What Separated Airbnb From Online Travel Rivals in 2nd Quarter – in One Chart

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Editor’s Note: Every Wednesday, Executive Editor and online travel rockstar Dennis Schaal will bring readers exclusive reporting and insight into the business of online travel and digital booking, and how this sector has an impact across the travel industry.

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Airbnb called it correctly last week when it stated in its second quarter shareholder letter that “since the beginning of the pandemic, Airbnb has significantly outperformed the rest of the travel industry.”

We decided to dig deeper into Airbnb’s second quarter performance versus that of Booking Holdings, Expedia Group, India’s MakeMyTrip, and Tripadvisor, and compare them to how they were operating before the pandemic in the second quarter of 2019. China’s Trip.com Group hasn’t yet reported its June quarter.

As you can see from the accompanying chart, Airbnb jumped back faster than its peers when measured against the same period in 2019 in every category we tracked. Airbnb’s revenue and gross booking value grew 73 percent each, its room nights and experiences category was up 24 percent (experiences was not likely a significant portion of this metric,) and its improvements in adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) and net income led all comers.

For example, Airbnb net income of $379 million in the second quarter of 2022 amounted to a $676 million improvement compared with the net loss it recorded in the second quarter of 2019.

Online Travel Second Quarter 2022 Gains/Losses Versus Second Quarter 2019

Source: Financial filings

Note: *The net income figures show the improvements in the June quarter of 2022 versus the same period in 2019. ** MakeMyTrip’s figures are for its fiscal 2023 first quarter, which ended June 30. It reported adjusted operating profit, and not GAAP net income.

Airbnb attributed its superior performance to an adaptable business model, and the fact that it can trot out the right type of supply in many parts of the world depending on how conditions evolve.

“If we were only, say, a vacation rental destination-type company, you can tap out in either supply and even demand in those kind of areas,” said Airbnb Chief Financial Officer David Stephenson last week in what might have been a dig at Expedia Group’s Vrbo unit, which predominantly offers whole homes. “But that’s really — we have such a diversity of supply around the world that we’re able to continue to grow quite well.”

To be sure, Airbnb’s leading metrics compared against the pre-pandemic era isn’t just about execution or even inventory flexibility alone. These major online travel companies are very different from one another. Expedia and Booking are both much more dependent on a hotel recovery than Airbnb, which doesn’t offer many compared with its two rivals, and Booking is more dependent on a European rebound than Airbnb and Expedia.

At the same time, Expedia had an advantage over Booking Holdings in that the U.S. is Expedia’s strongest market, and it benefitted to some extent because Europe was slower to recover, a fact that hampered Europe-centric Booking. However, Booking is believed to be making some gains in the U.S.

Booking Holdings, which was the second strongest among the major online travel companies, with a revenue gain of 10 percent compared to the second quarter of 2019, a gross bookings jump of 38 percent, and room night growth of 15.5 percent, benefitted to some unspecified extent from its acquisitions of hotel wholesaler Getaroom and flight booker eTraveli Group during the pandemic. Airbnb didn’t make any major acquisitions during the period, and Expedia is shedding brands.

For example, Expedia’s revenue and room night numbers in the second quarter of 2022 versus the June quarter of 2019 were negatively impacted a bit because Expedia sold its corporate travel unit, Egencia, to American Express Global Business Travel in November 2021. Egencia chipped in with $163 million in revenue in the second quarter of 2019.

Tripadvisor was the lone company among the quintet that hasn’t surpassed its second quarter of 2019 revenue, but it did make a $31 million profit in the second quarter of 2022. Tripadvisor’s revenue was at 99 percent of 2019 levels in the June quarter of 2022, and the company said it expects to surpass the 2019 milestone during the third quarter of 2022.

One question looms about Airbnb’s pandemic gains: Will the disparity diminish once the recovery of cities, and long-haul travel accelerates?

In Brief

U.S. Treasure Department Begins a Civil Probe of Airbnb

Airbnb said the U.S. Treasury Department’s Office of Foreign Assets Control began a civil investigation related to payment instructions involving hosts with accounts in sanctioned Russian banks. Skift

Booking Holdings Accelerates Discounting as a Supplement to Performance Marketing

Booking Holdings is turning to discounting in a bigger way than it has done in the past to entice repeat business. The company said this may negatively impact its commissions, but it is willing to take a hit for longer-term gains. Skift

Viator Is the Hottest Thing at Tripadvisor

Viator is the strongest growing part of Tripadvisor. Viator, the tours and activities seller, saw its second quarter revenue grew 240 percent year over year to $136 million with improved demand in European travel part of the reason. Tripadvisor separately broke out the financials of Viator and TheFork for the first time last week. Skift