Rising inflation may drive more families to become Airbnb hosts, its co-founder and chief executive said, as investors raised concerns over limited supply on the lodging platform as demand returns.
Airbnb on Tuesday said it expected bookings to rebound to pre-coronavirus pandemic levels for the first time in the current quarter after concerns about the Omicron coronavirus variant “quickly dissipated” and people become more comfortable travelling.
But the company is still facing challenges in attracting more hosts to join, or rejoin, the platform. Airbnb said it had six million active listings, compared with 5.6 million a year ago.
Restrictions
The relatively small increase came even as pandemic restrictions eased, along with significant efforts by Airbnb to market the platform and improve hosting tools.
"We think probably the biggest growth area is going to be individuals," Airbnb chief executive Brian Chesky said of the year ahead. "And the reason why is because things like inflation are providing more pressure on families all over the world, and they're going to require economic opportunity to be able to make it through this difficult time."
His comments underscored the pressure that soaring inflation has put on households, with US consumer prices rising at their fastest annual pace in 40 years.
Mr Chesky said the company’s recently introduced “I’m flexible” feature – highlighting available properties to users who did not have a preference on time or place – had been used for more than 800 million searches for stays since May 2021, directing demand to where supply was more plentiful.
“We are not supply constrained globally on any night of the year,” Mr Chesky said, responding to multiple questions from analysts about a supply crunch. “The challenge is just that too many people go to too few places at the same time.”
He said guests were reserving summer travel accommodations early this year, with bookings for the peak travel months 25 per cent higher than at the same point in 2019.
Airbnb's optimism about the recovery in travel followed similar sentiments from American Express, which last month said travel bookings in January rose 44 per cent compared with the same period in 2019. The credit card company predicted future Covid-19 variants would have "very little impact" on goods and services spending.
Likewise, Airbnb said Omicron did not cause significant disruption compared with cancellations during the peak of the Delta variant.
Higher prices
In its final quarter of 2021, higher prices were the driving force behind revenue and profits, which came in higher than expected – although nightly bookings had not quite yet reached pre-pandemic levels, according to figures published on Tuesday.
In the October-December period, the number of “nights and experiences” booked – which includes Airbnb’s much smaller events and tour guide business – increased 59 per cent compared with 2020, but were still 3 per cent below the 2019 quarter.
The average nightly fee of $153.61 was more than a third higher than before the pandemic, boosting total gross bookings value 91 per cent year on year, and 32 per cent against 2019.
Revenue increased 78 per cent from last year, and 38 per cent from 2019, to $1.5 billion. Airbnb expects revenue between $1.41 billion and $1.48 billion for the current quarter.
Revenue and gross bookings were in line with Wall Street's expectations, according to data provided by FactSet. Revenue growth at Airbnb, whose business had proved more resilient during the pandemic months than that of its rivals, is now falling behind that of the major hotel groups, as well as travel aggregators Expedia and Booking. com.
Sharp cost-cutting on product development and marketing, and a lower amount of stock-based compensation payments stemming from its recent IPO, helped Airbnb achieve a $55 million net profit for the quarter, comfortably ahead of the $33 million consensus estimate. At $333 million, its adjusted ebitda earnings were its strongest ever, the company said. – Copyright The Financial Times Limited 2022