Safestay stock plunges 35% on weak forward bookings

Safestay, a hostel operator, saw its stock plummet by over 35% following the release of its trading update on Friday. The company reported a 21% year-on-year decline in forward bookings, with like-for-like bookings standing at £3.7 million as of September 22, down from £4.7 million in the previous year. This decline is attributed to a weaker consumer environment and the impact of tourist levies in certain markets.

In the first half of fiscal 2026, the company reported revenue of £8.4 million, a drop from £9.4 million in the same period last year. Adjusted EBITDA fell to £0.6 million from £2.1 million year-over-year, and the net asset value per share dropped to 19.96 pence from 47.8 pence, primarily due to impairment, revaluation, and disposal-related movements.

Despite these challenges, Safestay's new operational management team is implementing initiatives across its portfolio, including the addition of 20 beds in Brussels and investments in communal spaces. Recent openings in Naples and Brighton are performing well, but the company continues to face cost pressures, including VAT changes in Europe and higher business rates and employment costs in the U.K. The Board is also considering various strategic options to maximize shareholder value and support the Group's focus on expanding its European footprint through an increasingly asset-light model.

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