An Airbnb listing in Bangkok, Thailand [Credit: Airbnb]

Airbnb highlights “record travel season” but predicts Q4 “volatility”

US: Airbnb has reported a “record summer travel season” on its platform in its third quarter earnings results, although it is predicting greater “volatility” in Q4.

Nights and Experiences booked on the platform grew 14 per cent to 113 million compared to a year ago, while there was a “sequential” acceleration in the year-over-year growth rate of nights booked worldwide in comparison with the second quarter

Over the same period, Q3 revenue of $3.4 billion represented an 18 per cent year-over-year growth over Q3 2022, however Airbnb expects its Q4 revenue to come in between $2.13 billion and $2.17 billion, falling below average analysts’ estimate of $2.18 billion, in line with London Stock Exchange Group [LSEG] data. Bookings look likely to decelerate over the next quarter due to rising travel costs, economic uncertainty, geopolitical turbulence [e.g. in the Middle East] and more employers pushing their employees to return to the office on a part- or full-time basis.

Airbnb said: “We are seeing greater volatility early in Q4, and are closely monitoring macroeconomic trends and geopolitical conflicts that may impact travel demand.”

Net income of $4.4 billion, or $1.6 billion excluding a one-time income tax benefit, represented Airbnb’s most profitable Q3 to date, while Q3 adjusted EBITDA increased 26 per cent YoY to $1.8 billion and free cash flow rose to $1.3 billion, a 37 per cent YoY  uptick on the equivalent quarter a year ago.

Average daily rates [ADRs] were three per cent up on last year’s figure at $161, although they dropped for the second consecutive Q3 by one per cent in North America overall.

Airbnb observed that its cross-border nights booked surged by 17 per cent over the most recent quarter, with Asia Pacific [APAC] recovering significantly to pre-pandemic levels, and markets such as Taiwan, the Philippines, Thailand, Hong Kong and Indonesia recording 30 per cent-plus YoY gross night bookings on an origin basis.

Despite Airbnb shuttering its domestic tourism business and experience listings in China last July, Chinese outbound travel rose by more than 100 per cent in Q3 over the same quarter last year, signifying an upsurge in consumer confidence in the region.

APAC and Latin America, meanwhile, saw the highest uptick in supply growth in global Airbnb markets as the regions also recorded the most YoY growth in nights and experiences booked. Airbnb has already added almost one million active listings this year as it attracted individual and professional hosts to the platform, taking it to over seven million active listings in total.

The company’s shares fell 4.9 per cent to $114.30 in extended trading hours after the earnings results announcement.

Airbnb co-founder and CEO, Brian Chesky, said: “Our Q3 results highlight a record travel season on Airbnb and our most profitable quarter ever. Over the last nine months we’ve added nearly one million listings globally and we continue to see demand for travel grow.”

Looking ahead, Airbnb highlighted three key strategic priorities to improve the guest and host experience though the platform:

  • Airbnb wants to make hosting more “mainstream”, having reported a 19 per cent growth in active listings this quarter over the same period in 2022. The company said that it would continue to raise awareness around hosting, make it easier to get started, and improve the overall experience for hosts, following previous criticisms about safety and pricing transparency.
  • Airbnb is looking to “perfect” its core service through its twice-a-year product releases. Over the last two years, the company said that it had launched more than 350 new features and upgrades, and it will unveil its 2023 Winter Release on 8 November.
  • Airbnb says that it is looking to expand beyond its core by developing differentiated offerings for hosts and guests, expanding internationally, and investing in under-penetrated global markets. The company cited Germany and Korea as two countries seeing the fastest uptick in gross nights booked compared to 2019 levels.

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