Ray Nolan and the WRI (Hostelworld) Sale

[Hostels]

Techcrunch covers more on Ray Nolan and the WRI (Hostelworld) sale:

• WRI selling price was "about $340 million"
• Ray Nolan "was able to bank about $100 million" over the past 10 years
• Hostelworld was nearly sold to Priceline or Expedia
• "Though he is involved in some way with about 10 tech start-ups, Nolan currently has four major interests: CloudSplit, Asavie.com, Worky.com, and RevaHealth.com."

Quotes:

[Ray Nolan is] disappointed the IPO never happened however, as he says WRI “would have been a great candidate. It has great demographics, 20 and 30 something travellers, and there’s a lot of possibility upselling to that demographic.”

He adds: “When I left (as CEO), we had a 65 per cent EBITDA margin.” He thinks it likely that WRI’s new owners will hang on to it until the market improves, and then take it public.

Full article here.

[santa klaus]

LOL about RevaHealth. It looks pretty much like Hostelworld, but instead of a bed you can book a boob job or root canal work - anywhere. Even the rating system is almost the same, though unfortunately you can´t give your dentist a fun rating.

That one would be a candidate for the "most fun dentist worldwide" Hos... err, Doscar!

[HostelOffice]

Somewhere in these threads there was discussion about the impact of the new tax laws in the EU for agents such as HW. Below is a bit more info that is just another argument for having your own website that is not supplied to you by anyone else with a booking engine not funneling funds across borders unnecessarily:

Place of supply

According to the EU directive services to business customers will generally be treated as supplied where their business is established.

For services to non-business customers the place of supply will be where the supplier’s business is established, which generally means the country of incorporation.

In certain cases the place of supply is determined differently: for example, services linked to real estate (including accommodation services) are treated as supplied where the property is situated (article 47 of the directive).

For example, am Agent company provides intermediary services in making hostel reservations elsewhere in the EU, collects a fee from the customer, then transfers it to the hostel. In addition to the hostel charge, the Agent company also collects a commission for the reservation. However, the directive is silent as to whether this commission is:

a service linked to real estate, or
an intermediary service.

Either case has a substantially different VAT treatment: in the former case VAT is payable where the hostel is situated; in the latter case VAT is payable where the customer’s or supplier’s business is established depending on whether or not the customer carries on a business.

Germany, for instance, has expressed the opinion that hostel reservation services are governed by article 47 of the directive, i.e. the place of supply is where the hostel is located. This interpretation is hard on suppliers, who are then required to register for VAT in each member state where they make hostel reservations.

Other member states, such as the UK, believe that reservation services are governed by the main rule: reservations for non-business customers are treated as supplied where the supplier’s business is established; the place of supply in reservations for business customers is where the customer’s business is established.

These differences of opinion may result in a service being taxed twice or not taxed at all. For example, a UK travel company books a hostel in Germany for an individual. The individual will have to pay both German and UK VAT on the booking service because German law treats it as supplied where the hostel is located (Germany), while the place of supply under UK law is where the supplier’s business is established (UK).

Although the directive applicable currently does not deal with the place of supply for accommodation services, in practice these are treated as supplied where the hostel is located. So the VAT treatment of hostel reservation services (intermediation or real estate) is an item on the agenda of the European Commission, with the next round of discussions scheduled for December.