The Group's financial performance is largely dependent on the wider availability of, and demand for, travel services.

Travel services are enabled by the freedom of movement of people nationally and internationally without prohibitive restrictions. Moreover, it is supported by affordable air, ferry and train fares at significant scale, and similarly good access to affordable accommodation.

The demand for travel services is influenced by a range of macroeconomic circumstances and their impact on consumers discretionary spending levels. Economic activity, employment levels, inflation, interest rates, currency movements and access to credit are among the factors that can impact travel demand.

We're an innovative technology group relying on advanced software and infrastructure, which means we can be exposed to cyber security threats. Protecting our e-commerce data and customer information is crucial.

Our hybrid model, global contractors, and evolving social strategy heighten data security challenges.

Cloud migration finished in 2022, but cloud security risks persist. Technological speed and legislation gaps can complicate compliance with guidelines and laws. GDPR adherence and secure, scalable IT platforms are vital.

The Group is susceptible to cyberattacks, which can impact system integrity and data security. Hackers' sophistication is constantly evolving, complicating risk management.

Cloud migration adds further cyber security challenges, potentially compromising customer and proprietary data. Third-party vendors or contractors can also be entry points.

Inadequate skills internally might risk cloud data exposure and insurers could limit coverage for cyber security incidents.

The Group relies on skilled, committed, and motivated employees for strategic success. However, the decision to maintain a stable headcount and not replace roles to pre-COVID-19 levels, combined with the transition to largely remote working may affect morale.

The Group is dependent on attracting and retaining key roles in engineering, quality assurance, product management, and data roles to facilitate projects and maintain product infrastructure. These roles can be hard to fill due to location flexibility and competitive market demands.

Failure to meet industry standards in rewards could lead to attrition, lowered morale, business risks, damaging reputation, and productivity.

Direction of change: Decrease in overall risk in the current year evidenced by low attrition levels and the Group being a more attractive proposition for new talent given the recovery in the business post COVID-19.

The Group's activities expose it to a variety of financial risks. The Group's revenues and costs are impacted by rising inflation rates, which may also deter our customers from travelling.

Foreign exchange movements may impact travel decisions and travel patterns by customers, as travel from one market into another (operating with a different currency) becomes more expensive. Furthermore, the Group is exposed to translation risk which occurs if the Group has a surplus or deficit in a foreign currency which changes in value over time.

The Group has a 3-year finance facility in place with Allied Irish Banks, plc comprising of a €10 million term loan, a €7.5 million revolving credit facility ("RCF") and an undrawn €2.5 million overdraft. The term loan and RCF each have an initial interest rate payable of 3.75% over EURIBOR, reducing to 3.25% where the ratio of net debt to adjusted EBITDA is less than 2 times and, 2.65% where the ratio is less than 1 times.

The facility includes a customary security package and financial covenants. The Group must deliver a certain level of financial performance to meet its repayment and covenant obligations.

Competition risks could harm market share and growth. Competitors willing to operate at a loss pose challenges. Price influences consumer decisions, requiring competitive pricing, discounts, and flexible cancellation policies.

Competition might lead to losing key suppliers. Large market players and disruptive new entrants pose risks. They may absorb revenue losses and/or additional costs to compete on price or bidding strategy, their ability to grow core inventory base (both in terms of property count and destination coverage), and their ability to enhance product features faster through depth of resources.

Changes in technology, such as AI or other, can impact the Group both positively and negatively.

Changing customer behaviour, such as preferring private rooms (as seen during COVID-19), could reduce demand or raise acquisition costs.

Exclusive supply to competitors, new Digital Markets Act regulations, and evolving market dynamics may influence the competitive landscape and affect the Group's positioning in the market.

Over recent years the ever-increasing pace of change of new technology, new infrastructure, and new software offerings have changed how customers research, purchase, and experience travel. Notable shift changes include AI, mobile networks, mobile applications, meta-search providers, display advertising, and social communities.

Unless we continue to stay abreast of technology innovation and change, we risk becoming irrelevant to the modern customer. Technology evolves rapidly, and updates can become quickly obsolete.

As new products and features are offered the relevant cybersecurity controls must keep pace or risk new exposures.

We rely on hostel accommodation providers to supply us with our inventory. Any constraints upon the supply of hostel inventory may stem growth ambitions.

Revenue depends on connected hostels and third-party channels; lack of updates or outages may cause competitiveness loss.

Financial pressures on partners risk business closure or category shift.

Relying on third parties for systems poses revenue and functionality risks, affecting customer service and brand.

Maintaining relationships with payment processors is crucial, as fee changes or unfavourable terms could impact transactions.

A significant portion of our website traffic comes from search engines, both through organic and paid searches. We rely on Search Engine Optimisation and Search Engine Marketing for visibility.

Search engine algorithms, like Google's, constantly change, affecting our placement and costs. AI-powered platforms are further influencing search results, making algorithm management and optimisation crucial for our marketing strategy and efficiency.

Increasingly, internal and external stakeholders are focused on the Group's response to climate change. There is a request for more accountability from our customers, employees, and other stakeholders as to what the Group is doing to limit its direct and indirect impact on climate change. There is a risk that we do not meet shareholder expectations regarding our target setting and performance against creating a more sustainable operating environment.

Listing rule developments require reporting on climate disclosures (by virtue of TCFD).

There is a risk that the Group is perceived as not being transparent in its reporting. Physical climate change risks such as extreme weather events could affect our inventory competitiveness and results of operations. In addition, transitional climate change risks such as changes in stakeholder expectations, travel patterns, technologies, and policy and regulation may affect the Group and results of operations.

Direction of change: Increased risk driven firstly by increasing regulations that the Group will have to comply with such as the EU Corporate Sustainability Reporting Directive and secondly the unknown impact climate change can have on our business if not managed. Physical impacts of climate change such as drought, heatwaves and warming oceans will impact our hostels and our trade.

The emergence of a global pandemic (similar to COVID-19) could result in national or international lockdowns, risk to the health of our employees and customers, and consequential negative impact on economic activity.

Deterioration in the financial condition, restructuring of operations or limited resource availability at one or more key stakeholder in our supply chain eco-system could impact our growth.

The threat of terrorist attacks in key cities and on aircraft in flight may reduce the appetite of the leisure traveller to undertake trips, particularly to certain geographies, resulting in declining revenues. Geopolitical conflicts, climate change, natural disasters, or other adverse events outside of the control of the Group may also reduce demand for or prevent the ability to travel to affected regions.

Direction of change: Decrease driven by recovery in business from the impact COVID-19 had on our business.

The Group faces regulatory and legal challenges in its global operations.  We are exposed to issues regarding competition, licensing of local accommodation and experiences, language usage, web-based trading, consumer compliance, tax, intellectual property, trademarks, data protection and information security and commercial disputes in multiple jurisdictions.

It's crucial that the Group complies with the Task Force on Climate-Related Financial Disclosures and stays abreast of evolving sustainability regulations. 

The Group is subject to various regulations, including payment card association rules, the EU Package Travel Directive, and rules on cookies usage (impacted by GDPR and ePrivacy Directive). The Digital Services Act also imposes content moderation and transparency obligations.

Increased scrutiny of the mechanisms to transfer personal data to third countries such as in relation to the EU-US Privacy Shield and Standard Contractual Clauses create uncertainty in relation to international transfers of personal data.

The California Privacy Rights Act introduces new privacy requirements. New sign-up regulations, like DAC 7 EU Tax directive, may slow operations, impact property categorisations, and result in closures due to changing local laws. Ongoing legal developments pose potential constraints, compliance costs, and business harm for the Group.

IT system failures, including third-party services, could disrupt bookings, payments, and administrative services.

Weakness in business continuity planning ("BCP") may lead to major service disruption. Aging technology poses reliability, security, and feature delivery challenges.

Sole reliance on one cloud provider region risks business impact from data centre outages.

Reduced brand marketing spending is likely to have impacted brand recognition and trust.

Cyberattacks and poor customer experiences (with our hostel partners and our services) pose reputational risks.

False claims about diversity, equity and inclusion or sustainability could damage reputation.

Response to geopolitical developments and improper user actions could also affect brand integrity and the business.

Indirect taxes are a growing area of complexity with different regimes and rules in place in countries where the Group does business. Measures introduced include digital services taxes to address multinational businesses operating without a physical presence in Europe, and DAC 7 which requires digital platform operators to collect and report information on sellers, with penalties and potential lost revenue for non-compliance. There is a risk that the Group does not stay ahead of compliance in all jurisdictions in which it operates. In addition, changes in tax legislation such as the European Commission's proposals in relation to VAT in the Digital Age, interpretations, or OECD recommendations may expose the Group to additional tax liabilities.

Due to the increasing global workforce footprint of the Group, a tax authority may consider a permanent establishment to exist in a country by virtue of some activity being carried on there.

Key functions, assets or risks undertaken/managed outside of Ireland may cause tax leakage. If tax authorities take a different view than the Group as to the basis on which the Group is subject to tax, it could result in the Group having to account for tax that it currently does not pay. This may increase the Group's effective tax rate, increase tax cash outflows, and increase the costs associated with tax compliance.