Airbnb sees signs of rebound in travel; loss increases on debt payment

Airbnb Inc. topped analyst estimates for first-quarter bookings, reflecting pent-up travel demand after a year of COVID-19 restrictions. But the lingering effects of the pandemic could still be seen as the company’s loss skyrocketed, due to the repayment of debt it incurred at the height of the crisis.

The San Francisco-based company, which went public in December, recorded $ 10.3 billion in gross bookings in the three months ended March 31, a 52% increase from the previous year and well beyond the 7.57 billion dollars forecast by analysts. Revenue rose 5% to US $ 887 million, also beating analysts’ forecasts.

“While conditions are not yet normal, they are improving and we expect travel to rebound unlike anything we’ve seen before,” the company wrote in a letter to shareholders accompanying the results. Airbnb has not released an official outlook for the current period, citing the continued impacts of COVID-19, but said it expects gross bookings to be above 2019 levels and trends in April have improved compared to March.

“We didn’t expect the gross value of bookings to be as strong as it was,” Airbnb chief executive Brian Chesky said in an interview with Bloomberg Television after the results were released. “We were expecting a strong quarter, but a travel business would really grow in the midst of a pandemic, which was certainly a very good scenario for us.”

When people over the age of 60 in the United States became eligible for vaccinations earlier this year, Airbnb saw bookings for that age group jump 60%, Chesky said, adding that the next rebound in trips will be “unlike anything you’ve seen in a century”.

Airbnb shares have fluctuated under extended trading after closing down 3.2% in New York City at $ 135.75.

The surprisingly positive results reflect a strong recovery from a year ago, when Airbnb bookings plunged 80% after the coronavirus shutdown in most countries. Travel was one of the sectors of the economy hit hardest by the pandemic, but Airbnb saw a faster recovery than its peers when city dwellers began to abandon their city apartments in favor of longer stays in the city. rural rentals. Domestic leisure travel continued to increase this year as vaccination rates increased in the United States, with some analysts expecting Airbnb to revert bookings to pre-pandemic levels by the time ‘summer. “We want to see if we are heading towards post-pandemic normalcy,” said Ivan Feinseth, analyst at Tigress Financial Partners, in an interview ahead of the release of the results.

Before the pandemic, alternative accommodation or non-hotel accommodation in which Airbnb specializes was already the fastest growing segment of the travel market and is now leading the rebound. Last week, Booking Holdings Inc. and Expedia Group Inc. reported better-than-expected first quarter results, supported by demand for vacation home rentals in the United States. to accept Airbnb during the high summer season. Booking’s quarterly revenue fell by 50%, while Expedia’s was down 44% from the previous year.

Airbnb is fighting to keep its first place. In February, the company launched its biggest marketing campaign in five years with the goal of recruiting more hosts and said it was already attracting new customers to its platform. Later this month, Airbnb will unveil a platform upgrade, which promises to streamline the process of becoming a host.

Almost 60% of Airbnb’s revenue came from the United States, where vaccines are now widely available, the company said. Customers are taking advantage of remote work policies and choosing to travel to non-urban areas and stay longer: Almost a quarter of Airbnb bookings in the first quarter were for stays longer than 28 days, an increase of 14% from 2019. Reservations in North America, primarily the United States, reached levels above 2019 in the first quarter, the company said.

However, other countries are still struggling to contain COVID-19. India reports 4,000 deaths a day, while the vaccine rollout in Europe lags the United States and Australia has said its borders could be closed to international travelers for another year. As countries like the UK and France announced reopenings and eased restrictions, Airbnb saw a sharp increase in bookings, the company said. “We expect the pace of the recovery in Europe to continue to be strongly influenced by the severity and duration of travel restrictions, but believe we are well positioned to benefit from the recovery as it eases.” the company said.

Releasing its financial results for the second time as a public company, Airbnb reported a net loss of $ 1.17 billion, or $ 1.95 per share, significantly higher than the loss of $ 341 million. US dollars a year earlier. Airbnb said this was due to the repayment of debt incurred by the company during the pandemic. In April 2020, Airbnb set up roughly $ 2 billion in debt financing to help it grow and pay its bills as travel demand was crushed.

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