Airbnb is getting a boost from the rebound in travel
Airbnb sharply narrowed its first-quarter loss to $19 million, as the rebound in travel after two years of pandemic caused bookings to jump and revenue to rise 70% from a year ago.
The short-stay home-rentals company predicted Tuesday that revenue in the second quarter will top Wall Street expectations. It said bookings are strong for summer and the year-end holidays, and that international bookings by Americans are running ahead of their pre-pandemic pace.
“People are more confident booking travel further in advance, and we’re seeing strong demand for summer bookings and beyond,” CEO Brian Chesky said on a call with analysts. “We are also seeing guests return to cities and cross borders at, or even above, pre-pandemic rates.”
However, rising prices that have long helped Airbnb may be easing. The company said average daily rates rose only 5% from a year ago because there were more urban rentals with relatively lower prices, and rates in the second quarter will be flat from a year ago.
Still, Airbnb forecast second-quarter revenue of between $2.03 billion and $2.13 billion — above analysts’ predication of $1.96 billion, according to a FactSet survey.
Chesky’s remarks echo comments from U.S. airlines and other travel businesses, which expect revenue to surge this summer as people resume traveling after being cooped up much of the past two years. Expedia CEO Peter Kern said Monday that his company was “feeling very good about a summer recovery that should be very robust.”
Airbnb said the possibility of future COVID-19 outbreaks, the war in Ukraine and inflations pose risks to its business.
Last week, Airbnb said on its website that it was tightening its cancellation policy — it will no longer accept “COVID-19-related circumstances” as a reason for a refund for bookings made on or after May 31.
The company said it was making the change because of widespread vaccinations in most of the world and “this new way of living” with the virus.
Airbnb said nearly two-thirds of listings on its site let visitors cancel at least five days before check-in and get a full refund. It also said consumers can filter a search to find listings that allow free cancellations. Airbnb suggested that customers consider travel insurance — a product that the company plans to sell “in the coming months.”
On the home front, Chesky told Airbnb employees last week that they can work from just about anywhere without having to take a pay cut.
Earlier in the pandemic, Airbnb benefitted by offering consumers the chance to work from somewhere other than home or office. Bookings surged to less crowded places like beach and mountain towns, and long-term stays increased.
The first-quarter loss was a sliver of the $1.17 billion loss that Airbnb suffered a year earlier, when it took $782 million in write-downs on loans and office space in San Francisco.
Revenue rose to $1.51 billion, 80% higher than in pre-pandemic 2019. That was driven by more than 100 million nights and experiences booked, a quarterly record.
On a per-share basis, the loss was 3 cents. Analysts expected the San Francisco-based company to lose 25 cents per share on revenue of $1.45 billion, according to FactSet.
Shares of Airbnb Inc. rose 5% in after-hours trading. They had dropped 5% during the regular session.