Airbnb posts record profits as customers return to cities

Urban areas accounted for 58% of all Airbnb bookings in 2019, according to the company. For the last quarter, they represented 48% of the total. This figure increased by 27% compared to the same quarter last year.

The percentage may never return to pre-pandemic levels, the company’s chief financial officer, Dave Stephenson, said in an earnings call Tuesday night.

“It may never quite be because we see such strength in our non-urban areas,” Stephenson said.

The increase in revenue comes from a parallel increase in Airbnb’s offering available for booking. In other words, “demand continues to drive supply from a geographic perspective,” as a team of Morgan Stanley analysts led by Brian Nowak wrote in a note Wednesday morning.

Airbnb does not break down data for specific cities, but New York has thousands of short term rentals available for reservation via the platform. It also has a strict list of rules to follow, including a law requiring all operators to register with the city.

But regulatory headwinds has taken a back seat to other economic concerns, including whether consumers will cut back on travel spending due to inflation and the possibility of slowing growth or a recession.

Airbnb shares fell about 6% in premarket trading ahead of the opening of trading in New York, according to Bloomberg. The stock rose 2% to close at $109.05 in trading on Tuesday and was down 35% this year.

On the other hand, Chesky said, worries about household spending could generate more Airbnb hosts.

“Just like during the Great Recession in 2008 when Airbnb started,” he said, “people today are especially interested in earning extra income through accommodations.”

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