Inflation could drive more families to become Airbnb hosts, chef says

Rising inflation could encourage more families to become Airbnb hosts, its co-founder and chief executive said, as investors worried about limited supply on the accommodation platform as the request came back.

Airbnb said Tuesday it expects bookings to rebound to pre-coronavirus pandemic levels for the first time in the current quarter after concerns over the Omicron coronavirus variant “quickly dissipated”. and people become more comfortable traveling.

But the company still faces challenges in attracting more hosts to join or join the platform. Airbnb said it had 6 million active listings, up from 5.6 million a year ago.

The relatively small increase came even as pandemic restrictions eased, along with significant efforts by Airbnb to market the platform and improve hosting tools.

“We think the biggest area of ​​growth is likely to be individuals,” Airbnb chief executive Brian Chesky said of the year ahead. “And the reason for that is things like inflation are putting more pressure on families around the world, and they’re going to need economic opportunities to be able to get through this tough time.”

His comments underscored the pressure that soaring inflation has put on households, with U.S. consumer prices rising at their fastest annual rate in 40 years.

Chesky said the company’s recently introduced “I’m flexible” feature – highlighting properties available to users who didn’t have a time or location preference – had been used for more than 800 million searches for stays since May 2021, directing demand to where supply was more plentiful.

“We’re not limited to supply globally any one night of the year,” Chesky said, responding to multiple questions from analysts about a supply shortage. “The challenge is just that too many people are going to too few places at the same time.”

He said customers were booking summer travel accommodation earlier this year, with bookings for peak travel months 25% higher than at the same time in 2019.

Airbnb’s optimism about travel resuming followed similar sentiments from American Express, which said last month that travel bookings in January were up 44% from the same period in 2019. Credit card company predicted that future variants of Covid-19 would have “very little impact” on spending on goods and services.

Similarly, Airbnb said Omicron did not cause significant disruption from cancellations during the Delta Variant’s peak.

In its last quarter of 2021, rising prices drove revenues and profits, which were stronger than expected – although overnight bookings have yet to quite reach pre-levels. the pandemic, according to figures released on Tuesday.

During the October-December period, the number of “nights and experiences” booked – which includes Airbnb’s much smaller events and tour guide activities – increased by 59% compared to 2020, but was still 3% lower in the 2019 quarter.

The average nightly rate of $153.61 was more than a third higher than before the pandemic, increasing the total gross value of bookings by 91% year-on-year and 32% from 2019.

Revenue increased 78% from last year and 38% from 2019, to $1.5 billion. Airbnb expects revenue between $1.41 billion and $1.48 billion for the current quarter.

Revenue and gross bookings were in line with Wall Street expectations, according to data provided by FactSet. Revenue growth for Airbnb, whose business had proved more resilient during the pandemic months than that of its rivals, is now lagging that of major hotel groups, as well as travel aggregators Expedia and Booking.com .

A sharp reduction in product development and marketing costs, and a drop in the amount of stock-based compensation payments resulting from its recent IPO, helped Airbnb achieve a net profit of $55 million for the quarter, well ahead of the consensus estimate of $33 million. At $333 million, its Adjusted Ebitda profit was the highest on record, the company said.

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