Shares in AIM-listed hostel operator Safestay (LON:SSTY) climbed by 7.85% to 16.18p (as of 13:00 BST) after the company reported that revenues rose by 26% during the year ended 31st December. Occupancy rates improved over the period and average bed rates were up by 5.3% year-on-year. Management have been managing costs during the COVID lockdown and are preparing for a staggered reopening.
CEO Larry Lipman commented: “2019 was a transformational year for Safestay. We added 7 new hostels increasing our number of sites to 20 making us a leading premium hostel operator in Europe. Our financial performance reflected this expansion with revenues up 26% and while we also made a good start to trading in 2020, the sudden spread of COVID-19 has meant we have had to adapt quickly to an unexpected phase.
We secured the financial stability of the business and we are now working on our plans to re-open our hostels on a staggered basis, over the course of 2020, as and when we believe they can be profitable. Our focus is on ensuring the safety of our guests, initially targeting the domestic markets in each country, and then looking to gradually return to normal trading patterns.
Navigating the re-engagement of the business will require us to be highly flexible as we test and match demand in individual markets, however, we are confident of being able to do this and making sure that we balance increased operational cost with increased income. From an industry perspective, the hostel market is highly fragmented with a large number of small operators who are under pressure as a result of the pandemic and this may well create unique opportunities for Safestay“.