Airbnb, the popular online marketplace for vacation rentals, has projected a strong third-quarter revenue, with estimates ranging between $3.3 billion and $3.4 billion. Despite this positive forecast, the company’s shares experienced a slight drop of 1.2% in after-hours trading due to concerns over softening domestic demand in the United States.
While Airbnb remains optimistic about a rebound in urban and international travel, firms that heavily rely on the U.S. market have been losing domestic business as more consumers opt for vacations abroad. This trend is reflected in the 16% increase in global cross-border bookings for Airbnb during the second quarter, as well as the 13% year-over-year increase in urban nights booked.
Interestingly, the average daily rate for Airbnb accommodations saw only a 1% global increase. The platform aims to moderate price hikes for consumers, ensuring affordability remains a priority. Concurrently, the demand for domestic hotels within the United States has remained stagnant as pandemic restrictions ease and a stronger U.S. dollar encourages travelers to book flights and stays overseas.
Within North America, however, Airbnb experienced a notable acceleration in total growth of nights booked from the first to the second quarter. This suggests the strength and resilience of the North American consumer market.
In terms of financial performance, Airbnb reported impressive second-quarter revenue growth of 18.1%, reaching $2.48 billion, surpassing analysts’ estimates. Gross bookings also saw a 13% increase, amounting to $19.1 billion. Furthermore, the company reported a profit of 98 cents per share, exceeding expectations of 78 cents.
In stark contrast, online travel agency Booking Holdings witnessed a 10.25% surge in shares during extended trading after raising its annual forecast. This growth can be attributed to the high demand for international travel, particularly to Europe.
Overall, despite concerns about domestic demand and a drop in share prices, Airbnb remains confident in its growth potential. The company’s focus on affordability and its ability to adapt to evolving travel preferences positions it well for success in the ever-changing hospitality industry.