A password will be e-mailed to you.

Airbnb stock falls after decline in Q3 bookings on Delta Variant

In extended trading, Airbnb shares slumped 5% as the firm forecasted a drop in quarterly bookings compared to pre-pandemic levels, citing the spread of the Delta version of Covid-19.

Airbnb

Source: Esquire Middle East

The number of nights and experiences booked in the third quarter will be lower than in the same period last year, according to the home-rental firm. The announcement on Thursday heightened investor concerns that the new epidemic will have a significant impact on the travel sector. Booking Holdings and Expedia Group also issued similar cautions about the Delta variant’s impact on their recent financial results. All three companies posted excellent quarters.

Airbnb earnings

Airbnb blew past forecasts for second-quarter bookings and provided a fairly upbeat revenue forecast for the current quarter, indicating that the projected drop in overall reservations won’t hurt revenues.

The San Francisco-based business reported $13.4 billion in gross bookings in the second quarter, up 37% from pre-pandemic levels in 2019. According to Bloomberg statistics, analysts projected an average of $11.2 billion. Quarterly sales were $1.34 billion for the three months ending June 30, up 10% from the same period last year.

The rise in demand has heightened competition among the world’s largest online travel businesses. Landlords in the United States, particularly those who advertise on Airbnb, have been courted actively by Booking and Expedia.

The number of active listings on Airbnb increased in the second quarter, according to the company. The firm stated, “We’re seeing the largest supply increases in the locations with the greatest visitor demand.”

Despite Delta’s reservations, Airbnb witnessed a nearly 200 percent increase in nights and experiences booked, which covers all Airbnb stays and tourist activities. The business reported total bookings of 83.1 million for the quarter, above the average analyst forecast of 77.5 million.

Airbnb’s adjusted earnings before interest, taxes and other costs came in at $217 million, well above analyst expectations of $50.4 million. A loss of 11 cents per share was recorded by the firm. Analysts had predicted a loss of 41 cents.

While Airbnb has profited from a surge in domestic travel in the United States due to growing immunization rates and loosening regulations, foreign sales have remained restricted, and the Delta variation has cast even more uncertainty on the company’s future.

Letter to Shareholders

The firm, which went public in December, stated in a statement to shareholders published with the findings, “The travel recovery is upon us, and Airbnb is leading the way.” “With more than 4 million guests overnight at an Airbnb property in the last several weeks, we enjoyed our biggest night ever in the US and our biggest night internationally since the epidemic began.”

“We expect the impact of Covid-19, as well as the emergence and spread of additional virus variations, including the Delta variant, will continue to have an influence on general travel behavior,” the firm stated.

It did, however, give a bright prognosis for the current quarter, expecting “the best quarterly revenue on record.”

Conference Call with CEO

The pandemic said to CEO Brian Chesky, has driven the home-sharing firm to become “much more rigorous and a lot more efficient.”

(Pic- walkercorporatelaw.com)

During a conference call, Mr. Chesky stated that Covid-19 will leave “indelible marks” on Airbnb. “When we first began Airbnb, lengthier stays were not a big component of the business,” he added. Long-term stays of 28 days or more are now the fastest-growing trip length category. Mr. Chesky described it as “not even traveling, but living.”

The coronavirus epidemic, which shut down most of the world’s vacation destinations last year, has wreaked havoc on the travel sector. Due to the remote work trend, when city workers abandoned their residences for prolonged stays in rental properties near beach towns and mountain communities, Airbnb outperformed competitors.

Bookings for the home-rental firm dropped by 80% in March of last year, but swiftly recovered by the summer.

Even before Covid-19, short-term rentals were the fastest-growing segment of the Internet tourism business. They’ve basically kept the sector viable over the last 18 months. According to an examination of data gathered by researchers AirDNA and STR, over 30 cents of every dollar spent in hospitality today is spent on short-term rentals.

 

Comments

comments

No more articles
Send this to a friend