Airbnb, along with its rivals Expedia Group Inc. and Booking Holdings Inc., have said they expect this summer to be one of the best the industry has ever seen, as travellers unleash pent-up demand and head to far-flung destinations and tourist hot spots.
Airbnb has managed to weather the pandemic and even thrive, achieving the best year in the company’s history in 2021, as it claims a “new world of travel” has emerged.
The company gave a forecast for revenue in the current quarter that easily surpassed Wall Street’s estimates as the company sees “substantial demand” for travel heading into the busy summer season after more than two years of Covid-19 restrictions.
Shares gained about 6% in extended trading.
Second-quarter revenue will be $2.03 billion (R32 billion) to $2.13 billion (R33 billion). That topped the average analyst’s estimate of $1.97 billion (R31 billion), according to data compiled by Bloomberg.
Revenue in the first three months of the year was also better than expected, helping significantly narrow the net loss at the vacation home rental platform.
“As we lap the beginning of the travel rebound that started last year, we are particularly encouraged by the compounding growth we are seeing in North America,” Chief Executive Officer Brian Chesky wrote in a letter to shareholders.
“US domestic demand this year has so far outpaced our internal expectations, and we are encouraged by US international bookings exceeding 2019 levels.”
Chesky also said Airbnb is seeing “higher than historical demand” for the fourth quarter, “which indicates that consumer confidence to travel remains strong beyond the summer months.”
That vision was threatened earlier this year with the resurgent omicron Covid-19 variant and the break out of the war in Ukraine, yet industry executives have remained unfailingly optimistic.
There are positive signs that people are itching to travel. For example, United Airlines Holdings Inc. is boosting capacity for transatlantic flights, and Southwest Airlines Co. said it expects to be profitable for the remaining three quarters of the year, even with oil prices well over $100 a barrel.
In Expedia’s earnings report on Monday, which showed an 80% jump in revenue in the first quarter, CEO Peter Kern said he’s “feeling very good about a summer recovery that should be very robust.”
Travel companies from hotels to airlines have been saying consumers are willing to pay the rising prices so far, but there appears to be a limit. Hilton Worldwide Holdings Inc. gave a profit forecast that fell short of analysts’ expectations.
The flexibility offered by new remote work policies has resulted in people spreading out to thousands of towns and cities, staying for weeks, months, or even entire seasons at a time, Chesky said.
“So far from what I can tell, you’re still seeing improvements versus 2019 levels across European and US geographies,” Justin Patterson, an analyst with Keybanc Capital Markets, said in an interview before the results were released.
“What I can tell today, the demand for travel has not weakened in the US or Europe.”
Earlier this year, Chesky himself began “living“ on Airbnb and staying in rentals around the country for a few weeks at a time to help improve the experience of people who can now live anywhere.
Mirroring the trends of its customers, Airbnb said last week that its employees would be permanently able to work from anywhere — including their home, the office or while travelling in different countries.