The travel recovery is on in many parts of the world, and Airbnb got a nice chunk of it. Its strategy is to capitalize on the long-term stays' trend, and to increase awareness about hosting opportunities.
Driven by Covid vaccinations and the easing of travel restrictions in parts of the world, Airbnb notched its best quarter ever, shattering records for both profits and revenue.
The company’s net income rose 280 percent year over year to $834 million, its highest-ever, on revenue of $2.2 billion, which was likewise a company record. The revenue mark shattered its level in the third quarter of pre-pandemic 2019 by 36 percent, which Airbnb said reflected the travel recovery on its platform.
“This summer, we reached a major milestone of 1 billion cumulative guest arrivals as more people got vaccinated and travel restrictions were relaxed,” the company said in a shareholder letter on Thursday. “Host earnings reached a record $12.8 billion in the quarter, and active listings continued to grow.”
Airbnb’s nights and experiences booked climbed 29 percent year over year in the third quarter to 79.7 million, but they were still 7 percent lower than the comparable period in 2019.
On the key question of building its supply, without providing a specific number, Airbnb said its active listings continue to grow. The company did say that in non-urban areas of Europe and North America have grown nearly 15 percent so far this year.
But that figure excludes cities and geographies such as Asia, where demand still is significantly depressed.
Key elements of Airbnb’s strategy are to keep marketing spend as a percentage of revenue lower than they were in 2019, which it is doing, to capitalize on the trend where guests have more flexibility about which destination to stay in, and to recruit more hosts by increasing Airbnb’s brand awareness.
“Earlier this year, we launched our first large-scale marketing campaign in five years, made possible by hosts,” CEO Brian Chesky told investors during the company’s third quarter earnings call Thursday. “We’re educating guests about the benefits of being hosted, and we’re also inspiring more people to become hosts, and we continue to be encouraged by the results of this campaign.”
Officials said Airbnb is recruiting more hosts, and making it easier for people to become hosts and get support, but they cited 4 million as Airbnb’s number of hosts — a figure that they used at the end of the second quarter, as well. As cities and international travel open up, however, that figure could climb.
Officials said that stays on Airbnb of 28 days or more were the fastest-growing type of stay in the third quarter, and they were one of the fastest growing even before the pandemic. But that stay type decreased from around 24 percent of stays in the second quarter to some 20 percent of stays in the third quarter.
Some 45 percent of Airbnb’s stays during the quarter were for seven nights or more.
Chief Financial Officer David Stephenson attributed that decline to an increase during the quarter of the number of short-term stays.
Airbnb’s gross booking value increased 48 percent year over year in the third quarter, driven by strength in nights and experiences booked, and higher average daily rates. Stephenson said he expects average daily rates to moderate once cities and Asia come back.
“And so yes, the decrease is just the fact that short-term stays continue to come back,” Stephenson said. “And in terms of the market opportunity in long-term stays, we think this adds hundreds of billions of dollars to our overall long-term TAM (Total Addressable Market) opportunity with long-term space.”
Have a confidential tip for Skift? Get in touch
Photo credit: Airbnb CEO Brian Chesky spoke at Skift Global Forum at JFK Airport in September 2021. The company shattered records on profit and revenue. Skift