Hello and welcome to the 2024 preliminary results presentation and Q&A for Hostelworld. I'd now like to turn the call over to Chief Executive Officer, Gary Morrison. Please go ahead.
Thank you and welcome to Hostelworld's 2024 preliminary results presentation this morning. We're delighted to have you with us. Today I'll be joined by our CFO, Caroline Sherry, and David Brady, who's Head of Commercial Finance and Investor Relations. For the next 30minutes-45 minutes, Caroline and I will run through the slides, and if you have any questions, please can you submit them via the platform. David will collate these at the end for a Q&A session. We just have the customary disclaimers. I'll start today by discussing our financial results in the context of customer trends year over year, our social strategy performance, OPEX discipline, and then what we have done with our operating cash flow this year. I'm going to start on the top left by anchoring in net bookings growth of 6% year over year.
The first customer trend that we saw is a mix shift towards solo travelers. Net bookings from solo travelers grew 9% year over year versus a global average of 6%. That mix is now 63% of all net bookings in 2024, up from 61% in 2023. Consequently, the total packs that we have delivered through the platform has only risen by 4% versus the 6% net bookings. The second customer trend we saw was a strong preference for lower cost destinations. To illustrate, if I look at the net bookings from U.K. travelers, that was up 10% year over year, and from all European nationals, it was up 11% year over year. That comprises about 60% of the mix, so solid growth from those core source markets.
What we also saw is these travelers were booking lower cost destinations, especially South Asia, which grew 29% year- over- year. South Asia has an average bed price of about EUR 11 a night versus Europe, which is EUR 33 a night, three times as great. Europe slightly declined by 3% year over year. Collectively, this has had a pretty significant effect on ABV, which declined by 8%, leading to net revenue growth of - 1% year over year. The third customer trend, if you look in the top right-hand corner, is that we continue to see great take-up of our social network. 80% of those 6.9 million bookings were now made by social members, and that's up from 67% in the prior year.
As you'll know, our social network is only available in the app, and that therefore encourages our customers to download the app in order to use it and then subsequently use the app as their primary booking form. This led to 16% growth in bookings on our app year- over- year. It is now 47% of the total booking mix, and indeed about 60%-61% of our overall bookings are now coming direct through free channels. Collectively, this channel mix delivered marketing as a percent of net revenue of 46%, down from 50% in 2023 to reach the low end of our capital market range of 45%-55%.
This significant reduction in marketing as a percent of net revenue from our social strategy, when you apply that against a -1% revenue growth, still led to a net margin expansion of 7% year- over- year, which totals EUR 46.6 million. Turning now to OPEX, overall OPEX declined slightly, 2% from EUR 25.3 million to EUR 24.8 million. The volume increases in hosting costs because of the net bookings growth were actually mostly offset by the work that we did on the platform to get more efficient code and slightly lower wages and salaries. Collectively, the 7% increase in net margin on a slightly lower OPEX base year over year generated a 19% increase in EBITDA of EUR 18.4 million, rising to EUR 21.8 million in 2024. Turning to cash, 66% of that EBITDA converted to cash, which is EUR 14.3 million.
If you combine that with the EUR 7.5 million cash on hand at the beginning of the year, we use that to repay EUR 13.5 million RCF and term loans from AIB. We also paid EUR 3.2 million in Irish warehouse taxes, and we still have a balance of EUR 6.2 million outstanding. Collectively, this leaves us with a net cash position of EUR 2 million at year-end and an EPS of 13.97, which is an increase of 41% year- over- year. I'll summarize the year in terms of where we are in the growth strategy and also what the financial outcomes have been. The first thing to say is our growth in social membership and engagement.
I was delighted to see that we passed the 2 million cumulative social members in the fourth quarter, and also delighted to see that our message volume growth, which is an indicator of the engagement with the social features, is significantly outpacing booking growth, especially in the second half. 80% of our bookings made by social members, that's up 13 percentage points year over year, and that's fueled app booking growth of 16%. We've continued to invest in increasing our inventory range on the platform, which has led to a market coverage growth from 74%-77%. That's really been driven by work that we've done on the platform, resourcing, having more of our local global markets team in destination, and also acquisition improvements, which have led to a reduction in cycle time of 30%.
We now have 2,100 hostels on our platform with the Staircase to Sustainability certification. Caroline will talk a little bit more in terms of that program when we talk about ESG, and I'm delighted to see that there's another 500 waiting in the pipeline for that certification. Overall, what we've seen is adjusted EBITDA delivery in line with consensus and the return to net cash. Net bookings up 6.9 million. Net bookings up from solo travelers up 9%. ABV contraction of 8% driven by our customers' preference for lower cost destinations. Social strategy has continued to deliver a reduction in marketing as a percent of net revenue. It was 46% in 2024, 50% in 2023. Even across a slight contraction in revenue, it generated a 7% increase in margin up to EUR 46.6 million.
Adjusted EBITDA came exactly in line with consensus at EUR 21.8 million, which was up 19% year over year, and adjusted EPS of +41%. Overall, from a balance sheet perspective, we've seen a return to net cash by year-end, all bank debt repaid in full, fully two years ahead of schedule. I'll now ask Caroline to go through some of the key results in a little bit more detail. Caroline.
Many thanks, Gary. Caroline Sherry here, delighted to be joining you this morning to talk to Hostelworld's full year 2024 financial results. The first slide looks at net bookings by source nationality. This is the nationality of our customer base and essentially where our bookings originated. As Gary said, net bookings grew 6% year over year. We are going to look at where those customers were sourced. Europe, U.S., Canada, the U.K., these are our biggest regions from a source market perspective and together account for 80% of our source demand. We can see within that that the greatest demand came from our U.K. and European customers, with both of these markets experiencing double-digit growth. In fact, Europe was our biggest source market and set a record significantly ahead of previous years, growing versus last year, growing 11%.
U.S. and Canada is also another very important source market for us, particularly long-haul customers. These accounted for 20% of our source bookings, which was actually a growth rate that was flat to prior. We continue to see an increase in Asian bookings growth. 8% is a small but growing and important source market for us. Similar to what we communicated to the market at the half year, Oceania was the only region to contract from a source customer perspective. We saw less long-haul travel from customers in this region, with these customers instead opting for shorter haul destinations. Oceania source bookings into Asia was actually up 37% versus last year. Moving on to the next slide, we're going to look to see where these customers travel to. We can see from looking at this slide, the dominant performance of lower cost destinations.
As we have talked about, customers shifted their preference towards lower cost destinations in 2024. As a result, regions such as Northern Europe, where their prices are at their highest, contracted year over year. Focusing first on the right of the chart and looking at Asia, Asia destinations, both north and south, saw significant growth rates for a second year running. Asia now accounts for 30% of our bookings, with customers from Europe and the U.K. being a significant driver of this Asian performance. Bookings from Europe to Asia were up 34%, and bookings from the U.K. to Asia were up 27%. Indeed, intra-Asia travel was up 19%. Whilst Oceania was down year over year as a source market, we can see that as a destination, it grew 5%. This was predominantly driven by European source customers.
Now looking at Europe, Europe still remains our largest source market from both a volume and a value perspective, and it accounts for 40% of our bookings by destination. Performance here, not as strong as last year. As we've talked about, customers instead opted to travel to lower cost markets. We did see some growth in intra-European travel and growth in travelers from Asia into Europe. However, the decline in travelers from the U.S., Canada, and Oceania into Europe were the main driver of the year-on-year contraction in European travel. Moving to the left of the slide and looking at Central America and LATAM, both of which are low-cost destinations, combined, these accounted for 17% of FY 2024 bookings. We saw an increase in demand here year over year. We continue to see record numbers of travelers into Central America and pretty consistently across all source markets.
U.S., Canada, an important source market for us. Customers here, as we said, have prioritized travel to Asia, which grew 10% year over year. In total, as Gary said, we had 6.9 million bookings, which was a growth rate of 6% year over year. We are going to look at this performance now from a revenue perspective. Revenue growth here, tracking the lower cost destination mix we have talked about, generated revenue is gross revenue, less cancellations, down 2% year over year, a similar level of contraction to what we reported at our interim results in August. Again, a repeat of really the patterns we have seen from a booking perspective, we see that revenue growth across all low-cost destinations, particularly so in Asia and Oceania, saw the strongest growth. This really was the shift in consumer demand for low-cost destinations with our customers looking for value.
This geo mix resulted in an average booking value contraction of 8%, going from EUR 14.36 in 2023 to EUR 13.21 in 2024. Of this 8% contraction, 4% was due to geo mix. As we can see from the chart, the average bed prices in South Asia are EUR 11. As Gary said, that's a third of the European prices. We have also seen an increase in solos, which has also had a headwind to our ABV. Overall, bringing it all together, we recorded net revenue of EUR 92 million, which was down 1%, just slightly down on FY 2023 numbers. This slide looks at how that booking and revenue performance has translated into net margin. We generated EUR 46.6 million of net margin, which was a growth of 7%, this despite an 8% contraction in our average booking value.
We've seen solid growth across many regions, with Asia our fastest growing market. This booking volume delivered EUR 2.9 million of margin. Another significant driver of our margin growth was the efficiency of our marketing spend throughout the year. Our full year marketing as a percentage of revenue, which is all of our paid marketing costs over revenue minus cancellations, reduced from 50% in 2023 to 46% in 2024. This marketing efficiency delivered EUR 3 million of margin. Our social strategy has been very effective in generating marketing spend efficiency. Really, that's helped to drive new and existing customers to our Hostelworld App. Our app bookings grew 16% this year. This results in a greater mix of low-cost bookings and margin uplift. This is something that Gary will talk to in more detail in his section.
Other of EUR 1 million is principally deferred revenue, which is a provision movement, which accounts for free cancellation bookings. We saw a EUR 4 million drag from ABV, which, as I've covered, was predominantly geo mix driven. The impact of this geo mix headwind lessened as we progressed through the year, but it had a drag nonetheless. Bringing all the components together, we delivered a margin of EUR 46.6 million. Here we're looking at our operating cost base. These are all of our costs excluding brand paid marketing. This slide looks at the evolution of our cost base over the past three years. Our 2024 operating costs of EUR 24.8 million were down 2% versus 2023, down EUR 500,000. Looking at the main components of our cost base, working from the bottom upwards, the orange block is our wages and salaries.
At the end of December, our headcount was 227, a marginal increase versus headcount in FY 2023. We've managed the impact of wage inflation through the utilization of lower cost temporary contractor resources. The contractor resources you can see as the pink block and have increased marginally year over year. We've used specialist resources to support the ongoing work on our social platform, such as streamlining our social member onboarding process, the launch of our recommendation engine, and enhanced chat rooms and search and filtering tools for message content. Looking at the orange and pink blocks combined, which is our total resource and costs, these have reduced year on year. The yellow block, which is our tech investment, our platform operating costs, these have reduced year on year.
We continue to harness the efficiency of our cloud-hosted platform and our modernized tech stack, so down marginally year over year. Finally, the green block, which is made up of all other operating costs. We have managed this cost base tightly, and it is flat year over year and has halved versus where it was in FY 2022. Taking it all together and looking at our adjusted EBITDA performance, starting from the left, we had an adjusted EBITDA of EUR 18.4 million in FY 2023. As mentioned, we saw the net benefit from increased booking volume of EUR 2.9 million. Lower marketing costs delivered another EUR 3 million incremental margin. Deferred revenue benefit of EUR 1 million. Again, this is the timing of our free cancellation balance sheet provision. Other OPEX, a saving of EUR 500,000 versus prior, predominantly resource cost driven. ABV was a headwind, which contracted 8% year over year.
Again, predominantly geo mix driven due to the surge in demand to lower cost destinations and marginal increase in solos. From an EBITDA perspective, we delivered an adjusted EBITDA of EUR 21.8 million, which is a 19% increase compared to FY 2023. It is slightly ahead of where we had guided the market. We delivered an EBITDA margin of 24%, up 4% versus FY 2023. Slightly ahead of the full year guidance we had given of circa 20%. We delivered an adjusted earnings per share up 41% to 13.97 cents. Looking at our balance sheet and looking at our performance from a cash perspective, we started the year with EUR 7.5 million of cash. We recognized EUR 92 million in booking revenue. Offsetting this was our direct costs, our paid marketing of EUR 45 million, and our operating costs of circa EUR 25 million.
We capitalized EUR 5.5 million of development labor costs and incurred lease liability costs of EUR 1 million. Combined with a negative working capital, interest, and taxes, this gets you to EUR 14.3 million in operating, investing, and financing cash flows. We prioritized our operating cash towards refinancing our balance sheet, repaying in full the EUR 10 million debt facility we had agreed with AIB in 2023. Two years ahead of schedule, we had repaid the remaining balance of EUR 7.5 million on that banking facility. We also repaid the balance on the RCF that we had drawn down. We commenced the payment of our warehouse payroll taxes to Irish Revenue. We owed EUR 9.4 million at the start of the year. We paid an initial deposit of EUR 1.5 million in May, and we now pay monthly installments of EUR 200,000 per month.
As Gary mentioned, we have EUR 6.2 million outstanding at the end of this year. In totality, this delivered a closing cash position of EUR 8.2 million and a cash conversion of 66%, down versus prior year driven by an increase in working capital. Here we are touching on our capital allocation and our outcomes for 2024 and what we delivered. As we said at the start of the year, we had a number of objectives that we wanted to achieve. I'm happy to say that we have achieved all of them. During 2024, we repaid in full all of the banking debt facilities. It was a three-year facility, and we had repaid it in full just after the end of the first year.
We returned the business back to being net cash positive, and we had agreed a repayment plan and commenced against that payment plan on the outstanding warehouse payroll taxes to Irish Revenue. As we've said before, this is a simple business model. It's a very scalable business. It's asset light, and it generates strong cash flows. We will be providing a comprehensive update on our future capital allocation policy in full at our capital markets day on the 29th of April, which Gary and I are very much looking forward to. Finally, to touch on ESG, ESG is really at the core of our Hostelworld culture and the broader hosteling category. Our biggest achievement in 2024 has been the launch of our Staircase to Sustainability framework, which we launched in February.
This is a bespoke sustainability framework, the first of its kind, designed specifically for the hosteling category, which adheres to the Global Sustainable Tourism Council standards. We've seen a really great response since it launched, with over 2,100 hostels displaying the sustainability badge on our platform and another 500 hostels currently undergoing sustainability assessment. Our customers can now search for hostel accommodation solely based on sustainability search criteria. 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 are all celebrated. Here in Hostelworld, we take responsibility for our own sustainability practices. 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 1 and 2 carbon emissions.
We ourselves work to build a strong culture, embedding DEI principles, for which we were awarded the Diversity, Equality, and Inclusion Special Recognition Award at the Diversity and Tech Awards. With that, Gary, I'm going to hand back to you.
Thank you very much, Caroline. Now we're going to go into the strategy update section. During 2024, we continued investments in our social platform. If we turn to the first screenshot on the left, in the second half of the year, we launched a new streamlined profile creation process. Broadly speaking, this has contributed to a 20% increase in full profile completion rates. I'd add that this is a really important foundational part of the platform in terms of matching people to people and people to groups to deliver on our mission of helping travelers find people to hang out with.
In that vein, turning to the second screenshot, when you open the homepage of the app, if you have a booking, you'll see a carousel of travelers who will be in the same destination when you are there, in this case, in Barcelona. In Q3, we launched our first matching algorithm, which orders the travelers' profiles based solely on their past engagement with the social network. By Q4, we saw a twofold increase in the numbers of messages sent to travelers appearing in the carousel by users, and actually a similar increase in response rates. Even with this basic matching algorithm, we are seeing a significant increase in engagement. Finally, turning to the third screenshot, as Caroline mentioned, we enhanced the chat rooms with search and filtering tools for message content and streamlined the reply function.
Overall, these changes have significantly improved the response rate to open chat room messages like the one you see on the screen. We've seen that replies to initial messages sent have been increasing by one and a half times from the second to the fourth quarter. Going forward, and as we'll discuss more fully in the capital markets day, we see really exciting opportunities to significantly enhance the user experience on our social network with AI. There will be a lot more exciting things to come on that topic on April 29th. Obviously, another key part of our strategy is expanding the range of inventory that we have on the platform for our travelers. If I start on the supply side, as I mentioned earlier, we've been increasing the resourcing at regional offices, which is really to strengthen our local acquisition efforts.
have streamlined the sign-up process for new hostels on our platform. That led to a 16% increase in new hostels entering the pipeline and a 30% reduction in the time required to onboard them. We have also broadened the range of channel managers we support to make it easier for more hostels to directly connect with us. Finally, we have continued to make investments on our hostel events publishing platform, LinkUps. If we stay with LinkUps for a moment and turn to the screenshot in the middle, during the year, we focused on simplifying the platform's content loading and management functionality, adding features such as custom images, enhanced location, and automatic extension of recurring events. Overall, I was really pleased to see there were more than 40,000 individual events that were uploaded by our hostel partners during the year.
Overall, with the resourcing improvements, the product improvements, the investment in LinkUps, investments in the bespoke Staircase to Sustainability platform that Caroline mentioned, and indeed the ongoing investment in B2B marketing programs with Hostelworld hosted conferences in Chiang Mai in April, Copenhagen in September, and Mexico City in November, you know, overall, I was pleased to see a solid increase in our market coverage, which was 74% in 2023, rising to 77% in 2024. Just coming back to the social network. Overall, the objective of that social network is focused on delivering our mission, which is helping travelers find people to hang out with. What we've seen is when we deliver on that powerful and prevalent need, we see these customers becoming strong advocates for the Hostelworld brand.
In that vein, looking back at 2024, we've seen a notable increase in our customers sharing stories on all the major social media platforms like X or TikTok or Instagram, you know, in Apple and Google App Stores about how Hostelworld has helped them forge new friendships. These stories are very, very, very varied, and they range from people joining potlucks with fellow travelers in Vietnam or finding companions for pub crawls and gondola rides to solo concertgoers bonding over their shared love for Adele. I guess overall, providing a platform where people can meet new friends even far from home and facilitating lasting connections is an incredibly rewarding part of our work. Indeed, the whole team is proud to continue to enable these experiences every day. If we start with some of the social platform KPIs, a couple of new ones here.
I wanted to share that we passed the 2 million cumulative social members in Q4 last year, up from the start in April 2022 when we launched the social network. I think the important thing to remark here is that every one of these social members has made at least one booking on our platform. Put differently, every single one has been monetized. I guess this is in contrast to many other networks where the total number of monetized users is only a fraction of the total users quoted. I think in that regard, one of the topics we will be talking about at the upcoming capital markets day will be the introduction of free social network features, which we believe will be a nil cost feeder for this monetized cohort going forward.
If we look over on the right, I think another really important trend to call out is that we have a growing proportion of new online travel agent customers that are going directly to the app store to download the app and then making their first booking directly on our app. In 2022, that figure was around 21% of the new customer mix, rising to 26% in 2024, and it is still growing further year to date. I guess this speaks to a growing word-of-mouth effect when new customers are hearing about our social network and the wonderful things that it does and downloading it ahead of making their first booking on it. Of course, this has a knock-on effect in lowering our marketing as a percentage of net revenue.
In terms of usage of the social features, I'm pleased to report consistent and strong growth in active chat users, which in turn is driven by the growth in the proportion of bookings made by social members and also increasing volumes of posts per chat user. Now, looking at the middle chart, you may remember at the half-year mark, I mentioned that we exceeded the chat room capacity of our vendor, which we have since addressed, and that chat message volume is again increasing very strongly if you look at the second half 2024 bar. This is now significantly ahead of booking volume. Finally, looking at the right-hand side, as I mentioned earlier during the discussion around market coverage increases, we have continued to invest in the hostel events publishing platform called LinkUps, with over 40,000 individual events uploaded during the year.
This has resulted in over 80% of our customers being able to see at least one hostel event, a LinkUp, during their trip, and 75% now being able to see at least three. I'm also pleased to see that the user participation with the LinkUps platform continues to increase as we optimize the placement of LinkUps on the app. As I've mentioned, our social network penetration continues to rise, with social members accounting for 80% of all bookings on our platform in full year 2024. It continues to rise year to date. In addition, these members continue to be very valuable. New social members make approximately 2.2 times the number of bookings compared to non-members over the first 91 days post-acquisition. Indeed, they're 3.2 times more likely to make these bookings on our app.
Pleasingly, these stats have remained remarkably consistent since we launched the network back in April 2022. Consequently, the social element of the strategy has not only given Hostelworld a meaningful differentiation versus generalist OTAs and has attracted higher value customers, but the app-only implementation of that strategy has accelerated app bookings growth of 16% year over year versus a global average of 6%, with now 47% of bookings on the app and 61% via direct channels. Turning to the right, this in turn has served to reduce our marketing expenses as a percentage of revenue over time, now to the low end of our capital markets range back in November 2022 of between 45%-55%. However, also noting that we will always go for top-line growth where we see long-term profitable new customer acquisition opportunities.
This is a slide that we produce at each of our results to explain how the revenue retention builds up and compounds over time. I'll just take a minute to explain the chart before turning to look at the specifics for 2024. If you look at the bar 2017 as an example, the green bar above the dotted line is revenue that we have generated from new customers that we recruited in 2017. Those customers who come back in following years, their contribution can be seen with the green bar in 2018 and 2019. Thinking about revenue retention, revenue retention is the combination of customer retention rate, how many customers come back each year, their booking frequency, do they buy more over that 12-month period, and of course, the value of what they buy, which is impacted by ABV movements.
If you look at the actuals in 2024, you can see there is growing revenue retention year over year if you look at the height of the stacked bar below the dotted line, despite a year-over-year decline in ABVs of 8%. That really bears testament to the growth in customer retention and increased booking frequencies that are driven by our social strategy. To demonstrate that a little bit more clearly, I have added another column there, which is 2024 on a flat year-over-year ABV assumption. This actually shows exactly how much of the customer retention and booking frequency gain have contributed on a flat year-over-year ABV assumption. Again, you can see if you were to compare it with 2023, how much of an increase we are seeing and the compounding effect from our social strategy on revenue retention.
If we just have a look at market coverage in the context of market share. If I look on the left there, turning now to market coverage and market share, overall, the category year-over-year in terms of bed nights sold, we estimate it was broadly flat year-over-year. However, if you look slightly more deeply, you'll see that Asia bed nights were up, I would say, somewhere about 5%-6% versus our own booking growth of 25%-30%, really demonstrating that our particular cohort of travelers are incredibly price sensitive. Europe, which is a bit less than half the market, as Caroline talked about earlier, we think about slightly contracted and bed prices slightly declined by about 1%. Turning now to the market coverage, what I am pleased to see is our market coverage actually increased across every single region. Some regions more than others.
Asia was up 5%, South America up 6%, Europe was up 2%. Now turning to the OTA channel, we believe that the OTA share is still around the 50% mark. If you take that as an assumption, you'll see that the increase in booked bed nights from 2023- 2024 versus that category share of the overall category means that our market share would have gone from about 21%- 22%. Finally, I just add that one of the other topics we will address at our upcoming capital markets day will be how we are going to expand our addressable market, in particular where we believe our social network will continue to be a significant differentiator. There is more to come on that point on April 29th. I would talk about 2024 as really being a continuation of the execution of our growth strategy.
The investments in our social platform continue to drive solid app growth in 2024, and we're still seeing that continue year to date in 2025. We're still seeing encouraging ABV trends year to date, and they are ahead of the trends that we saw in Q4 2024. That is being supported by bed price inflation in Asia. I'm also really pleased to see that our multi-year core platform modernization program, which is migrating our legacy stack into a fully cloud-hosted, cloud-native architecture, will be pretty much complete in the first half of 2025. Therefore, the increasing focus this year will be on leveraging machine learning and AI technologies to enhance the customer experience, as I mentioned earlier, especially within the social network. Overall, we now have a strengthened balance sheet with a net cash position.
I think when you combine that with our growing social network scale, I think that this is going to provide us with a solid platform for future growth. On that note, we will look forward to presenting a detailed growth strategy and capital allocation update at our capital markets day on April the 29th. That concludes our presentation for today, and Caroline and I would be happy to take any questions. David.
David, you may just need to unmute to begin. David, just checking that you can please unmute yourself locally, and then you can begin with Q&A.
Good morning, everybody. David Brady here, head of commercial finance at Hostelworld. It's my pleasure to be here with you this morning. We're going to go through our Q&A. We're going to try and batch the questions. We've had lots submitted at this point.
We're going to try and batch them and group them as efficiently as we can to try and cover as much ground as possible in the time that we have. If there's any specific questions that we don't get to, we'll do our very best to follow up with people individually over the course of the coming days. For first question, Gary, I might start with you if that's okay. That's just at a high level, how do you contextualize that 6% bookings growth that we've seen this year in terms of what we've seen in the rest of the category and what we've seen more widely than with other OTAs?
Thanks, David. I think when you look at the hosteling category in the context of total global online lodging, it's about 1%.
I would sort of say the 6% growth that we've seen is faster than the category growth, which for us is the most important thing. That has led to the modest market share gain that we've called out in the presentation.
Thanks, Gary. Caroline, I might turn to you then for our second question, second discussion point. That is around the trends that we've seen with regional volume, regional trading, and then ABV and pricing as well. We might break that into two parts. Firstly, maybe can you comment on what we've seen in terms of high and low growth source markets, why we think that is, and what are maybe some of the trends there? Looking at ABV and pricing, we've talked about our trends in Q4 and Q1 year to date, and notably what we've seen in Asia there.
Is there anything else that we've seen or we can add to that around bed price inflation that we're seeing in Asia, how that impacts on our business and our expectations then as we look beyond Q1 this year?
Yeah. Okay. There's a couple of different parts of that question. Hopefully I'll cover them all, but do direct me if I've missed any. For 2024, one of the main stories of our performance is the geographic mix. Consumer trends very much moving towards price sensitivity. Something that our consumer is price sensitive, but we saw that really play out in the numbers in 2024 to an exceptional degree. The first half of the year, we saw an ABV headwind, an ABV contraction of 10% driven by geo mix.
That moderated somewhat in the second half of the year. On a full year basis, ABV contracting 8%. Of that 8% contraction, the largest singular component of that contraction was geo mix driven, with Asia having a record year. That is why we like to split out the analysis between source market and destination market, because it is easy to look at Asia and think, what has kind of almost happened in Europe or North America, Canada. Europe and European and North American Canadian customers are a hugely important market for us from a source customer perspective. In fact, 2024 represented the strongest year for us from a European source customer perspective. What that means is the largest year of European customers traveling in any year of Hostelworld history. Europe was very active for us.
It's just customers chose to go to those lower-cost destinations where their money would go further. As a result of that, we saw regions such as the U.S. and Canada and Oceania having a lower demand than we would have expected. Look, U.S., Canada was flat from a source perspective and down from a destination perspective. We really saw those customers, Oceania, U.S., Canada, going from those regions and not traveling to Europe as they would have at the same degree in 2023, instead going to Asia. Asia saw double-digit growth across all source markets into Asia. That has had kind of the distortion on the bed price and on revenue. There are other components as well that feed into ABV.
Aside from geo mix, it's the number of solo customers we have, the number of packs per booking, the bed nights that they book, commission rates that we charge, the length of stay, etc. It is a myriad of different things. Geo mix has been the biggest one last year. We also saw a slight headwind from an increase in solos. As we said in the statement in January and again this morning, that bed price improvement that we saw towards the latter part of last year in Asia in particular has continued, while there is some element of a geo mix because, again, Asia is performing so strongly. It has moderated as we've progressed through the year.
Thanks, Caroline. Gary, I'm going to turn to you with our next question.
We've had lots of comments and questions about this, and that's generally in the area of our social network. 2024, very clearly a year of landmarks. We reached 2 million members of the social network, reached 80% of total bookings now coming from social members. In a nutshell, really, what people want to know is what's next? What are the plans for growth? And maybe specifically, can you touch on some of our thinking around new features? Might we change the access that people get to the social network around the booking window that's there at the moment? Could there be potentially access to non-customers? Questions like that coming through at Think and Fast. And maybe can you comment about any investments that might be needed to unlock some of these plans?
Thanks, David. Yes, it was very much a year of landmarks.
We passed the 2 million member mark in Q4. It's important to note that when you think about that social networking in comparison with other social networks out there, those 2 million members are all paid members. They are all members who have made at least one booking with us, or indeed, many of them, several more. That's leading to the 80% penetration when we look at bookings made by the social members. That number is continuing to climb year to date. I think in terms of plans for growth, at our capital markets day, we will be unveiling and talking about new features that we're going to be building on top of that. There's a couple of ways of thinking about that.
One, today we have what I would class as being a fairly traditional social network built on profiles and on private messages and chat rooms, obviously heavily curated because we use the booking data to make sure that when you open up the app, the only people that you are going to see are the people who are going to be in the destination when you are. Having said that, last year, we started thinking about how much more information, how much more utility we could provide to the network if we put an underlying AI platform in that. As I've said to others, this is not sort of the sprinkling of the AI fairy dust. It's very much we have a huge volume of unstructured chat data that we've been amassing over the last two and a half years.
AI, just the nature of the technology, is amazingly good at creating meaning out of a ton of unstructured data. Without giving the game away and keeping my powder dry, there are lots of really exciting things that we will be talking about on April the 29th. Indeed, that will include new features that will speak to additional needs that are not covered by our current network. Those needs are needs that people have before they are actually in the booking phase. There are other needs that are out there where people are just generally thinking about, I might be thinking about going to this place. Does anybody want to come? Or I might be thinking about going to this place. Who else is going to be there? What we would term as upper funnel.
We think we've got some exciting product features that will speak to those needs. More to come. In terms of investments, the OPEX envelope that we've had thus far has done a tremendous job at building the network that we have today. We've already started investing in that AI underlying platform. There will be more investment. This is our principal differentiator. It not only provides us with a meaningful differentiation point for those people who are looking to find others to hang out with while they're traveling, but indeed, the app-only nature of the implementation means that when people do discover us and they make a booking, they download the app, we get more of those follow-on bookings on the app. That's led to a consistent downward pressure on marketing as a percent of net revenue. More to come.
Very excited about what we'll be talking about on April the 29th.
Thanks, Gary. I'll stick with you for our next question and actually just pick up on that point around marketing as a percentage of net revenue. Can you maybe help people think through how did some of the dominant trends of 2024 impact that marketing percentage of revenue, particularly with reference to the increasing mix of app bookings that we saw in 2024, and maybe how the regional shifts potentially impacted it as well? Is there any other notable external industry trend that impacted our marketing performance in 2024?
I would describe a way to think about marketing as a percent of revenue in a couple of ways. One, we don't do brand marketing. We will look at different ways of acquiring customers in the future.
More to come on that on April 29th. More generally, our marketing expenses are direct and driven by geographic mix. If more people are going to Asia, because that's where they want to go, then the bidding and the cost per net booking flexes with those ABV trends. That would be the first thing. All other things being equal, your marketing as a percent of net revenue would be flat period over period. It would just be that your revenue line would come down if more people go to Asia, but your costs would also come down. That percentage would stay flat.
Now, the second kicker is what I mentioned in relation to the prior question is a specific objective of the social strategy was also to bring down marketing as a % of net revenue by only putting the features in the app. As you'll have seen from the presentation, there's been a progression where marketing as a % of net revenue in 2023 was 50%. Last year in 2024, it was 46%. That's a consequence of getting more of our bookings on the app. I would also say, I know there was a question about the disparity between 80% of bookings made by social members versus circa 50% on app.
I would just say there is a stream of people that we acquire on web, and their first booking is made on web, then they subsequently sign up to the social network, and then their subsequent bookings are on app. That is the reason for that disparity.
Thank you, Gary. Caroline, I'll turn to you just with a couple of questions then around working capital and the fixed cost space as well. Just on working capital, you might maybe talk people through some of the components and the moving parts that we saw in 2024. Is there anything specific to call out for 2025? In relation to OPEX, clearly, again, another year of disciplined and tight cost control and a percentage of OPEX in relation to revenue was 27%. Any comments on the outlook or trends for that into 2025?
Okay. Yep. Thanks, David.
First question with regard to our free cash conversion. We had, on a full year basis, an adjusted free cash conversion of 66%, and that was down from 75% in the previous year. The main driver of that really is the movement in working capital. We went from a positive working capital movement in 2023 to a negative working capital movement and an increase in our working capital in 2024. Really, two drivers of that, one being an increase in our trade receivables, timing of our receipts from our payment processor in Stripe. Also, we or some suppliers agreed on prepayment terms to optimize the terms of the contract. Again, linking to your point around OPEX management.
In terms of our cost base, as you say, kept tight on costs, continue to manage that cost base and to make sure that despite the inflationary pressures and to absorb the impact of an 8% ABV priced climb, that our operating cost base remained at the same level as it had in 2023. 27% is a percentage of revenue. Keeping the operating leverage within the business despite this reduction in ABV. We've managed that, as you said in the presentation, through a number of different means, being as resourceful as we can with our headcount and hiring in low-cost destinations, using contractors, the culmination of both permanent headcount and contractors, that cost actually reducing year on year despite there being increased wage inflation and all other cost lines then, again, kind of continuing with that disciplined approach.
As we look forward into 2025, invariably, there will be an element of cost inflation, and that is something that every business has to manage against. Again, speaking to what Gary said, capital markets day, 29th of April, we're looking forward to talking to you all and giving you an overview of what to expect for 2025 and what the future looks like.
Thanks, Caroline. Gary, I'll turn to you with our final question and then a closing remark from you. Just before I do that, I just want to thank everybody for joining us on the call, submitting the questions. We'll see, hopefully, many of you over the course of the coming weeks on the roadshow and see you again on the 29th of April. Gary, that last question.
For many people, there was keen interest in 2024 to see how our cohort performance would hold up. There was an encouraging improvement in stickiness and retention in 2023, and people wanted to know, could that be sustained in 2024? How would you evaluate our performance from a customer cohort and retention point of view?
I'm super happy with the growth in what I would sort of call the recurring revenue. Ultimately, in creating that differentiator in the marketplace, you would expect each year more people to come back. For each of those customers who do come back, you would expect them to give them slightly more of your wallet or their wallet, I should say. From that perspective, the social strategy is delivering what we wanted it to be, which is a real differentiator.
As a consequence of that, every single cohort that we had in the past, after we launched the social strategy, we saw a notable step up in customer return rate and a step up in order frequency. Obviously, when you're thinking about revenue, that's affected by ABV. Hence, on the chart, I gave a normalized picture, which is on a flat ABV basis. The evidence is there to see. Obviously, as I talked about earlier, we've got some pretty exciting plans to invest more, some features, some upper funnel features, some AI-powered features. I would expect that trend to continue and hopefully build. Thank you, everybody, for joining us today. I might just put a few closing remarks about how we see 2024, 2025, and beyond. Ultimately, I look at 2024 as very much a job well done.
We achieved the financial targets that we set out to achieve. We made our consensus EBITDA. That gave us the cash to pay down all of our debt and move into net cash positive. We have a very small outstanding balance to the Irish Revenue, which is on a payment plan agreed with them. As we've talked about a lot, the social network now expanded to 2 million members, 2 million monetized members in Q4. It continues to grow. 80% of our bookings now made by social members. The combination of having a much stronger balance sheet, the strongest we've ever had since COVID, and that growing social network scale, that's very much our platform for future growth that we'll talk about at capital markets day.
During this tail end of last year and the first few months of this year, we've been building those AI-powered features in the background. That is really going to enhance its functionality. That is going to open up new avenues of growth, both in terms of adjacent markets, in terms of adjacent travel products. On that note, I very much look forward to unveiling those plans and the consequences economically of those plans on April 29th. Thank you very much.