Airbnb shares surge after record quarter on travel rebound

Airbnb Inc. shares surged on Friday after the company reported record sales and profits, proving the vacation rental giant’s resilience even as the delta variant of COVID-19 sparked new concerns and restrictions of travel.

Revenue rose 67% to $ 2.2 billion in the third quarter, Airbnb said in a statement Thursday. Analysts are forecasting $ 2.07 billion, according to data compiled by Bloomberg. Net income of $ 834 million significantly exceeded Wall Street’s expectations of $ 456.2 million. Shares jumped 12 percent, the highest since February, to US $ 200.52.

The San Francisco-based company warned in August that the number of nights and experiences booked in the third quarter, typically the busiest time of the year, would be lower than the total during the same period in 2019, due to of the resurgence of COVID cases. . But Airbnb, which dominates the alternative accommodation market, generally fares better than its competitors, taking advantage of the fact that people have chosen to travel closer to home and have often booked longer or more frequent stays to take advantage of flexible remote work policies. In September, Airbnb announced that it had welcomed its billionth guest.

CEO Brian Chesky said the new travel trends born out of the COVID era are likely to stay. “But something bigger than a rebound in travel is happening,” he said in a letter to shareholders. People “can now work from anywhere, travel anytime, and stay longer. For those who can work remotely, we believe flexibility will be the most important benefit after compensation. ”

The industry was plunged into a deep crisis early in the pandemic when lockdowns, except for ground travel, were halted. Chesky was forced to cut thousands of jobs, put non-essential projects on hold, and even consider freezing the company’s IPO plans. Airbnb has a comprehensive refund policy in place and distributed over $ 1 billion in cancellation fees. At the start of last summer, things were starting to improve and this spring Airbnb unveiled a major service overhaul in an effort to woo hosts and guests amid a wave of post-pandemic travel.

Airbnb said it was “encouraged to see these new travel trends extend beyond the peak in summer travel and expects a strong fourth quarter.” At the end of September, Airbnb’s backlog had over 40% more nights booked for Thanksgiving week in the United States compared to 2019.

Airbnb said it expected fourth-quarter revenue to be between $ 1.39 billion and $ 1.48 billion. Analysts were looking for US $ 1.43 billion.

Analysts at Cowen Inc. estimate that the alternative accommodation category has grown to around 33% of global accommodation dollars, up from 24% before the pandemic. And Airbnb orders over 50% of those bookings. In a report ahead of Airbnb’s earnings release, analysts said they expected the alternative accommodation category to keep most of its pandemic gains, somewhat tempered only by the possible upturn in travel. business-oriented hotels.

Airbnb said gross bookings, which include nights booked and experiences, more than doubled to $ 11.9 billion. But that missed Wall Street’s estimate of $ 12.2 billion. Earnings before interest, taxes, depreciation and amortization, excluding certain costs, were US $ 1.1 billion. Earnings per share were US $ 1.22, beating the 77 cents analysts had predicted.

Airbnb is set to see further surge in demand after U.S. travel restrictions were lifted to the country on November 8, but it also faces fierce competition from rivals.

Earlier this week, online hotel reservation site Trivago posted strong results and reported that vaccine advances in Europe and the Americas are increasing travel. Booking Holdings Inc., Airbnb’s biggest rival, had a strong third quarter with gross bookings up 77% from a year ago. Expedia Group Inc., which owns the Vrbo home rental site, made a profit, a feat it attributed to “superior performance from Vrbo and domestic travel.”

In a conference call with analysts, Expedia CEO Peter Kern said Vrbo has seen strong market share growth, especially in the United States. He said more than half of his clients so far this year have been new.

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