[Credit: Airbnb / Museo Ferrari Maranello]

Airbnb reports most profitable Q1 ever, forecasts Q2 “headwinds”

US: Airbnb has reported its most profitable first quarter to date in its earnings report for Q1 2024.

In its latest financial results, the company revealed that its Q1 net income had shot up to $264 million – a 126 per cent year-over-year rise – from $117 million 12 months ago. In the same quarter, Airbnb achieved a net income margin of 12 per cent, doubling the margin set in Q1 2023 and representing its highest first quarter ever.

Nights and Experiences booked in Q1 2024 increased 9.5 per cent YoY to 133 million. The company also recently unveiled Icons, a new category of experiences hosted by stars from across music, sport, film and more, as well as new group trip planning features, as part of its 2024 Summer Release.

The home-sharing firm said that it had been particularly encouraged by the continued growth of app downloads and usage, with Airbnb app downloads increasing by 60 per cent in the United States in the first quarter of this year compared to the same quarter a year ago. At the same time, Airbnb reported that global nights booked through its mobile app had risen by 21 per cent year-over-year, representing 54 per cent of total nights booked in the quarter – up from 49 per cent in Q1 2023.

Over the same period, Airbnb’s Q1 revenue saw a 18 per cent YoY rise from $1.8 billion to $2.1 billion, which the company primarily attributed to the “solid” growth in nights and Experiences booked, as well as “modest” increases in average daily rates [ADRs].

Airbnb co-founder and CEO, Brian Chesky, said: “We had our best Q1 ever, with 133 million nights and experiences booked, along with double-digit supply growth across all regions. I’m proud of our strong Q1 results and look forward to another record summer travel season.”

Chesky also emphasised that Airbnb was continuing to prioritise and invest in three key areas to fuel growth in the business.

Since debuting its Airbnb-friendly apartments program [a listing service exclusively for assets that allow short-term rentals in the United States] in November 2022 in partnership with notable landlords e.g. Greystar, the company has reiterated its focus on making hosting mainstream and accessible, including raising awareness around the benefits of hosting, providing better tools for hosts, and helping them to deliver high-quality stays. According to Airbnb, it removed “thousands” of listings that failed to meet guest expectations during the first quarter alone, having pledged to verify 1.5 million listings by the end of March 2024, and it also enforced a global ban on indoor security cameras in listings from 30 April.

Moreover, Airbnb revealed last month that it wants to open up home sharing for renters as well as homeowners and is advocating for renter-friendly short-term rental policies in the United States, as well as making a $100,000 donation to an organisation that helps renters stay in their homes.

Airbnb’s second key priority looking ahead is to perfect its core service and make it “reliable and affordable” for hosts and guests alike. As part of its mission, it highlighted the Winter Release launch of Guest Favorites, a collection of the highest rated homes on the platform according to ratings, reviews and reliability data to go alongside the existing Superhosts designation, and Airbnb says that over 100 million nights have already been booked at Guest Favorites in its first six months since launch.

The Winter Release upgrades were designed to help guests better understand exactly what to expect before they book, and enhance security and transparency for hosts.

For its third key priority, Airbnb said that it was seeking to continue expanding beyond its core offering, which includes accelerating growth in more markets around the world. As well as the launch of Icons, Airbnb is aiming to develop more products using artificial intelligence [AI] technology, following its acquisition of GamePlanner.AI, a stealth 12-person AI company, in November.

On the supply side, the company is underlining the importance of keeping quality as high as possible even as supply grows, with active listings growing 15 per cent compared to the equivalent quarter a year ago. Asia Pacific [APAC] and Latin America experienced the highest increases in active listings – and reported the most YoY growth in nights and Experiences booked.

This matches Chesky’s ambitions to pursue growth in so-called “under-penetrated” international markets such as Switzerland, Belgium and the Netherlands in Europe, as well as the likes of Germany, Brazil and South Korea.

Meanwhile, following the total solar eclipse seen in North America last month, during which period more than 500,000 guests booked stays via the platform, Airbnb says that it is “uniquely positioned” for special events.

This will be especially important ahead of the 2024 Summer Olympic Games in Paris, France, where nights booked for stays during the Olympics dates are more than five times higher than they were in the French capital the same time last year. In addition, Airbnb claims that there were nearly 40 per cent more active listings in Paris compared to Q1 2023, despite the threat of strict regulations and a drop in prices due to the glut of apartments emerging on the rental market.

Likewise, Germany is preparing to host the 2024 European Football Championships from next month – according to the home-sharing platform, nearly double the number of nights have been booked compared to the same period in 2023.

As per management commentary on the conference call, international travel remains “robust” and the company is predicting a “record” summer season, boosted by sporting events like the Olympics and the Euros.

However, forecasts for the current quarter were underwhelming, with management guidance hinting at a quarterly growth of between eight and 10 per cent, and a revenue range between $2.68 billion and $2.74 billion, below analyst expectations of $2.74 billion.

Airbnb’s stock price dipped from $157.90 to a low of $144.52, although it has since picked up in Thursday trading to $147.50 at the time of writing.

The Airbnb management further noted that “YoY revenue growth in Q2 2024 will face a significant sequential headwind primarily due to the timing of the Easter holiday, the inclusion of Leap Day in Q1 2024, and the impact of FX rate changes”.

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