Good morning, everyone. My name is Gary Morrison. I'm delighted to host our 2024 interim results this morning. I'm joined by Caroline Sherry, our CFO, and just to note, we will be taking questions at the end of the presentation, but obviously, please feel free to submit those during the presentation, and we will collect and answer those at the end. So, if we turn to the next slide, please. These are the usual disclaimers. I will take these as read. Moving on to highlights and indeed, the following page. So, I'm gonna start today by discussing our financial results in the context of the customer trends that we've seen year-over-year, our social strategy performance, what we've done on OpEx, and then finally, what we have done with our operating cash flow this year.
So, I'm gonna anchor you in the top left-hand corner of EUR 3.7 million net bookings, which is 9% greater than first half 2023, and the first customer trend to highlight is a slight mix shift towards solo travelers. So net bookings from our solo travelers were 13% year-over-year. The mix of total bookings is now 62%, up from 59% in first half 2023. So consequently, total PAX has risen by 6% versus the 9% net bookings. There are more solo travelers, and the net bed nights is a little less than the PAX number, given that solo travelers tend to make slightly shorter length of stay bookings, and indeed, with a shorter lead time. So now coming back to that top left-hand corner, EUR 3.7 million +9%.
The second customer trend we saw was really a strong preference for lower-cost destinations year-over-year. So to illustrate, net bookings from U.K. travelers were up 16%, indeed from all Europeans were up 13%, you know, from a nationality basis, and this is about 60% of our total bookings. So great growth from those core customer markets. But what we saw is these travelers very definitely had a preference for booking lower-cost destinations, especially in Asia. So Asia as a destination actually grew by 39% year-over-year, and given the average bed price of EUR 12 in Asia versus, say, EUR 36 a night in Europe, the combination of the slight shift to solos, plus the, you know, strong preference from lower-cost destinations, has contracted ABV by 10%, H1 2023 versus H1 2024.
So the combination of net bookings and that ABV contraction has obviously impacted net revenue growth, which was at 1% year-over-year. So against that revenue growth, however, I'm delighted to report that the social strategy is continuing to deliver, with marketing as a percent of net revenue for the period at 45%, and that's down from 51% in H1 2023, and it's actually down from 48% in second half 2023. So there's been a continued progression of a reduction as marketing as a percent of net revenue, and indeed, at the 45%, it's at the lower end of the range that we gave in our Capital Markets Day of 45%-55%. So, as you'll know, our social strategy is only available on app, and consequently, this really encourages our customers to use the app as their booking platform.
What we saw period-over-period, 20% growth in bookings on the app, so it's now 45% of our total mix, and indeed, 60% of our overall bookings are now coming through, you know, direct channels. So collectively, despite the 10% drop in ABV giving us a revenue growth of 1%, our net margin actually grew by 23%, half-year-over-half-year, delivering EUR 22 million. So phenomenal growth in net margin driven by that social strategy. So now if I turn to OpEx. OpEx declined from 12.8 to 12.4, -2% year-over-year, and despite the volume increases going through the platform, team did a fantastic job, continuing to make the code more efficient, so our hosting costs actually decreased, which helped us, you know, reduce OpEx by that small amount.
Hence, when we're taking that big growth in net margin over that slightly declining OpEx phase, you know, EBITDA increased from EUR 5.1 million to EUR 9.6 million, which is an 88% increase year-over-year. So, you know, obviously, we're delighted to see that. If you look at the business on a cash basis, that increase in net margin, less the OpEx, delivered EUR 12.4 million in operating cash flow. That operating cash flow, plus the cash on hand at the end of last year of EUR 7.5 million, collectively, that enabled us to fully pay down our residual AIB debt of EUR 10.3 million, which is fully two years ahead of schedule, so obviously very pleased with that, with the saving of attendant interest costs. And we also started to make payments on the Irish Revenue warehoused debt.
We made a down payment of EUR 1.9 million. We still have EUR 7.5 million outstanding and an agreed repayment plan with the Irish Revenue in place. So taking the EUR 5 million cash less the EUR 7.5 million outstanding, gives us a net debt position of EUR 2.6 million. So if we turn to the next page, please. So just to sort of summarize that in terms of key highlights and, you know, what my thoughts are as we go into the second half of the year and indeed into next year. You know, I'm really delighted to see that continued growth in net bookings, 9%. You know, as I've said, it's, you know, far, far greater growth in lower cost destinations. Indeed, Asia was up 39%. It's a record half year for Asia and Central America.
Asia actually, as a destination, is now slightly larger than Europe. Social strategy just continues to deliver. Marketing as a percent of net revenue improved to 45%, and that gave that really stellar net margin growth of 23% year-over-year. We continue to maintain an unbelievably tight rein on costs. So operating costs are actually down 2% despite that volume growth, but of course, that underpinned the adjusted EBITDA growth of 88% to EUR 9.6 million. The business continues to have a highly cash-generative business model. We generated EUR 12.4 million in operating cash flow. The AIB term loan facilities I've just mentioned were fully repaid, you know, two years ahead of schedule. So I think we've got a far, far stronger balance sheet.
In terms of looking what we've achieved and how that powers us into the second half of the year, we will continue to invest in our social network. We're seeing growth in penetration in terms of the percentage of our bookings that are being made by social members and indeed, the usage of the network by those social members. You know, the strategy in terms of implementation powers app booking growth, which is much faster than web. App bookings growth up 20% year-over-year, web 2%. That delivers that wonderful marketing leverage that enables us to fuel future growth. Third point, growing hostel supply. One of the things that we've called out ever since Capital Markets Day is, you know, we intended to slowly increase our market coverage.
It's gone up by 3% half-year-over-half-year from 73%-76%, so good performance there, and we will continue to do that. And I think collectively, based on what we've seen in the first half and what we, you know, believe will happen in the second half, we feel very comfortable reiterating the EBITDA guidance in line with market consensus. So on that note, I will now pass you to Caroline, who will go through our results in a little bit more detail, and then I'll come back and give you some strategy updates. Caroline?
Many thanks, Gary. I'm very pleased to be here this morning to talk to Hostelworld's 2024 interim financial results. So, moving to the next slide, please. Great. So, this slide looks at net bookings by source nationality. This is the nationality of our customer base and where our bookings originated. During the first 6 months of the year, net bookings grew 9% year-over-year. Europe, U.S., Canada and the U.K., these are our biggest regions from a source market perspective and together make up over 80% of our source demand. We can see that demand was particularly strong from our U.K. and European customers. Net bookings made by U.K. customers grew 16% year-over-year, and European customers grew 13% year-over-year. That's a record level of demand amongst our European customers, who account for 42% of our bookings.
U.S. and Canada, both very important source markets of long-haul customers, accounted for 21% of our bookings and saw a growth of 2%, building on what was a very strong performance last year. Interesting as well to see such strong growth in Asia, which is traditionally one of our smaller source markets, seeing such a significant growth rate of 15% year-over-year. Oceania was the only region to contract. We saw less long-haul travel from customers in this region, with these customers opting for more short-haul bookings. And indeed, Oceania source bookings to Asia was up 32%, 37% year-over-year. If we could move to the next slide, please. So, looking now at where those customers traveled to, and we can see from looking at this slide, as Gary has mentioned earlier in the presentation, the dominant performance of lower-cost destinations.
We saw a record number of bookings to Asia. Asia accounted for 30% of H1 bookings, with South Asia growing 40% versus prior year, and North Asia growing 27%. Customers from Europe and U.K. were a significant driver of this Asian performance, with bookings from Europe to Asia up 48% and bookings from the U.K. to Asia up 40%. Central and South America, both low-cost destinations and together accounting for just under 20% of H1 bookings, both saw an increase in demand year-over-year. Indeed, we saw a record number of bookings to Central America, a region that has seen sustained growth since the pandemic and is now 1.7 times bigger than it was in 2019.
Europe, however, still remains our largest source market from both a volume and a value perspective, accounting for just under 40% of bookings by destination. Performance here, not as strong as last year, with customers choosing instead to travel to lower-cost markets. U.S. and Canada, an important source market for us, customers here traveled to Asia, which was up 17%, and Oceania, which was up 14%. And while Oceania was down year-over-year as a source market, we can see that as a destination, it grew by 12%, driven by bookings from customers in the U.K., Europe, America and Canada. All double-digit growth year-over-year. Now, moving to the next slide. We can see how that booking performance played out in revenue. Generated revenue, being gross revenue, less cancellations, was down 2% year-over-year.
We saw revenue growth across all low-cost destinations, particularly so in Asia and Oceania, and we saw the higher bed price destinations of Europe, U.S., and Canada contract in the first six months. This shift in consumer demand for low-cost destinations resulted in average booking value contracting by 10% from EUR 15.15 in H1 2023 to EUR 13.60 in H1 2024. Of this 10% contraction, 6% was due to geographic mix, and as we can see from the chart, the average bed price in South Asia is a quarter of that of Europe. As Gary made the point at the outset, we saw this in the first six months, consumers opting for lower-cost destination, destinations where their money will go further.
The contraction in ABV was also driven by an increase in solos and in shorter length of stay bookings, again, as Gary mentioned at the outset. Bed prices year-over-year were flat. Moving to the next slide, please. Looking here now at how performance translated into net margin. So looking to the left, we saw that in H1 2023, we generated EUR 17.9 million of net margin. Since H1 2023, we've seen a surge in demand to low-cost destinations in particular, and this performance delivered EUR 2.4 million in margin. But another significant driver of margin growth was the efficiency of our marketing spend, driven by our app-centric social strategy. Marketing as a percentage of revenue, which is all paid marketing costs over revenue, less cancellations, reduced from 51% in H1 2023 to 45% in H1 2024.
As you may recall, we've guided marketing investment at less than 50% on a full year basis. So we feel that we are well on track to deliver against that target. Our social strategy has been very effective in generating marketing spend efficiency by driving new and existing customers to our Hostelworld app. This results in a greater mix of low-cost bookings and margin uplift, which Gary will talk to in more detail later. Other, of EUR 1.8 million, is principally deferred revenue, a provision movement which accounts for free cancellation bookings. EUR 3 million of a drag from average booking value, as discussed in the previous slide, ABV contracted 10% year-over-year. These components combined delivered a margin of EUR 22.1 million, a 23% growth year-over-year. Moving to the next slide, please. Now we're looking at our operating cost base.
These are costs excluding brand marketing, and this slide looks at the evolution of our cost base over the past three years: H1 2022, H1 2023, and H1 2024. H1 2024 operating costs were EUR 12.5 million, down 2% versus H1 2023. And starting from the bottom up, the orange block is wages and salaries. Our headcount in June was at 227, a similar level to June 2023. We have, however, managed the impact of wage inflation through the utilization of lower-cost temporary contractor resources. Contractor costs, the pink block, is up marginally year-over-year. We have utilized these specialist resources to support the ongoing work on our social platform, enhancing the hostel-facing experience through improving sign-up and onboard processes, and our LinkUps product. The yellow block, which is in-house tech investment, has reduced.
We continue to harness the efficiency of our cloud-hosted platform and modernized tech stack. And finally, the green block, which is made up of all other operating costs. We've managed to keep this cost base flat year-over-year, managing our cost base tightly, and it has in fact halved versus H1 2022. Moving to the next slide, please. So taking it all together, starting from the left, we made a profit of EUR 5.1 million in H1 2023. The benefit of 9% booking volume growth gave a EUR 2.4 million uplift. Lower marketing percentage delivered another EUR 3.1 million incremental margin. Deferred revenue benefit of EUR 1.8 million, again, the timing of free cancellation balance sheet provision movement, and a lower operating cost, down 2% year-over-year, as covered off in the previous slide, delivered EUR 0.3 million of a benefit.
ABV was a headwind, contracting 10% year-over-year, again, predominantly geo mix driven, due to the surge in demand to lower-cost destinations and an increase in solo travelers. From an EBITDA perspective, we delivered a profit of EUR 9.6 million, growing 88% versus H1 2023, and an EBITDA margin of 21% is up 11% versus H1 2023. And again, as Gary Morrison mentioned at the outset, we feel comfortable that we are on track versus our full year guidance of circa 20% EBITDA margin and our market consensus of EBITDA EUR 21.4 million. Moving to the next slide, please. Now, to look at balance sheet, and looking at our performance from a cash perspective. So, we started the year, as Gary mentioned, with cash of EUR 7.5 million. We recognized EUR 46.4 million in booking revenue.
Offsetting this are our direct costs of EUR 24.3 million and operating costs of EUR 12.5 million. We capitalized EUR 2.4 million of development labor costs, and combined with the EUR 3 million positive working capital, gets you to EUR 9.8 million in operating and investing cash flows. We prioritized our operating cash towards refinancing our balance sheet, repaying in full the EUR 10 million debt facility we agreed with AIB in May 2023, and repaying that facility in full 2 years ahead of schedule. As we discussed at prelims, the remaining EUR 2 million balance on the RCF was repaid in February 2024. We have also commenced payment of the warehoused payroll taxes to Irish Revenue.
We owed EUR 9.4 million at the start of the year and paid an initial deposit of EUR 1.5 million in May, with monthly repayments of EUR 0.2 million thereafter. This delivered a closing cash position of EUR 5 million. An adjusted free cash flow of EUR 9.9 million on an EBITDA of EUR 9.6 million, delivered a cash conversion of 103%. Moving to the next slide, please. So this slide looks at our capital allocation. The business is asset light, and as we saw in the previous slide, it generates significant cash flow. In the first half of this year, we executed against a number of our key objectives for 2024. We fully repaid our debt with AIB.
We commenced payment of the EUR 9.4 million warehoused payroll taxes to Irish Revenue, and net debt has reduced from EUR 12.3 million in December 2023 to EUR 2.5 million at the end of June. For the remainder of the year, our objectives will continue to be: to continue repaying the warehouse taxes we owe to Irish Revenue, 0% interest accruing on this facility. We will continue to grow our business, delivering against our growth ambitions, more of which Gary will address later on in the presentation, and we will return the business to net cash in H2 of this year. And moving to the next slide, please. The last topic in my section is that of ESG.
Our biggest achievement in the first 6 months of this year has been the launch of our Staircase to Sustainability framework, which we launched in February and spoke about at prelims. This bespoke sustainability framework, the first of its kind, designed specifically for the hostel category, which adheres to the Global Sustainable Tourism Council standards, has seen a fantastic response since we launched it. We have over 1,800 hostels displaying the sustainability badge on our platform, and another 250 hostels currently undergoing the sustainability assessment process. In addition to highlighting the sustainability efforts of hostels, we continue to showcase the inclusive nature of the category, using our social channels to share the many hostels where sustainability, diversity, equality, and inclusion is celebrated.
Here in Hostelworld, we take responsibility for our own sustainability practices, and for the past three years, Hostelworld has been awarded the Funding Climate Action label in partnership with South Pole, recognizing the work we do on our own scope one and scope two carbon emissions. We ourselves work to build a strong culture embedded in DE&I principles, for which we have recently been nominated for a Business & Finance Diversity in Tech Awards. Now I'll hand back to Gary to speak to our strategy in more detail.
Thank you very much, Caroline. So, in essence, we continue to make investments in our social platform. You know, as you will have seen, ever since we launched the social platform, it's been a remarkable differentiator, growing, you know, our new customers, new net bookings, revenue, and we continue to invest in it. And typically, we like to look at it in three ways: There's the Profiles on the left, what we do on the chat messaging platform in the middle, and the LinkUps platform, which is on the right, which is for hostels to use our platform to publish their events to all users in a city. So if I start with Profiles, and this is just a selection of some of the things that we've launched in the first half.
You'll see it says, "I want to hang out with people." So we added the ability to use your instant messaging status. Typically, this might say, you're on, you're off, you're sleeping. But we've leveraged that to create a different, sort of state, which is, "I want to hang out with people." So very simply, on your profile, you can indicate you would like to hang out with other people. And then at the bottom of it, you can see it says, "Raoul's Instagram." So we've now added the ability for a user, when they complete the social sign-on process and create their profile, that they can also pull in 10 photographs from their Instagram.
Instagram, as we all know, is like your own personal blog, and it's a wonderful way for our customers to be able to showcase a little bit more about their personalities, but without actually requiring them to, you know, add or, you know, upload new photographs. They can simply leverage, you know, the top 10 photographs that they love themselves. Turning to the middle, what we've been doing on chat. You know, as the network has grown, you know, we are seeing many of these chat rooms having several thousand users a day. And this actually presents a couple of opportunities and challenges. The first is, with so many users, how do we help people find the content that they want to see or to find other people or find things to do?
And the second thing is, of course, once you have found a group that you want to do something with, how do you maintain a chat with just that group? And what you see on the slide is a new feature, which is, so that you can create your own chat group on our platform... and this is the same kind of idea that you would see on, you know, WhatsApp, Telegram, so on and so forth. And you can, you know, add more and more over time, but it just allows you to have a singular, chat group on our platform. Turning to the right, as you'll see later on in the presentation, we are delighted with the uptake of this platform on the hostel side.
More and more hostels are loading inventory in the platform, which means more and more of our customers can see things to do, which really represents additional opportunities to find people to hang out with. As a consequence, you know, our hostels are very vocal in giving us feedback about what they would like to see on the platform, and in particular, they wanted the ability to add many more photos of their own, and enhance descriptions, you know, things that we have delivered for them. Turning to the next page. You know, you'll recall the core mission is to help travelers find people to hang out with.
And indeed, in the back end, we do track responses to private messages, private message being a one-to-one message between two individuals, and also, what I would call open messages, where an open message is a message that's sent to the chat room. And, you know, we're really delighted to see the response rate for both of those to go up over time. And what we're also seeing is that users are starting to post specific chats in other social networks that they have had on our platform as indications that they have found people to hang out with. And if you look at the one on the right, for example, Mitch has posted a little excerpt of his chat, actually on his Instagram, and basically, he posted in, quite recently posted on our network: "Hi, all."
A couple of us are thinking of going to Plaża Ježinac beach tomorrow. Speaker, as in loudspeaker, few drinks, dive into the water. You know, drop me a message if you're interested. Three people replied, but obviously, there was a lot more that went because counting there, there were eight of them. So, you know, we take great comfort and indeed joy on delivering our mission, helping travelers find other people to hang out with and having great fun in the process. So turning to the next slide, this is one that I've mentioned two or three times, but it, you know, indeed, I want to call it out again, which is the social members also become super powerful brand advocates for us.
You know, I think more generally, what we've seen is that the more that the social members are using the platform to create these experiences, similar to the one that I just outlined on the prior slide, we're seeing posts across all the major social networks, whether it's Twitter or TikTok or Instagram, or in Apple or Google Play stores, or in reputation review aggregators like Trustpilot. And I think, you know, in summary, this is just great word-of-mouth for us. You know, it reinforces the brand to new customer prospects, and that, you know, if you book with Hostelworld, your hosteling trip, you know, you will find people that you want to hang out with. So turning to the next slide. So looking at a, you know, more social KPIs, there are many KPIs that we track.
One is the number of active chat users, the second, messages sent on the social network, and then third, percentage of social members who can see LinkUps on trip. You know, I'm pleased to report consistent strong growth in active chat users and actually an increasing volume of posts per chat user, so each chat user is making slightly more posts. Now, I'd just add, you could be forgiven for thinking that there is a bit of a slowdown when you look at H2 2023 going into H1 2024. Actually, that's because we exceeded the chat room capacity of our vendor, who helps us, you know, build this particular feature and deliver it. You know, their scope of their product was such that it could only handle a few thousand users in chat room per day.
We're now comfortably exceeding that, so the vendor has now reworked their platform, so even more people can use it. So we do expect in H2 2024 for that number to increase considerably. In terms of LinkUps, as I just mentioned before, we're now quoting what percentage of our social members who can see LinkUps in trip, not just at least one, but at least three, so giving some sense of the variety. And we're seeing really great growth, H1 2023 compared to H2 2022. It just continues to grow. So moving to the next slide. So we often talk about the strategy continuing to attract and retain high-value customers, and we look at this on a very regular basis.
If I start from the left-hand side, you know, as we've mentioned before, social members in terms of penetration now account for 80% of all of the bookings on our platform. But crucially, what we also see is that new social members make slightly over two times the bookings compared to non-members over the first 91 days post-acquisition, and that they're three times more likely to make these bookings on the app. These specific variations in booking behavior, both the frequency and the propensity to use the app, have remained pretty much constant since launch in 2022 and indeed, as the penetration rate has increased. It just goes to say that the social strategy is continuing to deliver that great growth in new customers, but also...
On a greater proportion of app bookings, and you can see that really well from the next slide. So looking on the left-hand side, you know, the social strategy has not only given us that meaningful differentiator and those higher value customers, but the app-only implementation of that strategy has accelerated bookings growth on app. It's up 20% year-over-year. It's now 45% of the total versus 2% on web. But when you look across all of our direct channels, free direct channels, it's now about 60%. And this has served, looking on the right-hand side, to reduce our marketing expenses as a percentage of net revenue over time. Started out at 60% in H1 2022, and it's continued to contract or decline.
H1 2024, it's now 45%, which is, you know, at the low end of our Capital Markets Day low range. I would just note that we will always go for top-line growth where we see long-term, profitable, new customer acquisition opportunities. So, it could go up a couple of percentage points, but if it does, then it's because we see opportunities to grow our top line a little bit faster. But obviously, that consistent reduction over time, you know, bodes extremely well and provides the proof points that the social strategy is delivering over an extended period of time. So moving to the next slide and sort of translating what we've just seen in terms of revenue, recurring revenue, and a cohort view of the world. So, I'll perhaps start by just explaining the chart for those who haven't seen it before.
If you look at 2017, that is our revenue in the first half of 2017, and the pink bar represents the revenue that we generated from new customers acquired in the first half, and the bars underneath it represent the revenue generated from customers that we acquired before first half in 2017. So turning to the pink bar, as those customers come back in 2018, 2019, you can see their contribution in the pink bar. So now turning to 2023 and looking at 2024. So the first point to note is that revenue retention year-over-year is the combination of customer retention rate, how many customers come back, their booking frequency, how much did they buy, and of course, ABV movements, you know, what did they buy?
So looking at actuals, which is 2024, with a -10% ABV year-over-year, you can see that even with that, contraction, we can see growing revenue retention despite that year-over-year decline. And that really bears testament to the growth in customer retention and increased booking frequencies and the power of social strategy. And to demonstrate that more clearly, I've added another column on the far right-hand side to show exactly how much that customer retention and booking frequency alone is worth by using a flat ABV by comparison. So you can see there's the power of the social strategy. So turning to the next slide. So finally, turning to the AGM guidance. We expect to maintain high single-digit growth rate in net bookings.
I think revenue growth is going to be lower, as we've signaled, driven by the ABV contraction, which again, is mostly driven by our customers' preference for lower-cost destinations, especially in Asia. We also expect that our social strategy will continue to deliver favorable marketing as a percent of net revenue, noting that this could be greater than the first half of 2024 at 45% if there are opportunities to invest in new customer growth profitably. But if we couple these trends with unbelievably tight control of OpEx, yeah, we feel very comfortable that the adjusted EBITDA performance of the business will be aligned with market consensus. Turning to our final slide. In the meantime, we will be continuing to execute on our strategy. You know, in particular, we will continue to invest in that uniquely differentiated social platform.
You know, we see it, and I think we've demonstrated over the last five half years since we launched it, which was April 2022, it strengthens our growing competitive moat, and it drives continued share gains and very, very profitably. In parallel, we will always continue to optimize our marketing mix. We will continue to work on platform conversion and develop low-cost acquisition channels. You know, if you could sort of think about this more as the OTA side of the equation, and the reason, of course, that we do this is it increases our marketing leverage period-over-period, and that gives us the oxygen to be able to fuel new customer acquisition growth in the future, which then multiplied by the revenue retention rates in the cohort analysis, you can see that that drives compounding revenue growth.
And finally, from a sort of a platform perspective, that OpEx gain, or rather the OpEx reduction, small reduction that we quoted half year over half year, good chunk of that is being driven by migration of our platform to that cloud-native Gemini and AI-enabled architecture. You know this because it's far more efficient in terms of its memory usage, its processing usage, helps us reduce hosting costs. And indeed, it accelerates innovation because we can access many more of these cloud-native services from our platform provider, and ultimately it will continue to lead to higher operating leverage.
So I want to thank you all for joining us today. You know, we're very, very excited about the business. We're super happy with our performance first half today, and we're looking forward to seeing how the rest of summer develops. Coming into year-end, I think we have a great strategy that's just continuing to deliver. On that note, I would be delighted to take any questions. Thank you very much. David?
Thank you, Gary. Good morning, everybody. I'm David Brady, Head of Commercial Finance here at Hostelworld. We thank you very much for the questions that you've submitted throughout the presentation. We'll take the opportunity now to put as many of those to Gary and Caroline as we can at the time that we have, and if there are any questions that we don't get to in the time that we have, we'll do our very best to follow up with you over the coming days.
I think, Gary, might turn to you on our first question, very topical one. A lot of questions coming in about our views on the recent news flow in the industry of slowing growth in the U.S. So, you know, our view of that and you know, how it's impacted our first half results, and then your thoughts on outlook there. And then also a lot of questions about demand into and demand from Europe, one of our key markets as well. So you might comment on those two markets for us, please.
Okay. Thank you, David. I'll start with Europe, if I may. So what we have seen first half over first half last year is the bookings that are being made by our U.K. customers are up 16% year-over-year. The bookings that are made by our European customers are up 13%. So, in terms of European and U.K. travelers, the demand for travel for hostels is extraordinarily robust. What we have seen, though, is that that demand has very definitely been, you know, a preference for lower-cost destinations. You know, Asia is up 39% year-over-year, and, you know, as we talked about in the presentation, if you look at the bed prices in Asia, on average, they are about EUR 12 a night. That compares with an average of EUR 36 a night.
I think when we look at our cohort of travelers, 18- to 35-year-olds, or more specifically, 18- to 25-year-olds, 62% of those are solo travelers. In general, these, these travelers do not have mortgages, y ou know, they do not have families to support. So, for them, it's really, you know, "I still want to travel, I have budget to travel, but how do I maximize it?" And I think in that context, you know, the, the performance clearly shows that the demand is very strongly there, but they're, you know, wanting to go to Asia because they can stretch that out for a much longer time. In relation to the U.S., the U.S. as a destination, as Caroline pointed out, is only 2% of our bookings.
It is EUR 46 a night, so it's definitely the, you know, the highest price point. Having said that, North America, U.S., and Canada, bookings from those nationalities are about 20%. And again, consistent with what we've seen in Europe, there's been a very definite shift, whereas more of those bookings would've gone to Europe, last year, last first half year. This year, they kind of bypassed Europe, and they've gone to Asia. You know, so the net of it is, you know, very, very strong growth in lower-cost destinations. You know, Europe to Europe is very modest growth, and actually, U.K. to Europe, has been slightly negative this year, where, you know, customers have decided to go to lower-cost destinations.
So I think the more important thing to think about, though, is given that there's been that contraction because of the destination mix shift, you know, the important thing is to then look at net margin. So the social strategy, you know, which we launched in April 2022, has just continued to deliver. Second half last year, marketing's percent of net revenue, 48%. This year, it's now—t his half year, it's now 45%. So even with the contraction due to destination shift, net margin has gone up by 23%, you know, which is, you know, a stellar performance, and we're super happy with that.
Well, thank you, Gary. Next question then is there's quite a lot of interest around how we broke out our performance by geographic vertical, and you might explain, you might explain to people how to think about our marketing costs and our strategy then, by geography and, particularly then how that plays out on revenue and cost performance that people will see in the second half of the year.
Okay. So the first most important thing, we are a global platform. So, you know, our job is to serve travelers wherever they are or wherever they want to go. And I think what we see from an economics perspective is, the first point to make is we have no fixed marketing costs that we need to amortize. All of our marketing costs are variable, and what we see is that if customers are going to lower-price destinations, those marketing costs flex with bed price, so they actually move with destination revenue. So, as a consequence, you know, if revenue growth, whatever it happens to be, this half year it's 1%, then what happens is our marketing will automatically flex, our paid marketing will automatically flex with that change.
And then you have the social strategy, which overlays it, which brings marketing costs down, which is a global phenomenon. In terms of the way to think about, you know, stimulating demand, really, that's all about making sure that we have the right competitive supply. In that regard, you know, you'll have seen from the statement that our market coverage, which is, you know, the hostels that we have on our platform, sort of multiplied by where demand actually is, has moved up from 73%-76%. That coverage, we have mostly new hostels on our platform. Slightly more, I would say, supply that's been made available in Asia, but we've seen that market coverage increase everywhere.
So the next question might turn, if that's okay, to the area of, the product pipeline and specifically the kind of developments and enhancements, that you're planning to the social features and social platform what people will see there in, the rest of the year. Do any of those, address monetization opportunities? Is there any big ramp-up necessary in CapEx, to deliver that, and any early learnings that we're incorporating from our experiences with AI?
So I'm gonna take the second piece of that first, which is monetization. And what, what we have said and will continue to say is the best way of monetizing social is to continue to grow volume. You know, the more that we grow volume, the more that we consistently grow share, that is the way to monetize it. We don't want to, put too much friction into the product by trying to monetize social in some way too early. We've maintained that strategy throughout, and we'll, you know, continue to do so, mindful that, you know, at a certain point in time, we will think about, you know, other ways that we can monetize above. That would be the first point. In terms of strengthening the social platform, it's always a work in progress.
We are building something which doesn't exist in the travel industry, so we're always learning about how our travelers are using the platform. Essentially, we look at it in terms of three pieces: what we do on Profiles, what we do in our chat, sort of Slack messaging platform, and LinkUps, and I'll probably just talk about the first two. So in terms of Profiles, we have continued to increase the amount of information that we ask users to tell us about themselves, but we've also tried to think about, well, how can we make it easier?
You know, one of the things that we've done in the first half, among many things, is to simply allow users to integrate their Instagram handle, so that they can automatically pick 10 photographs, probably the 10 photographs that they most like, and be able to integrate those into our platform. So, it provides a much, you know, richer profile. Indeed, in the second half, we're, you know, we're gonna continue to work on that, what I would call the social onboarding process.
Now, in relation to the third question, which is around AI, one of the things that I talked about is, you know, eventually we'll get to a point where we can ask, like a Gemini, ChatGPT, "Go and look at those 10 photographs and write me a bullet point summary of what that customer is interested in." You know, then we can present that to the user and say, "Thank you for loading your 10 photos. Here's, you know, a little, AI-generated summary. Would you like to edit it?" So, it's all the while thinking about getting more relevant information and making that much easier. In relation to the chat room, I think there's a couple of things. We are now operating, you know, literally thousands and thousands and thousands of bespoke chat rooms every single day. One for every property, one for every city.
There are people joining those chat rooms every day as they make bookings with us, and obviously, three days after check-out, they would leave and probably join another chat room in their next destination. But what we find is, you know, in an environment where there are thousands and thousands of people in these chat rooms, some people want to have a smaller chat of people who have decided that they are going to go to a particular venue in the evening. And the other thing is around chat discovery, which is making it easier for people, you know, to find information on the platform.
So in relation to the first thing, we've launched a group chat feature, very similar to what you would find on WhatsApp, Telegram, where you can organize a subgroup, you know, with an admin. You know, that's already launched. We're seeing that being used. And then on the chat discovery, that's something that we'll be working on in the second half of this year.
Thanks, Gary. For the next question, we'll turn to the supply side. That's okay. A lot of questions and a lot of interest around the 3 percentage point improvement in our market coverage that you highlighted in the presentation. What would you and the team put that down to, the kind of actions that helped drive that, and what more can we expect on the supply side? Is there scope for that to increase in the coming half year and years ahead?
I think it's probably three things. One is, you know, the hostel industry, you know, continue to see huge value from our customers. You know, in general, our customers are the ones who really understand the hosting experience. You know, when they show up, they're the ones who are very sociable. They go to the bar, they consume food and beverage, they understand the experience, they, you know, they write great reviews, they have slightly longer lengths of stay. You know, so as a consequence, you know, we have and continue to give them the best customers. I think the second one, which is more of a product thing, is working to make it even easier to sign up to our platform. You know, we're never going to drop the requirements in terms of inspecting licenses and so on, so, you know, we're sure that people have the requisite license to operate.
But what we can do is to make the whole sign-up process a lot easier in terms of getting the photos, the descriptions, and reducing that cycle time. And I think the third thing, obviously, you know, now you can pretty much travel anywhere. Our supply side team has ramped up the conferences that we hold in every single region, sending people out into the field, you know, to selling the Hostelworld message and the great customers that we can provide, you know, webinars and so on and so forth. So, it's really three things that are driving it, and those are the same three things that we will continue, you know, to go after second half this year into next year and the year beyond. It's a, you know, process that never stops.
Thanks, Gary. For the next question, we'll turn to performance and social network, and there's been more growth in number of active users, in proportion of bookings coming from social members. Again, what would you put that down to, and how, how would you have people think about the outlook for those metrics in the second half of the year and years ahead? Is there scope for that to increase further and how we might deliver that?
So I think a couple of things. The, you know, I suppose the headline metric is the proportion of bookings made by social members. So from a standing start of zero in the first half of 2022, we're now up to 80%. Now, is that going to continue to climb? It may. It, you know, maybe it'll go from 80%- 85%. There's always going to be a proportion of people, you know, perhaps larger groups, who use the platform because we have great inventory, you know, availability and rates, and consequently, they don't sign up to the social network. So, is there a little bit more headroom? You know, potentially.
I think the key thing for, investors, if I may, to get, you know, super excited about, is even with the proportion of bookings made by social members getting up to 80% now, the economics of a social member versus a non-social member that we've been talking about every time that, you know, we've updated on results, has remained remarkably consistent. If you look at a new customer joining our platform, if they sign up to social, they have to opt in, it's not opt out. They, on average, over the first 91 days, relative to a non-social member, they're still making twice the number of bookings, and they're three times as more likely to use the app. And then that obviously plays out in the retention curves that, I talked about earlier.
Thanks, Gary. Caroline, I might turn to you with the next question, and it's a continuation of the discussion on social. Clearly, as social is growing and becoming a more important part of the business, something that's very important to us then is our role as a responsible regulator of the platform. You might talk to people a little bit about how we think about that, and particularly mechanisms that we have in place to help identify and remove any inappropriate content.
Yeah, great question, and one that's very relevant for us. So we use an established third party called Sendbird to ensure that our customer safety is at the core of everything we do, and this tool is run in the background, monitoring the chat in the social features. So we have robust monitoring processes in place, and we also are fully compliant with the recent Digital Services Act, which was enacted in February of this year, and the relevant legislation applying to us here in Hostelworld. This promotes transparency and accountability online. So in addition to using the Sendbird chat monitoring tool, we also use AI. So, we use Google tools to monitor the images that are uploaded into the chat to ensure that they are appropriate.
This is a space that's ever-evolving, so we continue to work with Sendbird on utilizing their enhanced tool. Working with them, they're also merging AI automation into the tool that they have, and again, constantly looking to raise the bar of trust and safety for our toolkit online. In saying that, if anything is flagged, our customer service support team are there to manage and any reported users or messages, make sure that there's no inappropriate content being posted, there's no abuse to customers. Customers can report another customer or flag a message that they deem inappropriate, and that is dealt with by the customer service team. They take immediate action to investigate, and they take action that's appropriate.
But what I would say is, typically, what we see in the channel, it's a very safe and appropriate audience. People who have booked with us, they are the ones who opt into the channel. They have— You have to make a booking to be in the chat forum. And so typically what we see is a very engaging forum, very positive, sharing lots of local tips, hints, and making positive connections online.
Thanks, Caroline. Might stick with you for our next question, please, Caroline, and that's around other operating costs. In the presentation, obviously, we noted that another strong performance there costs down -2%. But within that, there was an increase in contractor costs. So maybe it might be useful just to go through what was driving some of the ups and downs and puts and takes within other operating costs.
Yes. So other operating costs are essentially all of our operating costs except for paid marketing. And within that cost bucket, it was EUR 12.5 million in H1 2024, and down 2% versus the equivalent period last year. And the biggest cost component is that of wages and salaries. So like all businesses, we're facing wage inflation, something that we have managed and managed to actually reduce our wages and salaries bill year-over-year, despite having a similar level of headcount. And what we've done here is two things, really. So one, looking to find the best talent in lower-cost destinations.
So, looking beyond maybe our core markets where we've hired previously, and utilizing a combination of permanent resources, but also temporary contractors, to support and execute the business, product, and technical enhancements that we've delivered in the first half of the year. So a combination really of hiring lower cost destinations, but also utilizing temporary contractors. The combination of which means when you take temporary contractor costs and wages and salaries together, and you look half-year-over-half-year, the cost is actually pretty much flat, despite the fact now that we have a lot more resources, more resources, I should say, because we have been able to take that budget and then repurpose it towards temporary contractors.
Thanks, Caroline, and thank you to everybody on the call for the questions. Our last question was certainly one of the most popular topics that was covered, and maybe it's a question to put to both of you, and I'll frame it in two parts. It's around our thinking on capital allocation and our priorities there. A lot of questions around our short-term capital allocation priorities, particularly what we mean by continued investment in the business. Is that increased marketing spend? Is that in further spending on product improvements or a mix of both? And then also a lot of questions on our longer-term capital priorities and our strategy for shareholders there. Are we thinking about returns? Are we thinking about inorganic opportunities, particularly as the business now is on track to move into a net cash position?
Maybe I should maybe take the first part. So continuing the investment in the business, I mean, ultimately, the goal is to maintain a steady and consistent growth in net margin. You know, ultimately, that's what we're in the business to do. So that is achieved really through incremental product investments. We talked about a lot of them today in terms of things that we are doing on the social side. There's also things we do on the core booking platform. There are things that we do in the base platform, you know, that, which is hosted within our cloud provider.
So really, what we try and do is to make sure that the incremental investments that we put on the product and the platform, they give us a bit more oxygen in terms of conversion growth, a bit more bookings through app, and then we can look at taking some of that and sequentially investing that in new customer growth, where we see that the economics of that new customer growth are very favorable. And the combination of those two things, is basically the way that we satisfy and hopefully satisfy our investors, that we will consistently grow net margin.
Yeah, and I think in terms of the balance sheet, we're really pleased with what we've delivered in the first half of the year. We're well on track for the commitments that we set out at the start of the year. We've repaid the AIB debt facility two years ahead of schedule. We've commenced repayment of the outstanding payroll taxes to the Irish Revenue. We're continuing to invest in the business, as Gary has discussed, and we are well on course to being net cash positive in the second half of this year. I think investment in the business is one that Gary and I are particularly excited about, and we see a lot of, t here's plenty of runway for us continuing to enhance what we are already building.
We can see the level of return that that investment is having and what that's generating for shareholders. So first half of the year, despite an ABV, essentially a price contraction of 10%, we've managed through the enhancements we've made to social, the type of customers we're acquiring to reduce our marketing investment, resulting in a 23% margin growth. Combining that then with the tight OpEx base, delivering an 88% EBITDA growth. So I think that strategy is something we're very pleased and something we're going to continue to focus on.
Thank you, Caroline. Thank you, Gary. We're right up against the hour now, so that concludes the Q&A. Thank you to everybody for joining the presentation. Thank you for the questions. If there's any points that we didn't cover off there, we'll do our very best to follow up with people in due course over the coming days. But with the conclusion of the Q&A, I'll just hand back to Gary just for a closing remark to wrap up the call.
Great. So thank you for joining us today. You know, as I said at the end of the presentation, you know, we're super happy with the results. You know, we're in the business of serving our travelers, you know, wherever they are and wherever they want to go. You know, the things that we're really focused on is making sure that the social strategy continues to deliver and drives that net margin growth. You know, that in turn over, you know, super tight, super tight, control of OpEx and a very cash-generative business gives us lots of options for the future. You know, we're excited about the second half, and we're excited about the growth opportunities that we see going into 2025. So thank you for your continued support and look forward to meeting some of you in person in the coming days.