Another strong earnings report out of Airbnb for the first quarter of 2021 as the vaccine rolls out and consumers nationwide gear up to get back out there again, spurring what CEO Brian Chesky forecast to investors would be a heretofore unprecedented recovery for the travel market as a whole over the course of 2021.
“We are encouraged by the trends that we’re seeing driving these results, and we are executing on our 2021 plan to prepare for the travel rebound that we think will be unlike anything we’ve ever seen before. We think this is the travel rebound of the century,” Chesky told inventors on a call.
A rebound, Airbnb’s Global Head of Payments Sam Shrauger told Karen Webster when he sat down for the ConnectedEconomy™ series discussion last week, that is driven by one simple reality overall: People really want to get out of their houses, but not necessarily into a hotel.
“Many people were just tired of working remotely in their own homes, and if they were going to do it for a long period of time, they wanted to do it somewhere other than their home,” Shrauger remarked.
That desire to get back out there is pushing what Airbnb believes will be a historic travel rebound. A rebound, he repeatedly reiterated during today’s earnings call, that will mean changes, particularly to business travel going forward — but an undeniable rebound nonetheless, powered by consumers’ strong desire to get back out there, and possibly pulled by a wider range of acceptable destination outcomes.
Signs of that oncoming recovery were visible in Airbnb’s quarterly results — booking continued to increase as vaccines became more widely available and governments lifted travel restrictions. Consumers booked 64.4 million nights and experiences, a 39 percent pick-up from the fourth quarter and a 13 percent year-on-year rise that came out ahead of analysts’ estimates of 62.5 million nights and experiences booked. Gross booking value, Airbnb’s in-house mechanism for tracking host earnings, service fees, cleaning fees and taxes, hit $10.3 billion, up 52 percent year over year and well ahead of the $7.87 billion consensus estimate pre-release.
Net loss was also way up — tripling year on year — mostly an outcome of repaying debt for loans Airbnb took out early in the pandemic, and as the company continued to pay restructuring fees following layoffs.
Still, growth remained evident on the platform as daily average rate increased 25 percent from the prior quarter to $160, pointing to a rising number of customers looking to get back out there and willing to spend a bit more to do it. Chesky told investors the company has observed a wider flexibility among guests when it comes to choosing where they will rent lodgings. Pre-pandemic it saw a strong preference for space in tier-1 cities like New York and L.A., while in the post-pandemic recovery consumers are willing and even looking to think more widely when it comes to their rental choices. And that new flexibility, Chesky said, is an opportunity for Airbnb to connect more fully with its customers and expand the platform’s range and usefulness.
“There’s a lot of other opportunities for us, I think, to point demand to where we have available supply, which will allow us to steadily increase occupancy,” he noted of the coming curation efforts.
Chesky went on to predict many coming changes to the travel market, particularly the business travel space. That, he forecast, will come back — but not quite in the form we knew it before.
“I do think a new kind of business travel may emerge. Many employees are working remotely, they’re going to need to go back to headquarters occasionally — you’re going to see longer stays in cities. And so we’re seeing elevated bookings in the urban market for stays longer than 28 days. But the bigger trend is going to be a bigger turn because most of us working around the world, we’re privileged enough to say that we are more flexible than we were before the pandemic.”
Traveling and normal life used to be totally separate events — now, he noted, they are able to be increasingly blended, and Airbnb is seeing the result of that bleeding playing out on its site.
As for what’s next, Airbnb is forecasting significantly higher revenue in 2021 than it saw in 2020, given the impact of the international pandemic on last year’s results. The most recent quarter has seen the start of the moment of recovery pushing through the system. Whether that pace will keep up in the second half of 2021, Airbnb could not forecast.
The company said it’s too soon to say whether the recovery in the first half of the year will keep the same pace in the second half, given the remaining uncertainties around the pandemic itself.
But Airbnb is preparing for a very active future either way, Chesney told investors — and within about two weeks, at its investor day, the company will be offering the next major peek behind the curtain at its latest strategy to take on a rapidly realigning market. What we’ll see remains an unknown, but Airbnb is promising it will be big — and well worth watching.
On May 24th, Chesney told investors as he wrapped his comments, the firm will offer up “a major announcement,” the most comprehensive update to the Airbnb service in 12 years, and share insights on how travel is fundamentally changing — and how the company plans to help their hosts change with it.
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