Airbnb posts $1.2 billion Q3 profit as revenue jumps 29% – FOX13 News Memphis

Airbnb reported record third-quarter profit of $1.21 billion as bookings and average daily rates increased, and the company said on Tuesday demand for short-term rentals remained strong despite economic uncertainty.

However, earnings were still below Wall Street expectations and the company said booking growth would slow in the fourth quarter, while average daily rates would also come under pressure.

Airbnb shares fell 4% in extended trading.

Third-quarter profit, compared with $834 million in the same quarter last year, was $1.22 per share. Analysts were expecting $1.47 per share, according to a FactSet survey.

Revenue jumped 29% from a year earlier to $2.88 billion, slightly above analysts’ forecast of $2.85 billion.

Airbnb shares have fallen nearly a third this year despite the travel recovery, a highly profitable first half and continued upbeat comments from CEO Brian Chesky and other business leaders.

Most of the share price decline has occurred since early May. Investors fear that rising prices for basic commodities, including housing, food and gasoline – as well as fear of recession – will push consumers to cut back on discretionary spending like travel.

However, Airbnb may face a more fundamental threat – a perception among many guests that bookings on the site are no longer a good deal due to high cleaning fees and misleading listings.

Chesky tweeted last month that “the cleaning fee was never intentionally designed which is why we are now catching up. This is one of my top priorities – we are rethinking how pricing works on Airbnb”.

Tenants have posted photos of detailed lists of chores required by hosts. Dissatisfaction goes both ways – hosts are increasingly complaining about problem tenants.

Airbnb has been fighting a long-running battle to crack down on partiessome of which have ended in shootings. The company also faces more efforts from local residents and governments to regulate the short-term rental market.

Many major cities in the United States and abroad have added costly permit requirements to operate a short-term rental, and they are fining landlords who don’t follow the rules. The trend is spreading to small towns. Officials in the Dallas suburb of Plano are considering tougher rules after a case of prostitution at an Airbnb in a residential area.

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