Airbnb sales beat estimates, showing demand amid covid surge


AirBnB sales beat estimates even during the pandemic, and expects a rebound in travel this year as Covid-19 vaccines are rolled out. — REUTERS

Airbnb Inc. reported quarterly revenue that blitzed analysts’ estimates, benefiting as travelers chose vacation rentals during a holiday season marred by rising Covid-19 cases.

The company didn’t give a financial forecast and it was cautious about 2021, keeping a lid on share gains in extended trading.

Releasing its financial results for the first time as a public company on Thursday, Airbnb showed sales of US$859mil (RM3.39bil) in the final three months of 2020, a decline of only 22% from a year earlier.

Analysts had been projecting US$739.7mil (RM2.99bil), according to data compiled by Bloomberg. Nights and experiences booked, a metric that represents the total number of guest stays and tourist activities booked on the platform, dropped 39% from a year earlier to US46.3mil (RM187.51mil), the San Francisco-based company said in a statement. Gross booking value fell 31% to US$5.9bil (RM23.89bil)

The coronavirus pandemic continues to hammer the travel industry after a surge in cases through winter led to new lockdowns and restrictions and the vaccine rollout has faced hurdles globally. Airbnb was among the hardest-hit companies of the pandemic and almost shelved its IPO plans as travel shut down nearly a year ago.

By April, room bookings and experiences had plunged 72%. Airbnb rolled out a blanket refund policy and doled out more than US$1bil (RM4.05bil) in cancellation fees.

But Airbnb, which helped pioneer the home-sharing vacation model, has fared better than its rivals as travelers have taken advantage of work-from-home opportunities, road-tripping to nearby mountain villages or beach towns, often booking longer stays than usual.

Airbnb started to see business stabilize in the fall and the company ended 2020 with a record-setting IPO. It’s stock is up 165% since then, valuing the company at more than US$100bil (RM405bil), greater than either Expedia Group Inc. or Booking Holdings Inc.

The IPO and its associated stock compensation, as well as the effects of the pandemic, led to steep losses in the fourth quarter. Airbnb reported a net loss of US$3.9 bil (RM15.79bil) compared with a loss of US$351.5mil (RM1.42bil) a year earlier. Analysts had projected a loss of $3.2 bil (RM12.96bil). The loss per share was US$11.24 (RM45.52)

"We have been encouraged by our continued resilience and recovery, and are optimistic about the upcoming travel rebound,” the company said in its report. But, Airbnb said it has "limited visibility for growth” in 2021 "given the difficulty in determining the pace of vaccine roll-outs and the related impact on willingness to travel.”

Chief Executive Officer Brian Chesky has said he is hopeful vaccine distribution will lead to a post-pandemic travel boom that will continue to favor Airbnb over traditional hotels.

"We do believe the travel rebound is coming and we think it’s going to be a very big rebound," Chesky said Thursday during an interview on Bloomberg Television. "We need to make sure we have enough hosts to prepare.”

The return in travel will likely be driven by longer stays as "now in a world of Zoom, people can work from home and they’re realising they can work from any home, ” he said.

In a conference call with analysts, Chesky said Airbnb will be investing in customer service. The company has plans to simplify users’ experiences by making it easier to book a stay and list your home on the platform. Airbnb has a goal to help users become a host in just 10 minutes. Guests will not just be "traveling on Airbnb, but living on Airbnb, ” he said on the call.

Analysts are also optimistic. "Once a vaccine is widely distributed in the US and Europe (we see by summer), revenue will come roaring back, with monthly bookings to exceed previous peak levels by year-end, reflecting the enormous amount of pent-up demand in the ecosystem,” CFRA analyst Angelo Zino wrote in a note before the results were released. He estimated Airbnb’s bookings would more than double in April. BTIG analyst Jake Fuller wrote that Airbnb is positioned to be the first online travel agent to return to room-night growth due to "the rising relevance of alternative accommodations.”

Airbnb shares rose about 3.5% in extended trading on Thursday. The stock closed at US$182.06 (RM737.34) in New York earlier.

Expedia and Booking reported steep revenue declines in the fourth quarter of 67% and 63%, respectively. However, both online travel agencies pointed to growth returning to their alternative accommodation businesses. Booking said it plans to increase its whole-home rental offerings in the US in response to Airbnb’s success.

At the depth of the pandemic, Airbnb forecast revenue for 2020 would be less than half of what it was in 2019. On Thursday, it reported total revenue of US$3.4bil (RM13.77bil) for 2020, down 30% compared to 2019.

"Airbnb operates almost a pure-play on alternative lodging so I think compared to other OTAs it will probably see less of a hit because that kind of lodging is more in demand,” Truist Securities analyst Naved Khan said in an interview before the results were released.

People want to travel, but are opting to avoid hotels with communal lobbies, crowded elevators and shared dining spaces, according to a report released earlier this year by vacation rental data company AirDNA.

"Throughout 2020, alternative accommodations gained a significant leg up on traditional lodging,” the report said. Heading into last year, US short-term rentals accounted for just 10% of total lodging revenue -- the pandemic boosted their share to over 25%, according to the report.

Airbnb is expecting to see a regional travel rebound this year. The company spent US$630mil (RM2.55bil) on sales and marketing in the fourth quarter, a 44% increase from the same period a year earlier.

In January, the company released a report predicting travel trends for 2021, saying people will focus on rural destinations rather than crowded tourist hotspots. In the report, Airbnb said survey data showed 54% of respondents expect to travel this year. Research firm Morningstar also anticipates a travel rebound in the second half of 2021, and a full recovery by 2023. – Bloomberg

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 46
Cxense type: free
User access status: 3
   

Next In Tech News

How to retrieve your WhatsApp account if your phone is lost or stolen
WhatsApp group members now have control over disappearing messages
Are employers using Zoom too much?
Teens are growing more depressed: could a mental health warning app help?
Amazon's video game division cancels Lord of the Rings game announced in 2019
Microsoft’s US$20bil AI deal will shake up how we work
Sony to roll out first major software update of PS5 since launch
Renting a car? Don’t forget to unpair your phone afterwards
ARK buys another $64 million in Coinbase shares, sells $99.5 million of Tesla shares
Twitter says services down for some users

Stories You'll Enjoy


Vouchers