Airbnb Q1 revenue jumps five per cent ahead of travel rebound
US: Airbnb has reported a five per cent rise in Q1 revenue compared to the same period last year [$887 million compared to $842 million in 2020] in its second earnings report since it went public via an initial public offering [IPO] in December.
The company’s Q1 revenue, recorded between January and 31 March 2021, significantly exceeded Wall Street predictions of $721 million, while bookings were up by 13 per cent [64.4 million] on the same time 12 months ago.
Despite that, the home-sharing platform posted a first quarter net loss of $1.2 billion, which was inflated by a number of one-off costs, including the repayment of term loans [totalling $377 million], a non-cash mark-to-market adjustment for warrants [totalling $292 million], and the termination of an office lease in San Francisco [worth $113 million].
It comes after Airbnb posted a net loss of $3.9 billion in the fourth quarter of 2020 in its first earnings report since going public.
Meanwhile, gross booking value – the total amount of nights and experiences booked – saw an uptick of 52 per cent on Q1 2020 to $10.3 billion. Airbnb attributed this trend to a shift towards higher-cost bookings, including entire home reservations, group travel [families] over solo trips, and longer-term stays of more than seven nights.
Airbnb also revealed that travellers had booked 64.4 million nights and experiences in the first quarter of 2021, a further 13 per cent year-on-year leap on 2020 levels.
Speaking to investors, CEO Brian Chesky pointed towards people moving around more freely due to the rollout of vaccines and easing of travel restrictions, as well as their willingness to work and live from remote locations, as reasons for Airbnb’s upturn in fortunes compared to the immediate aftermath of Covid-enforced lockdowns last year.
He said: “We expect travel to be very different than before. People are discovering that they don’t have to be tethered to one location to live and work.”
While a portion of Airbnb’s increase in revenue was driven by vaccinations and lockdowns easing in the United States, leading to higher average daily rates year-on-year, it noted caution over the “severity and duration” of restrictions albeit a “steady improvement” in its business in France, and the UK in particular.
Airbnb said: “We saw a sharp increase in bookings in the UK immediately after British prime minister Boris Johnson announced plans to exit lockdown in February, as well as a sharp increase in bookings in France following the easing of travel restrictions in May.”
Recent data provided by data and analytics provider, AirDNA, indicated that the US short-term rental industry has recovered demand above 2019 levels, marking the first month since the outbreak of Covid-19 to exceed performance from two years ago.
In April, US short-term rental demand increased by 66.4 per cent compared to 2020 levels, and 5.4 per cent over 2019 levels. Occupancy figures also built on March’s strength, rising to 61.6 per cent in April from 60.9 per cent in March.
Looking to the future, Chesky is envisaging a surge in holiday bookings in the second quarter of this year, and sees it as an opportunity to “perfect” the platform’s end-to-end experience for hosts and guests alike. Alongside this, the company’s principal aims are recruit more hosts, educate consumers about the benefits of becoming hosts, simplifying the guest journey and delivering a “world-class” service.
Chesky said: “While conditions aren’t yet normal, they are improving, and we expect a travel rebound unlike anything we have seen before.”
In a bid to expand its community and attract more hosts back to its platform after many were left disillusioned over the handling of refunds in the early stages of the pandemic, Airbnb announced the launch of a global advertising campaign in February – Made Possible by Hosts. It was the company’s largest campaign in five years, targeting existing and potential hosts in the USA, UK, France, Canada and Australia with online and TV coverage, and it will be rolled out in both Italy and Spain in Q2.
The home-sharing platform is set to make a further set of announcements next Monday [24 May] in order to drive more host signups, as it said the recent campaign had been largely “well received”.
