 
                               relating to the identification of     obligations are aligned 
                               and evaluation of tax                 to the operational nature of our 
                               legislative changes and the           business. 
                               impact of these on the Group.         Transactions and mergers and 
                               Due to the global nature of our       acquisitions work are properly 
                               business, tax authorities in other    documented with support from tax 
                               jurisdictions may consider            advisers. Transfer pricing is 
                               that taxes are due in their           regularly reviewed and updated to 
                               jurisdiction, for example because     reflect Group structure and 
                               the customer is resident in           most recent guidance. 
                               that jurisdiction or the travel 
                               service is 
                               deemed to be supplied in such 
                               jurisdiction. 
                               If those tax authorities take a 
                               different view than the Group as to 
                               the basis on which the 
                               Group is subject to tax, it could 
                               result in the Group having to 
                               account for tax that it currently 
                               does not collect or pay, which 
                               could have a material adverse 
                               effect on the Group's financial 
                               condition and results of operation 
                               if it could not reclaim taxes 
                               already accounted for in 
                               the jurisdictions the Group 
                               considers relevant. Changes to tax 
                               legislation or the interpretation 
                               of tax legislation or changes to 
                               tax laws based on recommendations 
                               made by the OECD in relation 
                               to its Action Plan on Base Erosion 
                               and Profits Shifting ("BEPS") or 
                               national governments may 
                               result in additional material tax 
                               being suffered by the Group. 
                               We are currently monitoring the 
                               introduction of the digital 
                               services taxes, and its impact 
                               on our Group. 
         -------------------  ------------------------------------  -------------------------------------  ----------- 
 11       Business             Failure in our IT systems or those    As an e-commerce organisation, the     Increased 
           Continuity          on which we rely such as third        Group's 
                               party hosted services could           business continuity plan focusses on 
                               disrupt availability of our booking   the continued operation of consumer 
                               engines and payments platforms, or    facing products and 
                               availability of administrative        related services to ensure our 
                               services at our office locations,     e-commerce trading systems can 
                               with an adverse impact to our         continue 
                               customer service.                     to process bookings. Our fully 
                               The outbreak of COVID-19 led to       distributed and redundant 
                               substantial business and              architecture across two data centres 
                               operational disruptions across        based in two different countries 
                               the Group and resulted in             supports this approach. The Group 
                               Hostelworld and our third-party       has 
                               suppliers seeking to suspend or       worked with external advisers to 
                               be excused from certain contractual   produce robust documented business 
                               obligations.                          continuity and disaster 
                                                                     recovery capabilities. We have also 
                                                                     extended our eCommerce Business 
                                                                     Continuity Plan("BCP") 
                                                                     to include our corporate offices. 
                                                                     Across 2021 we will carry out 
                                                                     targeted business continuity testing 
                                                                     by business unit to ensure 
                                                                     our systems and processes are 
                                                                     effective as possible. 
                                                                     As part of COVID-19 BCP invocation 
                                                                     all employees have been working from 
                                                                     home via Hostelworld 
                                                                     secured endpoint devices that were 
                                                                     configured and rolled out in 2020. 
                                                                     All 
                                                                     teams had tested access and 
                                                                     functionality and only small 
                                                                     adjustment was needed to have all 
                                                                     teams operational very quickly. All 
                                                                     laptops are encrypted and protected 
                                                                     with 
                                                                     anti-virus and anti-malware 
                                                                     software. 
                                                                     We updated our standard supplier 
                                                                     terms in early 2020 to provide more 
                                                                     robust and comprehensive 
                                                                     contractual provisions regarding 
                                                                     force majeure (covering epidemics/ 
                                                                     pandemics) and BCP (requiring 
                                                                     suppliers to implement the 
                                                                     provisions of our BCP at any time). 
         -------------------  ------------------------------------  -------------------------------------  ----------- 
 12       People               The Group is dependent on ability     The Group has developed stronger       Increased 
                               to attract, retain and develop        recruitment processes supported by 
                               creative, committed and skilled       effective HR policies 
                               employees so as to achieve its        and people process to enable the 
                               strategic objectives.                 attraction and retention of key 
                               Due to the possibility of a long      talent. 
                               recovery period for the travel        The Group has increased focus on 
                               industry resulting from the           understanding the drivers of 
                               COVID-19 pandemic and the             employee engagement and are 
                               redundancies and restructurings       committed to taking action to 
                               which have taken place within the     improve employee engagement levels. 
                               company, employees may not view       Robust external benchmarking 
                               employment with us as positively as   has ensured there is understanding 
                               they did                              of the competitiveness of the reward 
                               prior to the pandemic. This may       offering and 
                               adversely affect our ability to       additional investment in 2019 and 
                               attract and retain highly             2020 aims to reduce voluntary 
                               skilled employees.                    attrition. 
                                                                     The Group operates from five global 
                                                                     offices, which provides flexibility 
                                                                     for location of key 
                                                                     talent, thereby opening up a larger 
                                                                     talent pool to select from. A move 
                                                                     to increased remote 
                                                                     working would further enhance this. 
                                                                     A non-executive director fulfils a 
                                                                     workforce engagement role as set out 
                                                                     in the 2018 UK Corporate 
                                                                     Governance Code. 
         -------------------  ------------------------------------  -------------------------------------  ----------- 
 13       Brexit               The Group is exposed to               The Group is a global business and     Increased 
                               Brexit-related risks and              continues to grow its international 
                               uncertainties in relation to its      footprint and 
                               continued                             presence across its key markets. 
                               impact on global markets and          Through continued international 
                               currency exchange rate                expansion and 
                               fluctuations. The uncertainties in    diversification, the Group will seek 
                               relation                              to naturally mitigate the impacts of 
                               to the movement of people may         Brexit. However, 
                               result in the reduction of bookings   the Group will continue to assess 
                               particularly into and from            the impacts of Brexit and implement 
                               the UK travel market and from UK      any necessary remediation 
                               nationals which could impact on       steps to mitigate its impact on the 
                               Group revenue. In the year            Group. 
                               ended 31 December 2020, the UK as a   Hostelworld has in place with all 
                               destination represented 6% of total   Group companies, an intra-group data 
                               Group bookings (2019:                 transfer agreement 
                               6%) and 16% of Group bookings were    with EU Commission-approved 
                               from UK nationals (2019: 14%).        Model Clauses, one of the approved 
                               Overall a decline in macroeconomic    data transfer mechanisms under the 
                               conditions                            GDPR - HW UK is a party 
                               in the UK could negatively impact     to this agreement. Hostelworld has 
                               consumer confidence and reduce        also prepared GDPR compliant data 
                               spending in all areas                 protection supplemental 
                               including the wider leisure travel    contract addendums for UK suppliers 
                               sector.                               which will provide appropriate 
                               On 1 January 2021, the UK became a    safeguards and mechanisms 
                               third country for the purposes of     to ensure data transfers to the UK 
                               the GDPR and any transfer             are GDPR compliant. 
                               of personal data to HW UK or a 
                               supplier must now comply with the 
                               data transfer rules in the 
                               GDPR. Failure to comply can lead to 
                               fines from the regulator and a 
                               negative impact on market 
                               reputation. 
         -------------------  ------------------------------------  -------------------------------------  ----------- 
 14       Climate              Climate change and sustainability     Climate change issues may impact       Increased 
           Change and          came into                             travel decisions and travel patterns 
           Sustainability      sharp focus in 2019 and has further   by customers but is 
                               evolved as an area of heightened      mitigated to the extent that our 
                               concern with consumers                business is a global one, with a 
                               and stakeholders in 2020.             dispersed population of 
                               There is a request for more           users, and a geographically 
                               accountability from our customers,    dispersed set of destinations. 
                               employees, other stakeholders         We aim to offset our carbon 
                               as to what the Group is doing to      footprint through a number of 
                               limit its indirect impact on          initiatives. In 2020, we became 
                               climate change.                       a signatory on the Global Tourism 
                                                                     Plastics Initiative led by the UN 
                                                                     Environment programme 
                                                                     and the World Tourism Organisation. 
                                                                     Our goal is to encourage our hostel 
                                                                     partners to sign up 
                                                                     with the aim of reducing their 
                                                                     single use plastics consumption. We 
                                                                     have also taken steps to 
                                                                     reduce our plastic consumption as a 
                                                                     Group. 
                                                                     Prior to COVID-19, we made efforts 
                                                                     to reduce our plastic consumption 
                                                                     through initiatives such 
                                                                     as purchasing reusable water bottles 
                                                                     for the office, ordering fresh fruit 
                                                                     and other perishables 
                                                                     from suppliers who use fully 
                                                                     recyclable packaging. 
         -------------------  ------------------------------------  -------------------------------------  ----------- 
 

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(END) Dow Jones Newswires

March 23, 2021 08:15 ET (12:15 GMT)