Airbnb’s business is booming — and rates are rising

Airbnb reported more than 100 million bookings during the first quarter of this year, a record for the company that underscores the turnaround from when its business was decimated in the early months of the pandemic. The resurgence in demand has sent the company’s rental rates to new heights as well. The home-sharing platform posted revenue of $1.5 billion, up 70% compared to the year prior and exceeding the $1.45 billion expected by analysts surveyed by Refinitiv. The revenue also marks an 80% increase from the same quarter in 2019, the last quarter before its business was hit by the pandemic. Airbnb posted a net loss of $19 million, down from a loss of $1.2 billion the same quarter in 2021. Airbnb said in a letter to shareholders that the revenue growth was driven by increased bookings, as well as “continued strength” in average daily rates. Airbnb said the average daily rates in the first quarter were $168, a 37% increase compared to the same quarter in 2019, pre-pandemic, and 5% compared to the first quarter of 2021. Shares in Airbnb rose more than 5% in after-hours trading, after dropping 5% during normal hours. Airbnb attributed the growth in rates compared to the pre-pandemic period partly to more bookings in “North America entire homes, and non-urban destinations,” which tend to have higher rates. It said the increase from last year “was entirely driven by price appreciation.” On a call Tuesday to discuss the earnings, CEO Brian Chesky noted that the platform has offerings “at all price points,” and CFO Dave Stephenson added that Airbnb is “just not seeing price appreciation impact our business negatively,” and similarly cited the “diversity” of its offerings. The company said the gains in its business come “despite the ongoing pandemic, the war in Ukraine, and macroeconomic headwinds.” Airbnb noted in its shareholder letter that more than 34,000 people have signed up to offer homes to refugees fleeing Ukraine through the company’s philanthropic arm, Airbnb.org. The company announced in late February that it would offer free, temporary housing for up to 100,000 Ukrainian refugees. When Airbnb made its Wall Street debut in December 2020, it was the beginning of a remarkable comeback following the pandemic’s initial devastation to its business, which led it to cut a quarter of its workforce. The company’s revenue grew 25% in 2021 compared to the year before the pandemic. In its letter to shareholders, Airbnb said it expects to post revenue upwards of $2 billion in the second quarter, which includes the start of the summer travel season. On Tuesday’s call, Chesky said that while last year was “probably the travel rebound of the century … I think this year is going to be even bigger,” citing the emergence of new strains of the coronavirus towards the later part of 2021 that affected demand. Chesky said he’s focused on capturing “as much market share as possible,” including getting people who haven’t traveled since the start of the pandemic to book with Airbnb. The company has also teased changes to its product that it will announce at an event next Wednesday. In January, Chesky said he’d thought the biggest travel trend in 2022 will be “people spreading out to thousands of towns and cities, staying for weeks, months, or even entire seasons at a time.” The company said Tuesday that long-term stays of 28 days or more continued to be its fastest-growing category when compared to 2019 (however, such stays were down 24% compared to the first quarter of last year). Airbnb said that nearly half of all bookings were for at least seven nights. Last week, Chesky informed staffers that they won’t be required to return to the office -— ever — if they chose not to, freeing them up to live a more nomadic lifestyle. Chesky said on the earnings call that he thinks “flexibility is here to stay,” a trend he no doubt sees as beneficial to Airbnb. Chesky said he believes that, after compensation, flexibility is one of the most important ways companies will be able to attract talent.