Why Airbnb gained 13% in March

What happened

Shares of Airbnb (ABNB 4.77%) were among the market gainers last month, ending up 13% according to data from S&P Global Market Intelligence.

There was no major news that lifted Airbnb shares, but several different elements contributed to the gains. Like other growth stocks, Airbnb fell in the first week of the month on broader fears about the economy, but the travel stock rebounded strongly in the second half of March.

ABNB given by Y-Charts

So what

Russia’s invasion of Ukraine generally sent travel actions decline, although none of these countries is a major travel destination. However, the war has highlighted some features of Airbnb. First, the company has set itself the goal of welcoming 100,000 Ukrainian refugees. Airbnb has used its platform to help people in other emergency situations; for example, connecting health workers with hosts during the pandemic. No other platform has the number of hosts that Airbnb has, and its mission also separates it from more conventional travel booking sites like Reserve credits.

An Airbnb in an Airstream trailer under an awning.

Image source: Airbnb.

Airbnb was also surprised to find that its site was being used to make charitable donations to Ukrainian hosts to show their support, another way Airbnb is connecting people.

As the market stabilized in the second week of March, Airbnb stock began to recover, boosted by the end of mask mandates in several states as COVID-19 case rates continued to rise. decline, a bullish signal for the travel market as it approaches the peak of the summer season.

Also, unlike most growth stocks, Airbnb could actually benefit from higher interest rates because the company earns interest on the cash it holds between when reservations are made and when they are paid.

Now what

Airbnb is also different from most growth stocks in another way. While most tech stocks have benefited from the pandemic, Airbnb, like the rest of the travel industry, has been negatively impacted. However, Airbnb has outperformed the rest of the travel industry with model flexibility, and the company looks set to thrive in 2022 as long as there isn’t another wave of coronavirus.

Looking ahead, management said they are encouraged by what they see in the travel market; it expects to post a new record for room nights and experiences booked in the first quarter, a category that has lagged its recovery in revenue and gross booking value.

Given its competitive advantage and the recovery of the travel industry, Airbnb looks set to continue making gains this year.

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