Welcome, everybody. Thank you for joining us to talk about our 2023 preliminary results. I'm joined here today with Caroline Cherry, our CFO, and we've got a really exciting document to go through this morning. Turning to the next slide, which is the normal disclaimers, I'm going to take those as read. We will now move through into highlights and look at the financial summary numbers. Starting on the top left-hand corner, our net GMV was up 32% year-over-year. Very, very strong growth. We earned roughly 15% commission rate on that EUR 619 million, which leads to a net revenue of EUR 93.3 million. You'll see that the net revenue is actually up 34% versus the GMV at 32%.
That's because we have a few advertising products called Featured Listings, which has just nudged that up a little shade. We earned that revenue across 6.5 million bookings. You'll further note that net bookings is up 37% year-over-year versus revenue at +34%. The delta there is obviously a slight contraction on ABV. There's really three things that are impacting ABV year-over-year. The first is there was significant bed price inflation again, but that was actually offset by a huge increase in our Asia bookings, which year-over-year are about 2.5 times. Destination Asia is probably one of the lowest bed price per night in our portfolio. And then there's other small offsets.
If you look at net bed nights, as an example, that's only up 30% versus net bookings at 37. And indeed, we've seen our business tilt slightly more solo travelers year over year at a very small change in the number of bed nights booked per pax per booking. In terms of our business model, you'll all be familiar with our social strategy. Our marketing as a percent of net revenue in 2023 was 15%... 50%. And this contrasts very favorably with FY 2022 at 58%. And indeed, through the year, in the first half, it was 51% and continued to contract into the second half, where it's 48%, really demonstrating the power of our social strategy. Turning to EBITDA.
EBITDA for the full year was EUR 18.4 million, which obviously compares very favorably to the guidance given of EUR 17.5 million-18 million. Moreover, the EBITDA has also been flattered by the fact that our operating costs as a percentage of revenue have actually declined. They were 35% in FY 2022, and that leverage is now 27% in FY 2023. We do have an incredibly asset-light, scalable business model, which has led to a cash conversion of 75%. As you may recall, in the AGM last year, we announced that we had retired our expensive legacy COVID debt, which was EUR 34 million in April, and that was partially refinanced with a new AIB facility, which was a EUR 10 million term loan and a EUR 7.5 million RCF.
So overall, you know, we're very pleased that the balance sheet has now been substantially repaired. Our net debt position is EUR 12.3 million versus what it was in December 2022, at EUR 21.6 million, with EUR 7.5 million cash on hand. So turning to the next page, I wanted to give you a bit of a summary of how we saw the year and then how we're seeing this year. So, you know, overall, we're really, really pleased. You know, I think it's a really strong year of financial delivery and obviously continued strategic progress on our strategy. You know, as I've mentioned before, we had record full year Net GMV and generated revenue 34% year-over-year. Robust bookings growth, 37% year-over-year. Asia, 2.5 times its size.
We also returned the business to profitable earnings per share. Earnings per share last year was about EUR 0.991, and indeed, we made some great progress on our ESG agenda. In particular, we've been working for more than a year on our Staircase to Sustainability program. You know, something which we're very, very proud of. It allows our customers to see data points at a hostel level as to their ESG credentials, and those credentials are aligned to the frameworks that are published by the Global Sustainable Tourism Council. The second thing it does, it also provides incentives for hostels to you know, to increase their sustainability operations year over year, and thus move up further up the scale.
In terms of this year, I think, you know, based on the recent trends, we seem very well positioned for further profitable growth. I'm really happy with the first 10 weeks. You know, this very, very strong start. I can see that market share in the first 10 weeks of the year is greater than it was in the first 10 weeks of last year. You know, clearly, the social strategy is continuing to drive those market share market share gains. I do think we can rightfully claim to be a leader in social travel. You know, as of November 2023, we had more than a million unique social members on our network. The app-centric nature of the strategy is also driving very strong growth in app bookings, which year-over-year are up 49%.
As a consequence of that, that's leading to that reduction in marketing expenses as a percent of net revenue. You know, we have been and will continue to be highly cash generative business model. The EUR 7.5 million RCF has now been repaid. We have a substantially stronger balance sheet. We're trending probably high single-digit revenue growth for the year, 20% Adjusted EBITDA margin. So we're fairly comfortable with the consensus that's out there. And I think, you know, even more importantly, very much firmly on track to meet our capital markets growth targets that we had in November 2022. So with that, I'm now going to pass to Caroline, who will go through the financial results in a little bit more detail, and then I'll be giving you a strategy update.
Good morning. I'm delighted to be here this morning with Gary to talk you through the FY 2023 results in more detail. So looking first at bookings and revenue, we saw significant growth in GMV revenue and bookings versus 12 months ago. Focusing first on the net GMV graph. Net GMV being the total value of bookings processed through the platform, net of cancellations. That was 32% greater than last year, at EUR 619 million, exceeding guidance. Generated revenue, which is gross revenue less cancellations, was flat to net GMV, with a gross growth rate of 32% also. As with FY 2022, our market-leading commission rate has remained flat over the period. We had initially guided growth of circa 20% at our Capital Markets Day in November 2022, which was upgraded to 30% in May 2023.
So we were very pleased to have closed the year ahead of this target. Net bookings were 37% greater than FY 2022, which gets you to 6.5 million bookings. Again, ahead of Capital Markets Day guidance of 6 million and subsequent upgrade in May to 6.2 million. Moving to the next slide, I'm now going to talk to how that performance broke out across the regions. This slide looks at revenue and bookings, year-on-year growth rates by destination. First, looking to mainland Europe, our largest market from both a volume and a value perspective. Europe recorded a very strong year, with double-digit growth in both revenue and bookings, both across Western Europe and Eastern Europe.
Focusing first on Eastern Europe, countries such as the Czech Republic, Poland, Slovenia and Slovakia, all key markets for us, grew greater than 20% year-over-year. In Western Europe, we also saw double-digit growth in Spain, Germany, U.K. and Netherlands. Those four key markets making up more than half of the bookings in that region. The rate of growth you'll see in Western Europe slightly lagged that of Eastern Europe, and in part due to the high bed prices we saw in many popular, particularly northern European cities. Looking outside of Europe and first focusing to the left-hand side of the slide. Central America grew year-over-year. This is a region that has seen fantastic growth, all throughout COVID.
Bookings there were persistently greater than 2019 levels, so very pleasing to see that region continue its very strong growth trajectory, with bookings up 5% year-over-year. LATAM, another key destination for us. We continue to see strong growth there. Bed prices are cheaper, so we saw an influx of demand in these lower-priced destinations, with bookings up 19% year-over-year. Now looking to the right-hand side of the slide, looking over to Asia and Oceania. 2023 was a record year for Asia. Asia is our second biggest market, and as we previously messaged, we've seen incredibly strong growth since borders reopened to international travel in Asia. Looking at South Asia first: Thailand, Vietnam, Indonesia. Those three are over 70% of total bookings in South Asia, and all of those three regions grew twice the previous year's bookings.
Northern Asia: Japan is a key market for us there. That grew four times the performance of 2022. Oceania, again, strong recovery in both bookings and revenue, with double-digit growth compared to FY 2022. Now moving to the next slide. Looking at how this performance has translated into net margin. Let's start on the left with what we had in FY 2022, EUR 26.2 million. Since then, we've seen strong growth rates across all regions, particularly in our two largest markets, Europe and Asia. This performance delivered EUR 12.3 million of margin. But another significant driver of margin growth was the efficiency of our marketing spend throughout the year. FY 2023 marketing percent of revenue, which is all paid marketing costs over revenue, less cancellations, reduced from 58% in FY 2022 to 50% in FY 2023.
This is at the lower end of the range we guided at our Capital Markets Day, which was 50%-55%. Within FY 2023, marketing reduced from 51% in H1 to sub 50% in H2, H2 being 48% in total. Social has been critical to generating this efficiency in marketing spend and margin uplift, and Gary will talk to the social strategy in more detail later on in the presentation. Other of EUR 1 million is principally deferred revenue, which is a provision movement relating to free cancellation bookings. We saw a drag from ABV this year of EUR 1.7 million, and as we expected, ABV contracted year-over-year. There's two main contrasting elements accounting for this 4% decline. We've had the benefit of bed price inflation.
That has been offset by geo mix, with a large volume of bookings coming from lower bed price destinations, with Asia, as I've said, having a record year in 2023. These components combined delivered a margin of EUR 43.7 million. Now moving to the next slide. Looking at our operating cost base, costs excluding brand marketing, and on this chart, I'm going to show you what our cost base was in FY 2019, which is pre-COVID cost structure, what it was last year in FY 2022, and what it is now in FY 2023. So starting from the bottom up, the orange block is wages and salaries. Costs here have increased year-on-year, in part driven by local wage inflation across the markets where we have employees based. FY 2022 included a small wage subsidy benefit, which was a COVID-related Irish subsidy.
We also reintroduced discretionary compensation this year for the first time since pre-pandemic. These combined resulted in a year-over-year increase in our wages and salaries costs. Contractor costs, the pink block, is down year-over-year. We have reduced the temporary resources that were required to support the launch of our social product features in FY 2022. 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. Blue block is FX, which is a cost this year, but not as significant as it was in the prior year when USD rates were at parity with euro. Finally, the green block, which is made up of all other operating costs, such as training and recruitment, T&E, legal and professional costs, et cetera.
We have worked hard to reduce this cost versus prior, down nearly 30% in order to offset the wages and salaries increase. So year-over-year, we can see OpEx as a percentage of revenue continues to decline and costs have increased by EUR 0.4 million year-over-year. Moving to the next slide. So taking it all together, starting from the left, we made a profit in FY 2022 of EUR 1.3 million. The net benefit of increased booking volume and ABV gave a EUR 10.6 million uplift. Lower marketing percentage delivered another EUR 5.8 million incremental margin. Deferred revenue delivered a EUR 1 million benefit. Again, the timing of free cancellation balance sheet provision movements. Other OpEx is marginally higher, with wage and salary increases, partly offset by other OpEx reductions, so EUR 0.4 million of a cost increase.
From an EBITDA perspective, we delivered a profit of EUR 18.4 million. We initially guided EUR 16.5 million-EUR 17 million in May, increasing this to EUR 17.5 million-EUR 18 million in October. EBITDA margin of 20% is well ahead of the CMD guidance we provided of mid to high teens margin in FY 2023. Moving to the next slide. Focusing on balance sheet and looking at our performance from a cash perspective. We started the year with EUR 90 million of cash. We recognized over EUR 90 million in booking revenue. Offsetting this was our direct costs of EUR 50 million and operating costs, EUR 22 million. We capitalized EUR 4 million of development costs, with balance being positive working capital movement, interest and taxes, getting you to EUR 12.4 million in operating and investing cash flows. We prioritized our operating cash towards refinancing our balance sheet.
We completed a full refinance of the HPS debt in May 2023, this being a cash outflow of EUR 30 million, the original facility, plus EUR 4.1 million of PIK interest. We drew down a new facility with AIB in May 2023. This was EUR 17.5 million net of arrangement fees, being a EUR 10 million, three-year term loan and a EUR 7.5 million RCF. The initial rate on this facility was an interest rate of 3.75%, which is subsequently reduced to 2.65% as we continue to deleverage the balance sheet. Again, using our cash to delever the balance sheet, we subsequently repaid EUR 7.2 million of this AIB financing. We repaid EUR 5.5 million of the EUR 7.5 million RCF.
Therefore, EUR 2 million was outstanding at the end of the year, and we paid EUR 1.7 million on the term loan. The total amount outstanding at the end of the year was EUR 10 million, and since year-end, we have repaid the remaining EUR 2 million balance on the RCF in February 2024. We delivered a closing cash position of EUR 7.5 million. As Gary talked at the start of the presentation, this is a very scalable, asset-light, cash generative business. We've seen that strong cash conversion reappear this year. We reported a cash conversion of 75% and adjusted free cash flow of EUR 13.9 million on an EBITDA of EUR 18.4 million.
This slide recaps on our FY 2025 targets that we set out at the Capital Markets Day and the expected growth rate of the three-year cycle from 2022- 2025. Looking at our FY 2023 performance and comparing that to these medium-term targets, as articulated at the time, we feel confident that we are well-positioned to deliver against our medium-term commitments. As covered off earlier in the presentation, bookings and GMV both grew greater than 30% year-over-year. While we always expected the rate of growth to be elevated in the first year of the three-year cycle, given 2022 comp year performance, we have performed stronger than the initial 20% expected growth rate. Marketing has persistently operated at the low end of the guidance range, and indeed for the second half of 2023 was sub 50%.
This is a trend that has continued into FY 2024 and gives us confidence that we can continue to grow market share and operate marketing investment well within the range given. Adjusted EBITDA of 20% was achieved in the first year of the three-year cycle. Again, giving confidence to deliver this return throughout the period through growing market share, top-line growth, marketing investment efficiency, and operating cost discipline. Cash conversion of 75%, achieved in FY 2023, enables us to continue to deleverage the balance sheet. Now, looking at capital allocation, as we have said, this is a very simple business model and in addition is a very scalable business. The business is asset light and generates significant cash flows. During FY 2023, we executed against a number of key objectives.
We refinanced the legacy COVID debt, replacing it with a facility at a lower quantum and at more attractive terms. We reduced our leverage range to less than 1 times, and we agreed a repayment plan with the Irish Revenue on the outstanding EUR 9.6 million warehoused payroll taxes. Our 2025 targets do not require any bolt-on acquisitions nor significant cash investments, and so our objectives will continue to be to pay down the remaining AIB debt facility, which as of today is just the balance on the term loan outstanding. The EUR 2 million that was outstanding on the RCF at the end of last year was repaid in February of this year. We will commence payment of the warehoused taxes. There is 0% interest accruing on this facility.
We will pay a 15% deposit in May 2024, and the balance will be repaid monthly over a 3-year period. We will continue to grow the business, delivering against our growth ambitions, and we're already seeing proof points that our strategy is working. Finally, the last topic in my section addresses ESG. We are very proud of the work that we do in this space. I chair our ESG working group, which is a cross-functional team that are very committed to ensuring we put ESG at the heart of our culture and our strategy. We are delighted that our pioneering Staircase to Sustainability framework has successfully launched. This was an 18-month project, which we worked in partnership with the Global Sustainable Tourism Council, modeling the framework on their sustainability criteria. The framework will help hostels promote the inherent sustainability advantages of their hostel accommodation.
Our customers can now search for hostel accommodation solely based on sustainability search criteria, such as sustainable management practices, socioeconomic impact, cultural impact, and environmental impact. Whether it be through showcasing sustainable hostels through our sustainability stories, blog posts, socials, CRM, we're committed to providing our customers with the tools they need to curate trips and experiences that are inclusive, sustainable, and enables them to travel responsibly. We have seen the growing importance of sustainability across all stakeholders in the travel ecosystem, and we know how important offering sustainable accommodation is to our customers. We've worked with Bureau Veritas on pioneering research that shows that hosting is the most sustainable accommodation type, reducing more than 80% less carbon than hotel counterparts. With that, I'm going to hand back to Gary.
Thank you very much, Caroline. Turning to the next page. As I mentioned earlier on in the presentation, I really think we can claim the mantle of the market leaders in social travel. We've now reached 1 million unique members in November last year. We continue to grow that network. And since launching the network in, when was it? April on iOS and June on Android, we've really continued to innovate around the richness of the profiles, how people describe themselves on our network. We've continued to innovate on the chat messaging and the Slack channels that we have on our platform to help people to actually connect and meet in real life.
But of course, in second half last year, we also launched our events platform, which we called Linkups, and this provides other opportunities for people to meet when they're in destination through the cataloging of hostel events on our platform. Indeed, you know, albeit that we're super pleased with the progress that we've made to date, we do think there's an incredibly long runway in this strategy. You know, one of the things you should be expecting to see from us over the next 12 months is how we can make each part of this social platform better through AI.
How we can make it even easier for our customers to be able to describe themselves based on what we know about them and what we can surmise from, you know, looking at other people, pieces of data that they give us, or indeed, how we may use AI to be able to make it even easier for people to connect through our messaging platform. Or finally, how we could use AI to be able to recommend, you know, more relevant events, where people can also help travelers find people to hang out with, you know, using those hostel events. So over the next 12 months, certainly, you know, a lot more to come.
And I think turning to the next slide, it really has served to reposition the company from not just being a functional OTA platform, but, you know, more of a lifestyle platform indeed, where fundamentally we're changing people's lives. And I wanted to just give you a couple of examples of what I mean by this. So if you look at the left-hand photo, the lady who is the third one up on the left-hand side, she is Courtney Darrow from Vancouver in Canada, and she booked a hostel on the west coast of Ireland on our platform, and even before she had touched down, before she arrived, she'd already organized drinks with a couple of guys in a local pub, and by the time she actually got there, it mushroomed to 15.
Of course, you know, Courtney had such a wonderful time that she posted about her story on Instagram with this photo. I'll give you another example. If you look on the right-hand side, so we have two people here. We have Benjamin from London and Aislinn from Canada, two solo travelers who were traveling last year in Hue, which is a city in Vietnam. And Benjamin, when he arrived, used our platform to send a message to any other Hostelworld customers who were in Hue and sort of said, "Who would like to come out for dinner tonight?" But lo and behold, Aislinn said yes. Clearly, they got along very well. They continued to travel around Vietnam together, and they've now moved in together in London.
And again, Benjamin saw fit to post about, you know, this budding romance that, you know, that had happened to him courtesy of our platform. So we really are very much in the business of not only providing, you know, a simple booking platform with very, very competitive rates and availability, but also overlaying this wonderful platform, which fundamentally is changing people's experience of travel. It's changing people's lives, and that's very, very exciting. And of course, turning to the next slide, with all of these posts that people are making, you know, whether it's in TikTok or Trustpilot or Instagram or X or indeed in the Play Stores, this growing word of mouth is serving to amplify all of the other efforts that we do. You know, so consequently, we're super excited about it. Now, how do we do this?
Moving to the next slide. It really is the pioneering social network, which is the cornerstone of our strategy, and I just wanted to spend a minute or two explaining very simply how it works. Any customer, whether it's a new customer or indeed an existing customer who hasn't used the network since we launched the social features, as normal, they can make a booking on any platform, whether it's our website, iOS, or Android app. They have the choice of opting into the network or not. It's not a default opt-out. Most do opt into the network, but clearly some don't. They are OTA-only customers, and they come to us because of our competitive inventory on the platform. But if they do sign up to the social network, we invite them into city-based and hostel-based chat groups 14 days before check-in.
So the only people that you as a customer will see are other people who are going to be either staying in the same hostel as you are on the same dates, or indeed, in the same city that you are. So for example, Joe's Hostel in Barcelona. This person would see everybody else who's staying in Joe's Hostel, and they would also see everybody else who's staying in Barcelona, and these chats are organized by theme. So, for example, you might have drinks and dancing or walking tours or dinner and so on. These Slack rooms or chat channels stay open up until three days after checkout, and then what we are seeing, because the social platform is only available on iOS and Android, that people are then using these apps to make their follow-on bookings.
So this is the essence of how the strategy is put together. So turning to the next slide, we'll talk a little bit about both the design of the social network and how we have implemented it in terms of how that delivers long-term EBITDA and free cash flow growth. So from a design perspective, as you'll see, we are wholly focused on our mission, "Help travelers find people to hang out with," and that is really satisfying a unique customer need in this particular category, and we are the only people who are doing this. So as a consequence, we are driving, you know, great growth in new customers. Increasingly, we're seeing those customers go directly to the App Store... and also we're seeing stronger retention rates because we're providing this service. So that's what's really driving the revenue growth.
Then from an implementation perspective, as you will have seen from the prior slide, the social network, the social features are only available in our iOS and Android apps. So as a consequence, it's what we term an app-centric delivery model. This has the benefit of reducing customer acquisition costs. More people are going directly to the App Store to download our apps and use them. But also for follow-on bookings, more of those retention bookings are coming through the app, and that lowers marketing costs as a percent of revenue. So we have growing revenue on a base with reduced marketing expenses as a percent of that revenue. And then, of course, from the operating model perspective, it's a very scalable asset-light platform, as Caroline has highlighted. Our OpEx base has only increased by EUR 400,000 year-over-year, 75% cash flow conversion.
So we're getting increasing operating leverage as we grow, and overall, this is the formula that allows us to power EBITDA growth and free cash flows. So that's how the design and implementation of the strategy work hand in hand to deliver this economic benefit. So if I perhaps turn back to the design comment, if we look at page 2022, I wanted to give you a little bit of a preview about how the social platform itself is growing. So as I mentioned earlier, we launched on iOS in April 2022, Android in June 2022, so ergo, first half 2022. And I wanted to show you the growth rate of the unique social members. So if you look at the base that we had in first half 2022, it's actually grown 13 times now when we get to H2 2023.
So that's the product of 4.6, 1.8, and 1.6. At around November time in H2 2023, we surpassed the 1 million mark. Now, perhaps more importantly is obviously we've now got people who have signed up to the network, they're downloading the app, is how do they actually use it? Now, of course, the app is used both as a booking tool and it is used as a means to use the social features to help you find people to hang out with. A proxy for how people are using is simply just to look at, well, how many messages are sent over the social network? How many messages are being posted by these unique social members? So you can see that the growth there is even stronger.
If you look at the number of messages that were sent in H1 2022, and you compare that with H2 2023, the product of those numbers is actually 25 times as great relative to the 13 times growth rate in the number of unique social network members. So we're very, very happy that we're starting to see that network effect. More people use it, more people find that the network is useful. They use the network even more. In terms of the other part of our social platform, you may remember last year we talked about the launch of our Linkups platform. Linkups is a platform which allows hostels to load their event inventory.
It might be an evening event, it might be dinner, it might be a day-long excursion, but it provides hostels with the ability to broadcast their events to all customers who are staying in the city on the dates and the times that those events are taking place. So we only launched this platform in second half last year, but what we can already see is there's been a strong take-up by our hostel partners, and now fully three-quarters of our social members can see at least one thing to do at a hostel in a city, you know, when they're in trip, 74%. So obviously very strong growth off that base in H1 2023, and we'll be seeking to increase that over time.
Now, turning to the next slide, the other important part of the strategy, of course, is: well, what kind of customers does this product, do these set of features actually attract? And I think the easiest way to think about that is going back to how the network is put together. People opt in to the network if they so choose, just before they're ready to make a booking. So if we compare the behavior of two new customers, one who decides to opt in to the network and use the features and one that does not. So we call the latter the non-members, and obviously the people who opt in, the social network members. And we look at a period of 3 months, 91 days, and we compare and contrast the behavior.
And what we can quite clearly see, and we've run this analysis very frequently throughout the years, and the numbers hardly change. But essentially, we see that social network members, people who obviously want to use our platform to help them find other people to hang out with, they make a bit over 2 times the bookings in those first 91 days, and they're more than 3 times as likely to use the app. And we've seen a consistent growth in the proportion of our bookings that are made by these social members. To now, as of Q4 2023, it's up at 74%, so it shows continued growth, you know, right the way through the period since, since launch.... So thinking about the implementation of the network and why this drives such strong app growth, if you look at our platform, of course, we still take web bookings.
You know, there are some people, if they're sitting at home, they're not traveling, you know, they're just in research mode, who would probably be using their laptop or desktop at home to make their bookings, especially if they're international bookings and their first booking. But more and more, we're seeing people who are hearing about us because of all of the posts on Instagram, on X, and so on and so forth, and they're going directly to the App Store to download our app.
But overall, just as a way of thinking about how the strategy is actually leading to that reduction in marketing expenses, if you look on a year-over-year basis of the proportion of apps or proportion of bookings, I should say, that are coming through our apps, it's at 49% year-over-year, so really strong growth, versus web bookings that are at 29% year-over-year. So as a consequence of that steady growth, as the social network continues to grow, marketing as a percent of net revenue in first half was, first half of 2022 stood at 60%, and second half in 2023 is at 48%. So there's a continual glide path down. So the strategy is really delivering in terms of that market share growth, revenue growth, and a declining marketing as a percent of net revenue.
I guess the final point on the type of customers, if we turn to the next slide. As I mentioned earlier, they're 2.3 times as likely to book over that first 91 days, which leads to increasing retention rates. So this is our full year net generated revenue by year, but we have now categorized this in terms of the year of acquisition. So if I look at 2016 as an example, the green bar at the top is the revenue from customers that we acquired in 2016, and the green bars in 2017, 2018, 2019, is the revenue contribution in those years from that cohort that we acquired in 2016.
So therefore, you can look at the revenue that's above the dotted line as the first-year acquisition revenue and the revenue below it as the recurring revenue. So if I now turn to 2022 and 2023, there's a couple of points to note on 2023. The first is, if you look at all of the colored bars below the dotted bar, the pink, the purple, the brown, the blue, all of those, cohorts are now coming back, no matter what the year of acquisition, more strongly than they have ever done in the past. The second point to note is, if you look at the first-year retention rate from 2022 going into 2023, which is the pink bar, it is the highest first-year retention rate that we've ever seen in the platform's history, going all the way back to 2013.
So clearly, the introduction of the social platform post-COVID is delivering a much stronger business model. The final point I would say is, if you look at the first-year acquisition revenue in 2023, it's also the largest that we've ever had on record. It bodes very well for the outlook for 2024. Overall, please move to the next slide. I'm gonna switch and move back to bed nights so that we can compare what's been going on with the category and what the growth rates have been for Hostelworld on top. In FY 2022, we recorded in bookings about 17 million bed nights. Now, using our own scraping data and making a few assumptions about the category, we think that the category contributed about 8% of our growth to get to 19 million.
In terms of the category, what we've seen is the growth is mostly driven by a year-over-year capacity increase. There's been a minor increase in occupancies, probably around 58%, going to 59%. So most of it's actually capacity increase, which obviously bodes well for the future. Consistent with our own results, we've seen significant year-over-year growth in South Asia. That's part capacity, part occupancy. And year-over-year growth in Europe has been a little bit more muted versus that 8%. Now, from the 19 million to the 23 million, that's Hostelworld growing faster than the category, and we think that that's probably another 20% more. So the combination of the eight, you know, eight percent multiplied by the 20% in terms of growth rate, leads to the 30% growth rate overall.
In terms of what we've seen in excess of the category, really super strong year for Asia. It's 2.5x the size year-over-year. Obviously, the social strategy is continuing to drive those share gains on top of that category growth. It is continuing to do so in the first 10 weeks on a year-over-year basis this year. And our own hostel supply, you know, which we increased on a year-over-year basis, basically matched category growth. So there's kind of the component parts of our 30% in terms of how much we think came from the category... and how much we think came from, Hostelworld's growth in market share. So just staying with that market share point, if you flip to the next slide, slightly different way of showing the same results.
On the category basis, on the left-hand side, in FY 2022, at the end of the year, we thought it was about EUR 200 million, which was a little bit more than what we thought at Capital Markets Day. Our market coverage, as a consequence, we thought was gonna be a couple of percentage points higher in Capital Markets Day. You know, looking at the data, it's now probably about 74%. If we just stay with those two numbers and look at category FY 2023, so as I mentioned on the earlier slide, category's grown about 8%. Our market coverage has stayed flat at about 74%, which obviously implies that we've added more hostels on the platform. We just haven't added them at a faster rate than the category as yet.
In terms of category market share, in FY 2022, if you take our 17 million that I talked about earlier and contrast that to the whole category, it would be about 8.7%. If you just compared it to the category OTA share, recognizing whether it's hostels on our platform or the category as a whole, it's a pretty safe assumption that OTAs distribute about 50%. That would imply our share of the category accessible to OTAs would be double 8.7, so that would be about 17.4%. And if we now turn to FY 2023, you know, as we mentioned earlier, we have a 30% growth in our year-over-year bed nights to 23 million.
That would imply a market share of the category of 10.5%, and again, of the part of the market that is accessible to OTAs, you know, 50% category OTA share, that would imply that we have a 21% of the accessible category. So good growth in market share. We're very, very pleased with that. So moving to the next slide, I wanted to talk a little bit about how we're thinking, you know, about the balance of this year. So in essence, over the next month, it's going to be more of the same. It's more of the same winning strategy, which has really delivered for us in 2023. You know, first priority is to just to continue to invest in our platform to realize our mission. You know, help travelers find people to hang out with.
We do continue to believe it's uniquely differentiated. It's addressing a very prevalent and powerful need in our strategy. We have evidence, of course, in all of the posts that we're seeing in social networks, and I think, you know, this really continues to strengthen our growing competitive moat, and it also continues to drive share gains. So as I mentioned earlier, you know, we'll be continuing to iterate on our profiles, messaging, and Linkups. I think the second part is there is clearly some opportunities to penetrate some other low-cost customer acquisition channels.
What I'm thinking about there is in terms of the social channels, whether it's, you know, Instagram or Meta, other Meta channels, or indeed WhatsApp, you know, TikTok and so on and so forth, we're gonna be exploring and experimenting how we can build, you know, slightly different product features which allows us to scale our presence in those, in those networks. And really, the underlying reason is it would continue to reduce our average customer acquisition cost, which in turn, you know, would lead to lower marketing costs as a percentage of revenue. The final point is, you would have heard me from time to time continue to talk about, our migration of that legacy tech stack. First, to get it cloud-hosted, then to get it cloud-native.
I think, you know, one of the things that's definitely exciting and something that we'll be using and exploring a lot more is the fact that our cloud provider, which is GCP, Google Cloud, that actually gives us access to native Gemini AI. That becomes incredibly important because it means that our platform can write code that would take data, real-time data from our platform, interrogate Gemini AI, and realize real-time responses, which could be fed back into the platform. So we have nothing to announce as yet. It is something that we will be spending a good bit of time on over the next twelve months.
But of course, you know, the rationale for doing that, well, the transition obviously to cloud-native reduces our hosting costs, but also the increasing capabilities that we can get from our cloud partner are going to help us accelerate innovation, and over a period of time, that's going to lead to even higher operating leverage. So those are really the three focus areas for us over the next 12 months. In terms of what that looks like from a guidance perspective, I think in FY 2023, you can see the results that we posted there. You know, it's still very early in the year. We're only 10 weeks in. The trends that we are seeing would be somewhere of the order of high single-digit growth, you know, whether it's net bookings or net revenue.
It may be that net bookings is a little higher, revenue is a little lower, or the other way around. It's only 10 weeks in. About 65% of our demand is booked within 7 days of stay date, so we have a very, very short visibility into the future of the year... I do think marketing's percent of net revenue is looking very favorable. 50% in FY 2023. If you look at that in the first half, second half basis, you know, first half was 51%, the second half was 48%. I do expect that we are going to be underneath 50% on a full year basis. And again, in terms of adjusted EBITDA, you know, we think that's definitely gonna be around the 20% EBITDA margin. So that's as, as much as we see it.
As we go through the year, we will continue to update the market as we get, you know, more months on our belt, and we get better visibility into the peak summer season. So, in conclusion, turning to the next slide, I think we are incredibly well-positioned. Social strategy is uniquely positioned to win in this category. We've got, you know, more than 18 months head start versus anybody else. Our growth is gonna be continued to be driven by category growth and strong market share gains. We're very well-financed now. There's a huge amount of work that the team has done to complete the refinancing last year on materially lower interest rates. You know, as we've mentioned, it's highly cash generative business model. It's just going to continue to deleverage over time.
Caroline has articulated what our sort of near-term capital allocation priorities are, and very much firmly on track. I was incredibly pleased that we, you know, we delivered our Adjusted EBITDA at the end of last year, ahead of our guidance that was only given in October. So EUR 18.4 versus EUR 17.5-EUR 18. And looking at the other targets that we set ourselves, I think it's fair to say, you know, in as we have just completed year one of our three-year target set out in Capital Markets Day, you know, we're very much firmly on track to meet those. So finally, thank you. Thank you for listening to us this morning. We hope that you got the sense of accomplishment and excitement of what we intend to do over the next 12 months.
Obviously, always consistent with why we're here, which is helping travelers find people to hang out with. With that, we would be delighted to take any questions. Thank you. Welcome, everyone-
Thank you, Gary. Thank you, Gary. Good morning, everybody. I'm David Brady. I'm the head of Corporate Finance and Investor Relations here at Hostelworld. We've had a number of questions throughout the presentation. Thank you for submitting those. I'm gonna put as many of those to Gary and Caroline now as I can in the time that we have left, and any questions that we don't get to, we'll follow up with you over the coming days. Gary, you might take our first question. It's looking for an update on the wider hostel category forecasts, your latest view, compared to what we would have issued at our November Capital Markets Day of category.
Then maybe building on that, any plans that you see for ancillary opportunities, and any M&A any CapEx plan associated with that as you look at opportunities to build out the social strategy feature set, the platform cloud or potential AI upgrades?
Thank you, David. So, wider hostel market forecasts. I think Capital Markets Day, you know, volume-wise, I think we said it was gonna be about 5% over the three-year period. Clearly, it was a bit more than that, 2023 over 2022, in part because we had the tail end of Omicron in 2022. I still think, you know, those numbers are robust. In terms of the ancillary opportunities, you know, if you look at the things that I was talking about today as being the priorities, we clearly believe, and I think the numbers would show evidence that the strategy is working, both in terms of the needs that we've identified and gone after, and the business model that we've put behind that to deliver it.
So my sense now, you know, looking at where we are from a market share perspective, you know, we're 21% of the OTA category. We've still an awful lot of headroom to grow there, and I want to continue to keep on developing that competitive moat. You know, there are ancillary opportunities, absolutely. But, you know, they're like options. You know, we can, we can choose to pull the trigger on those at any time. But, you know, with the resources that we have available, I think, you know, our primary objective should be to continue to grow profitable market share. And in relation to the second part of the question, you know, should anybody be expecting some, you know, significant or lumpy CapEx? I think the answer is no.
You know, we continue to you know, make the migration from sort of cloud-hosted to cloud-native. You know, it doesn't require any CapEx to start accessing some of the Gemini AI capabilities inherent within the platform. In terms of the social strategy, you know, that is, you know, continued experimentation. So again, it's not really you know, a CapEx expense. So, the answer is no. You know, they... One shouldn't be expecting any lumpy CapEx.
Thank you, Gary. Caroline, I might turn to you with our next question.
Yeah.
Kind of relates to seasonality and cash generation, and notes that, January, February performance must have been quite strong if we were able to, retire the RCF, in that period. So what does January and February look like in a typical year?
Yeah. So, January and February, Q1, in a typical year, it's not our largest quarter. We do see some seasonality in our business, despite the fact that we have global demand. In 2023, Q1 represented 25% of our bookings and a similar level of our revenue. So just for context, for people, in 2024, we'd expect to see a similar mix coming from Q1, 2024. Yeah, we were delighted to be able to retire the RCF. We were cash generative, taking Q, January and February together combined, and that enabled us to repay the outstanding EUR 2 million on the RCF that remained. As of now, we have the balance on the term loan, which we will continue to repay as per the terms of the deal sheet.
January cash flow was aided by a VAT receipt that we received pertaining to November and December of 2023, but we will always have an element of timing of receipts in our cash flow.
Thanks, Caroline. We'll try and squeeze in two more questions, if we can. Gary, I might turn to you with the next one. The question is about our marketing spend and that percentage trend that you talked about in the presentation, half year into half year, into half year, and so on, was trending very positively. How do you feel then about the lower bound target that we set out for 2025, where we had that range of 45%-55%? What do you think is possible there, and how might we get there?
So at Capital Markets Day, you're absolutely right. We gave the band of 45-55. I think, you know, in 2022, we were 58. In, on a full year basis, we were 50 last year, which was comprised of 51 and then 48 in second half. So clearly, the trajectory, you know, is very favorable. I have had similar questions before, and I think the answer is really when you look at the revenue retention chart, there is clearly a trade-off between, you know, the rate at which we grow revenue and where our marketing expenses are. There will always be a downward pressure, which is driven by the strategy. In fact, the strategy of putting the social features in-app was expressly designed to push down marketing's % of net revenue. But, you know, we're also ambitious to grow.
So, you know, the purpose of giving us that range was to be able to use the flexibility to be able to drive up revenue, but then always with the expectation that if you took revenue less direct marketing costs, you know, that would continue to grow year-over-year. So we will definitely fall in that range. We will definitely fall, you know, in the lower half of that range. But clearly the evidence is on the table already that we're making great progress towards the very low end.
Thanks, Gary. I might stick with you just with our last question, and there's two parts to it. The first part, Gary, is about source market Asia, and specifically what you and the team are, are doing to try and capture growth there. And then second part of the question is around in-hostel spend on ancillaries by our, by our customers. Is there any, is there any data or anecdotal insight you can share on that?
So I think on the first point, when you talk about source market Asia, so we, when we look at Asia, we look at it, you know, primarily as a destination, but also as a source of travelers. And I think certainly as a destination, you know, it's grown 2.5 times year-over-year, and indeed, over the first 10 weeks of this year, it's still showing phenomenal growth. So I think, you know, we certainly have the right hostels to buy competitive rates and availability to, you know, serve both intra-Asia demand and also other, you know, other regions that are sending customers to that region.
In terms of attracting Asia customers into other regions, we are present in all the same channels as we are globally, whether that be paid search, organic search, app stores, and so on and so forth. So, you know, from that perspective, the platform flexes as people, you know, want to use it to visit any part of the world, from any source market. So I don't think that we're missing anything in terms of our presence. We're really sort of... You know, at the moment, in the hosteling market, there's far more people going to Asia than going in the other direction, and that's probably more to do with Asia having the lowest spend prices globally at about EUR 10 a night, versus a global average about EUR 33, and if you were to look at Western Europe, it's probably up there at EUR 37.
So, David?
Gary, the second part of that question then, about in-hostel spend by-
In-hostel spend.
Our customers.
I don't have any specific data points. All I can say is, you know, we continue to see great interest in the Linkups platform by our hostel partners, because it gives them the means to not only acquire revenue from people who are staying at the hostel, but indeed they can publish the events to all of the, all of the Hostelworld customers who are staying in the city, and therefore bring in, you know, more casual demand and drive up their own ancillary. So while I don't have a data point, in terms of what the ancillary spend is, I do know that the products and features that we're building will certainly be driving it.
Thanks, Gary. Look, we've just gone past the hour mark, s o we'll wrap up at that. We'll follow up with... There are other questions, we'll follow up with people individually, but I'll hand back to you, Gary, to close out the call and the presentation.
Thank you. So thank you for joining us today. I'll be mindful of the time. We're a couple of minutes over. You know, I hope you, I hope you agree with us that it's been a great year of progress, 2023 over 2022. And indeed, when you look at the targets that we set for the Capital Markets Day, you know, we're actually achieving some of them already after, you know, one year within the three-year cycle. And certainly all the evidence, you know, points towards us being firmly on track to meet those commitments. And watch this space in terms of what AI is going to do to help us enable our mission even further. So I thank you for your time, and look forward to speaking to you again in August.