Airbnb reports optimistic outlook after most profitable Q2 ever
US: Airbnb has reported an optimistic outlook for travel demand, after recording its most profitable second quarter to date in its latest earnings call.
On Thursday, Airbnb CEO Brian Chesky revealed that the company’s Q2 net income had increased to $650 million, a 72 per cent year-over-year [YoY] rise on the $379 million figure recorded in the equivalent quarter a year ago. It also delivered a net income margin of 26 per cent – its highest second quarter ever – up from 18 per cent in 2022. Airbnb attributed this increase to “revenue growth, expense discipline and interest income” with high summer bookings anticipated.
Airbnb’s second quarter revenue surged 18.1 per cent to $2.48 billion, beating analysts’s estimates of $2.42 billion. This was driven by “solid growth in nights and experiences booked [exceeding 115 million] and “stable” average daily rates [ADRs, rising one per cent globally to $166], as the company admitted that it would have to bring in moderate price hikes for guests.
Bookings grew by 11 per cent to 115.1 million, compared to 103.7 million in the same period a year earlier. Meanwhile, gross bookings shot up by 13 per cent to $19.1 billion, and global cross-border bookings were 16 per cent up on Q2 2022.
Urban nights reserved saw a 13 per cent year-over-year increase as more guests made a return to cities, while analysts stated that the strong position of the US dollar had enticed more consumers to book flights to overseas destinations, as well as domestic stays. Airbnb added that it was “encouraged” by the recovering in EMEA and a resurgence in cross-border travel in both North America and Asia-Pacific.
As part of its 2023 Summer Release in May, Airbnb launched a number of new features for long-term stays [28 nights or longer]. Since then, the company said that year-over-year growth in bookings for long-term stays had accelerated every month during the quarter, while nights from long-term stays remained “stable” with the prior quarter at 18 per cent of total gross nights booked in Q2 2023.
As has been the case for the past six quarters, long weekends continue to be the fastest growing trip type on Airbnb.
In terms of supply, the San Francisco-based firm reported an acceleration of total active listings by 19 per cent compared to Q2 2022, with the highest growth in listings taking place in Asia-Pacific and Latin America. Airbnb’s total active listings worldwide now stand at seven million – the highest figure in its history.
Based on May’s Summer Release, affordability is an ever-increasing focus on Airbnb, as it pledged to offer more single rooms in homes and apartments as a low-cost option, particularly for younger travellers.
Elsewhere, the company is introducing new pricing tools for hosts as it forecast that the average rate customers would pay per night would decline further in the quarter. As consumers gravitate to affordable stays, Airbnb is making it easier for hosts to compare the prices they charge with other hosts listing in their local areas, while the company recently updated its platform to display all cleaning fees upfront for the sake of transparency.
Looking to the future, Airbnb expects its third-quarter revenue to rise significantly to between $3.3 billion and $3.4 billion, despite concerns that demand for domestic stays in the United States could drop off in Q3. Additionally, the firm anticipates a renewed rebound in urban and international travel this summer as it continues to build beyond its core service.
Airbnb co-founder and CEO, Brian Chesky, said: “Our Q2 results show the desire to travel and host on Airbnb remains strong.”
