Airbnb’s Sales Forecast Tops Estimates on Strong Travel Demand
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(Bloomberg) -- Airbnb Inc. shares surged the most since 2021 after the company’s sales outlook beat analysts’ estimates, signaling robust travel demand following a record year in 2022.
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Shares rallied as much as 11.7% to $135, the highest since May.
The San Francisco-based home-sharing company expects sales of $1.75 billion to $1.82 billion in the three months ending in March, easily clearing analysts’ average projection of $1.68 billion. Airbnb expects the number of nights and experiences booked to grow at close to the same 20% pace of the fourth quarter. The company said Tuesday that comparisons of the current quarter with the same period in 2022 are easier due to the impact of the omicron variant and war in Ukraine that weighed on business at this time last year.
Shares of Airbnb have rallied more than 57% this year, outpacing fellow online travel giant Expedia Group Inc. and Booking Holdings Inc., which have increased more than 32% and 23%, respectively. TripAdvisor Inc. also rallied as much as 8.6% Wednesday following a favorable earnings report the day before.
Demand is remaining resilient so far this year, with travelers broadly booking trips further in advance, Chief Financial Officer Dave Stephenson said on a call with analysts.
“Those travel-crazy Europeans are booking Summer travel earlier this year,” Evercore ISI analyst Mark Mahaney wrote in a note to clients.
The optimistic outlook followed what was already a robust performance in 2022. Airbnb said it had net income of $1.9 billion, marking its first profitable full year according to generally accepted accounting principles. In the fourth quarter, Airbnb reported revenue increased 24% to $1.9 billion, beating the average analyst estimate of $1.86 billion, according to data compiled by Bloomberg. Earnings per share were 48 cents.
Airbnb has been a major beneficiary of the work and lifestyle changes wrought by the pandemic. The company recorded its highest revenue and most profitable quarter ever in the period from July to September, fueled by pent-up travel demand after two years of Covid-19 restrictions.
Now, it’s starting to see some of the trends it benefitted from — such as people renting large rural homes for weeks or months at a time — reverse and travelers opt for shorter stays in big cities and more international destinations. High airline prices and a potential looming economic slowdown are also adding to consumers’ considerations when weighing a trip. But it doesn’t seem to be putting off travelers yet, as the company said “consumer confidence to travel remains high.”