Airbnb Slides as Bookings Slow Amid Higher Average Prices

Airbnb Inc. shares slid after the company reported a slower pace of growth in the number of nights booked as prices for lodging remain high.

(Bloomberg) — Airbnb Inc. shares slid after the company reported a slower pace of growth in the number of nights booked as prices for lodging remain high.

People booked 115.1 million nights and experiences on the home-rental platform in the second quarter, up 11% from a year earlier but the slowest pace of growth since the pandemic shutdowns. Analysts had forecast 117.8 million nights. In the current quarter, Airbnb said it expects a “modest” sequential increase in nights and experiences booked and that revenue will outpace nights and experiences due to continued resilience in prices.  

Revenue for the third quarter will be $3.3 billion to $3.4 billion, surpassing analysts’ expectations of $3.2 billion, the company said in a letter to shareholders on Thursday. The shares slid about 2% in extended trading after the results.

Despite the disappointing bookings in the second quarter, consumers continue to show that they’re willing to prioritize spending on travel, especially on international trips and visits to cities. Airbnb said bookings have been increasing in the current quarter and were up 10% in April from a year earlier and 15% in June. That comes even as average daily rates rose 1% from a year earlier to $166. They are now up 42% from 2019 levels.

The San-Francisco based home-sharing company has seen its business shift and adapt to travel and lifestyle trends resulting from the Covid-19 pandemic. After travel initially ground to a halt, it quickly rebounded as people sought to escape crowded cities and hunker down in rental homes with outdoor space and home offices. People were staying longer too, taking advantage of more flexible work-from-home policies. 

As pandemic restrictions have eased and the last barriers to travel came down last year, pent-up demand has led to a surge in trips. Americans are traveling abroad in huge numbers this year, venturing internationally to take advantage of the stronger dollar. Airbnb’s cross-border nights booked increased 16% compared with a year ago, with strong growth across all regions. Cross-border trips to Asia Pacific increased more than 80% while travel to North America increased 20%. 

Airbnb said revenue rose 18% to $2.5 billion in the three months ended June 30, beating analysts’ projections for $2.4 billion. Adjusted earnings before interest, taxes, depreciation and amortization was up 15% from a year earlier to $819 million, well beyond analysts’ forecasts of $725.7 million. The stubbornly high prices also helped drive Airbnb to its most profitable second quarter ever. Net income was $650 million, a 72% increase from a year ago. 

Airbnb’s peers in the online travel industry have given mixed views of consumer behavior. Earlier Thursday, Expedia Group Inc. gave a muted view of the travel industry, reporting revenue that missed analysts’ estimates, sending its shares down 17%. Expedia’s Vrbo unit competes with Airbnb in the market for short-term rentals. Expedia Chief Financial Officer Julie Whalen said the shift in travelers’ preference toward shorter stays and urban markets has had an impact on Vrbo. 

Airbnb’s traditional strength, however, is in cities and it saw high-density urban nights booked increase by 13% in the second quarter.

Booking Holdings Inc. reported second-quarter revenue that beat analysts’ estimates, and predicted a “record travel season in the third quarter.” It’s shares jumped 13% in extended trading. 

Airbnb has risen 65% this year through the close of trading, outpacing the 12% gain of Expedia and 40% increase in Booking. 

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