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Airbnb benefits from high booking prices and predicts ‘strong’ summer- Newshubweek

Airbnb benefits from high booking prices and predicts ‘strong’ summer
Written by Arindam

Continued high booking prices helped Airbnb to strong second-quarter revenues, as the accommodation site continued to capitalise on consumers’ pent-up demand for travel.

The company on Tuesday reported 103.7mn “nights and experiences” booked on the platform in the April-June period, below the 106.4mn Wall Street had expected. Revenue was in line with expectations at $2.1bn, up 25 per cent on 2021.

The average price per night on the platform was $163.74, lower than the previous quarter but still 40 per cent above pre-pandemic levels, the company said.

Overall, gross booking value — the total sum of all nights and experiences booked — was $17bn. Analysts had been expecting around $17.1bn, according to consensus data from FactSet.

The company said it generated $795mn in free cash flow in the quarter, contributing to $2.9bn in free cash flow in the past 12 months. Net income was $379mn, up from a loss of $68mn in the same period last year.

Saying it was “so confident in our long-term growth and profitability”, Airbnb announced a $2bn share repurchase programme. The move may boost the company’s flagging stock price, which began Tuesday’s trading down more than 30 per cent on the start of the year.

Looking ahead, the company said it anticipated the highest revenue in its history in the current quarter, giving guidance of between $2.78bn and $2.88bn — 24 to 29 per cent higher than the same period last year.

“We are in the midst of our strongest peak travel season yet,” chief executive Brian Chesky wrote in a letter to shareholders. “On July 4th, we recorded our highest single day revenue ever, signalling the strong summer season ahead.”

The number of active listings on the platform was flat on the previous quarter at 6mn. In May, the company announced it was pulling out of China. All listings within the country were removed last month.

While inflation has put pressure on many companies, the travel industry is still benefiting from a post-Covid bump in demand, with some optimism that business travel is also making a comeback.

Due to its popularity as a way of finding places to remote work, or for tourism in less densely populated areas, Airbnb was the first of the major travel companies to stage a recovery.

Other groups are now catching up. Earlier on Tuesday, hotel group Marriott recorded a 70 per cent year-on-year jump in revenue in its second quarter.

Last week, Hilton similarly beat expectations, with chief executive Christopher Nassetta telling investors it had seen a meaningful rebound in the number of bookings related to business meetings.

Chesky had previously said the company believed the increased cost of living would motivate some homeowners to put rooms on Airbnb.

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Arindam

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