The rise in inflation may push more and more families to offer their properties on Airbnb, according to company founder and CEO Brian Cesky, who said this in response to investors’ concerns about limited supply on the apartment-sharing platform, amid a recovery in demand.
Read more in Calcalist:
In a conversation with investors yesterday, the company noted that it expects bookings to return to pre-plague levels for the first time this quarter, after concerns about the Omicron strain “evaporated quickly” and people returned to feeling more comfortable about travel.
But the company is still struggling to find new hosts to join the platform or renew their membership. According to Airbnb, it has 6 million active listings compared to 5.6 million in the same period last year. The increase, although relatively small, was recorded in parallel with the easing of the corona closures, combined with significant efforts made by the company in marketing the platform and improving the toolbox available to the hosts.
Cesky predicts that in the coming year, inflation will affect the company’s growth patterns. “Factors like inflation are putting more pressure on families around the world, and they will need an economic opportunity so that they can work their way through these difficult times,” he said. His remarks come amid an inflationary surge that has reached the fastest annual rate in the United States in 40 years.
According to Cesky, the company’s I Flexible ‘feature recently introduced – which markets available properties to clients who have no time or place preference – has been used in 800 million searches for accommodations since May, 2021, directing demand to places where supply was plentiful.
AirBnB: The omicron did not cause significant violations
“At the global level we are not limited in terms of supply at any night of the year,” Cesky said in response to many questions posed by analysts about asset shortages. “The challenge is that too many people go to too many places at the same time.” According to him, guests place their bookings for summer travel earlier this year, with bookings for the peak months being 25% higher than the corresponding period in 2019.
Airbnb’s optimism about the recovery in the travel industry comes following a similar sentiment expressed by American Express, which reported last month that travel bookings in January grew by 44% compared to the same period in 2019. The credit card company predicts that future varieties of Corona will have a “very little impact” on consumer spending on products and services. Accordingly, Airbnb noted that the omicron did not cause significant violations, in contrast to the cancellations recorded at the peak of the Delta strain. In the last quarter of 2021, higher prices served as the engine of revenue growth and profits, which were higher than expected, even though the volume of orders has not yet reached pre-epidemic levels.
In October-December, the number of “nights and experiences” booked, which included Airbnb’s guided events and travel business, significantly smaller than its lodging activity, climbed 59 percent from 2020 but was still 3 percent lower than the same quarter in 2019. The average rate per night was $ 153.61, more than a third higher than in the period before the epidemic, which led to a 91% increase in the value of gross bookings compared to 2020 and 32% higher than the value in 2019.
Revenue grew by 78% compared to the same quarter a year earlier, and by 38% compared to the same quarter in 2019, to $ 1.5 billion. According to Airbnb, revenue for the current quarter will range from $ 1.41 billion to $ 1.48 billion.
Gross revenues and orders were at a level that matched Wall Street expectations, according to data reported by FactSet. The growth in Airbnb’s revenue, whose business turned out to be more resilient during the plague months compared to those of its competitors, is now lagging behind that of the major hotel chains and leading travel booking platforms Expedia and Booking.com.
Significant cost cuts in product development and marketing, and a lower level of stock-based pay packages following the December 2020 IPO, helped Airbnb post a net profit of $ 55 million in the fourth quarter, significantly higher than the top $ 33 million forecast. EBITDA (earnings before interest, taxes, depreciation and amortization) was the highest ever, at $ 333 million, according to the company. Airbnb CEO Brian Cesky. Jump in orders for the summer months