Airbnb posts stellar earnings in Q1, as travels pick-up

Airbnb has reported better-than-expected second-quarter revenue and gives an upbeat forecast for the third quarter.

According to the company, revenues in the first quarter grew 70% from a year earlier, despite pandemic worries, “macroeconomic headwinds” and the war in Ukraine. A year ago, Airbnb’s net loss was $1.2 billion. The company’s loss dropped to $19 million this quarter.

The current quarter should continue to see strong growth. Analysts’ estimated revenue of $1.96 billion will be topped by $2.03 billion to $2.13 billion by Airbnb. This represents a 52% growth at the low end.

Booking risks, however, include “additional Covid outbreaks, any impact of the Ukraine conflict on travel and consumer price sensitivity.”

Key highlights of the result

  • According to Airbnb, the company booked 102.1 million nights and experiences during the first quarter, a record for the period prior to the pandemic. StreetAccount predicts that the number will be 100.87 million.
  • Further in advance bookings are also becoming more common with travelers. A 30% increase in bookings was recorded in the company’s summer travel season by the end of April compared to the same period last year.
  • Based on StreetAccount data, Airbnb’s gross booking value used to track earnings, service fees, cleaning fees, and taxes, topped Wall Street’s estimate of $16.54 billion in the first quarter. That’s an increase of 67% year over year.
  • The average daily rate increased 5% to $168 from $165 a year earlier. During the second quarter, the company anticipates flat ADR compared to the previous quarter.

“An ADR that remains stable in Q2 indicates that increases in nights and experiences booked will reflect GBV growth in the second quarter, both year-over-year,” the company said.

The Covid-19 pandemic has caused people’s work and travel habits to change. Airbnb has benefited from this. With the advent of remote working options, employees were no longer bound to their desks, and many organizations still use work-from-anywhere policies.

Airbnb announced last week that its employees would be able to work from anywhere in the U.S. Employees will also be able to live and work in more than 170 countries for up to 90 days each year.

Airbnb reported that longer stays of at least 28 days remained its fastest-growing segment based on trip length compared to 2019.

The first quarter was dominated by them, accounting for 21% of gross bookings.

“The vast majority of companies do not require employees to work out of an office five days a week,” CEO Brian Chesky said on a conference call with investors. “We expect to continue to see growth in long-term stays in the coming years.”

An update was also provided on the company’s humanitarian efforts in Ukraine. As many as 100,000 refugees fled the war with free temporary housing provided by Airbnb. In Europe, Airbnb has provided temporary accommodation to over 14,000 people, and more than 34,000 people have offered their homes to refugees, the company said.

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