Airbnbit is (ABNB -2.04%) business has rebounded significantly to pre-pandemic levels, especially in an interesting area. In this music video for “Ask Us Anything” on Motley Fool Live, recorded on July 1Fool.com contributors Rachel Warren and Toby Bordelon explain how long-term stays have contributed significantly to revenue.
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Rachel Warren: One of the interesting things is, for example, last quarter’s revenue was up 80% compared to the first quarter of 2019. One of the really enduring trends that I think ties into our discussion about that we got this Last 40 minute shifts in remote work are those long term stays, so stays of 28 days or more. That each quarter continues to be Airbnb’s fastest growing category according to TripLink. This continues to be true even compared to 2019, not just 2020 or 2021.
I think when I look at a company like Airbnb, would I want to pay that premium for another travel company, there are very few? The reason I like Airbnb and not have someone who had been particularly interested in travel spaces and investors personally before is that I think they’re not just a trips.
There’s been this discussion about how they’re kind of a masked tech company as a travel company based just on their platform. I think they cater to a very broad demographic that goes far beyond the average traveler. I think that’s what gives them a lot of opportunities in this space that other companies just don’t have.
Toby Bordelon: I will say on the PE issue, note that their revenue is not, although in the first quarter of this year they had a net loss. We might be looking at a 77 for PE I guess. With growing business ratings you just remember that they don’t always have income and they don’t always intend to have income as they reinvest in the business which is honestly a bad thing. It doesn’t necessarily give you great insight, and it’s not necessarily as relevant as it might be for a mature business.
But the great thing about them, you look at cash flow and they had operating cash flow and free cash flow of over a billion dollars for the first quarter of this year. They are making money again. If you look at the last two years you’ll notice they hit the pandemic and demand looked like a disaster for the first part of 2020 in terms of revenue numbers but they’ve had a massive rebound as you have note. We’re looking at comps for this quarter of 2019, higher gross booking value, higher revenue. It certainly looks very good for them in terms of getting back to where they need to be.
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