A lesser known online travel agency ((OTA)) in comparison to my last article on Booking Holdings (BKNG), hostel-focused Hostelworld (HSWLF) faces numerous challenges that have resulted in its valuation collapsing from ~£400M in 2018 to ~£70M in August 2020. Their strategy to reinvigorate growth; dividend cuts; and present uncertainty in the travel and tourism sector has investors displeased. Yet, a solid balance sheet easing 2020 concerns, favourable sector tailwinds, and a current valuation pricing their new strategy for failure mean Hostelworld provides an alluring prospect against considerable competitive risks.
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