The year 2020 was, to put it mildly, a difficult one for nearly all travel industry players, as consumers’ enthusiasm for travel bottomed out in response to the global health crisis. But there were some exceptions, as home-sharing juggernaut Airbnb has demonstrated. In a new blog post, the firm offered up some new data from an internal report indicating that in the last year alone, new Airbnb hosts have collectively brought in over one billion dollars.
“The COVID-19 pandemic has sent travelers looking for safe, comfortable settings in which to connect with family and friends, creating economic opportunity for others to earn needed extra income by listing their homes on Airbnb,” the post read. “We are gratified to be able to announce that new hosts with only one listing who have welcomed their first guests after the start of the pandemic have already earned more than $1 billion.”
The report also documents consumers’ changing attitudes about travel, noting that when the passion to get out on the road returns, it will likely be about connecting with loved ones through more personal trips as opposed to the mass-scale tourism that abounded pre-pandemic. That finding matches up with PYMNTS data that has consistently demonstrated throughout the course of the pandemic that consumers’ leading priority is to resume spending time with friends and family.
But, given the pent-up demand for travel, Airbnb heads into tomorrow’s earnings report (its first as a public company) with high expectations. The firm has seen its stock price rise from $68 a share on the day of its IPO to a little over $200 on the eve of its first earnings report.
Some analysts are also expecting a blowout report tomorrow (Feb 25), though other expectations are more measured. Airbnb, like most travel players, saw its business crushed in the first half of 2020 by the pandemic, but managed an impressive comeback in the second half, reporting $219 million on $1.34 billion in revenue amid aggressive cost-cutting and an increasing willingness of consumers to travel — at least domestically. Airbnb “has shown it is more resilient to this particular shock to travel,” Tom White, an analyst for D.A. Davidson, told MarketWatch.
It remains to be seen whether that will be enough to boost the brand during Q4, as COVID-19 cases started spiking again, leading to notable falloffs for other travel companies like Expedia, which could also end up weighing down Airbnb’s earnings. The firm warned as much back in December: “During the fourth quarter of 2020, another wave of COVID-19 infections emerged. As a result, countries imposed strict lockdowns, in particular in Europe. Similar to the impact of the initial COVID-19 wave in March 2020, we are seeing a decrease in bookings in the most affected regions. As a result, we expect a significantly greater year-over-year decline in Nights and Experiences Booked and GBV in the fourth quarter of 2020 than in the third quarter of 2020, and greater year-over-year increases in cancellations and alterations in the fourth quarter of 2020 than in the third quarter of 2020.”
The consensus among analysts at present is to look for less than $750 million in fourth-quarter revenue.
But despite Q4 setbacks, Airbnb is intent on rolling forward, announcing on Tuesday morning (Feb. 24) a new booking product called Flexible Search, which will allow users to bypass searching for specific dates when booking lodging on the platform. Instead, they can search for a weekend getaway, week-long vacation, month-long vacation or months-long vacation without setting dates. “Our new Flexible Dates feature aligns with a broader shift in how people will travel in the future. The traditional travel industry was built around fixed destinations with fixed dates in mind, but that model no longer meets the needs of today’s travelers,” Airbnb noted in the announcement.
Whether Airbnb will continue to set itself apart from the rest of the segment when its earnings go public remains to be seen. But whether it’s a blowout or a blow-up, Airbnb is signaling that travel is coming back — but it won’t be the same as it once was. At least, not if Airbnb has anything to say about it.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More