Airbnb highlights affordability and market expansion in Q1 report

US: Three months after notching a first-ever annual profit in Q4, Airbnb has reiterated its focus on affordability, supply growth and product and service expansion for the foreseeable future in its latest Q1 earnings report.

Following up on the previous week’s 2023 Summer Release, in which the company unveiled its “most extensive set of improvements ever”, Airbnb is continuing to address feedback from guests and hosts across the end-to-end browsing and booking experience. Airbnb’s headline launch was a new ‘Rooms’ category featuring a ‘Host Passport’ that allows guests to get to know their host/s before they stay, with the firm keen to acknowledge its original idea of allowing someone to stay in someone else’s home at an affordable rate and enable them to meet someone new and experience a city like a local.

Among the headline figures from Airbnb’s Q1 earnings report was recording a highest first quarter to date in Q1 revenue [$1.8 billion], a 20 per cent year-over-year rise on 2022 numbers driven by “solid” growth in nights and experiences booked and “stable” average daily rates [ADRs].

In terms of net income, 2023 represented Airbnb’s first profitable first quarter [$117 million], having recorded its first annual profit in Q4 only a couple of months ago. That figure compared with a net loss of $19 million a year prior.

According to CEO Brian Chesky, nights and experiences booked on Airbnb grew 19 per cent in Q1 compared to the equivalent quarter in 2022, a sign that he said demonstrated both the loyalty from returning guests and “a growing base of first-time bookers”. High-density urban nights booked rose by 20 per cent in Q1 on 2022 levels, aided by an 18 per cent year-over-year growth in urban and non-urban supply.

Chesky repeated his statement that guests are continuing to use Airbnb for longer-term stays, with stays of 28 nights or longer accounting for 18 per cent of total gross nights reserved in Q1 2023, up from 16 per cent in the previous quarter at the end of 2022.

In addition, the company said that it was “encouraged” by the surge in cross-border nights and the continued recovery in Asia Pacific [APAC] after the easing of lockdowns in certain countries across the region.

Looking ahead, Airbnb confirmed that it was “building the foundation” for new product and service launches in 2024 and beyond, as well as expanding its presence in more than 220 countries and regions around the world. Brazil and Germany have become two of the company’s fastest growing markets and Airbnb is targeting those destinations for renewed investment.

Chesky added that there remains a “huge opportunity” to establish Airbnb’s presence in Asia over the next five years, and likewise Europe, with the company planning to collaborate with local social media influencers in destinations around the world to accelerate its product and service rollouts.

Affordability is central to Airbnb’s strategy moving forward, with the company set to bring in tools that give hosts the ability to price their properties more competitively with other local hosts in their area, while Airbnb’s new Rooms product is designed to enable people to travel more affordably during a challenging macro-economic context.

When asked about Airbnb’s intentions to incorporate artificial intelligence [AI] in its operations, Chesky referred to customer service as an area where the company can provide a faster and cheaper service. He also revealed that Airbnb had been lined up as a ChatGPT launch partner at the end of last year, though he “pulled the plug” on it due to the fact that a text-only AI is not considered sufficient to convey the uniqueness and diversity of Airbnb’s listings offerings.