Airbnb, the American shared lodging platform, upgraded its third-quarter performance outlook, buoyed by strong summer travel demand. However, concerns were also raised that growth may slow at the end of the year due to exceptionally high performance in the second half of last year, leading to a decline in stock prices.
According to Bloomberg News on the 6th (local time), Airbnb predicted through a shareholder SEOHAN ENGINEERING & CONSTRUCTION that the increase rate of its core metric, 'nights and seats booked,' would stabilize at the second quarter level (7.4%). During the same period, revenue is expected to be between $4.02 billion and $4.1 billion, exceeding market consensus based on the median.
According to SEOHAN ENGINEERING & CONSTRUCTION, Airbnb noted, 'Recently, travel demand has been stronger than expected, and performance has also shown an upward trend,' adding that 'especially in July, the pace of bookings accelerated, particularly in the North American region.'
Earlier, Airbnb reported that its second quarter results also exceeded market expectations significantly. The total number of booked nights reached 134.4 million, a 7.4% increase compared to the same period last year, and revenue surpassed expectations at $3.1 billion, exceeding the forecast of $3.03 billion. Net profit was also reported at $642 million, surpassing Wall Street's estimate of $599.3 million.
By region, Latin America and the Asia-Pacific region showed double-digit growth rates. In particular, analyses suggest that product development and marketing strategies reflecting local preferences in the Brazilian and Japanese markets have led to a surge in new user acquisitions.
In addition, buoyed by approximately $1 billion in free cash flow recorded in the second quarter, Airbnb announced a new share buyback plan worth up to $6 billion. This stands in stark contrast to the conservative forecasts from online travel agency Booking Holdings, which warned of a decline in travel demand amid economic uncertainty.
However, it is uncertain whether this growth trend will continue into the fourth quarter. Last year's explosive growth in travel demand, which had been suppressed due to COVID-19, could create a base effect this year that puts pressure on growth rates, according to the company.
Meanwhile, Airbnb is accelerating efforts to diversify revenue sources beyond its existing lodging-focused business model. For example, the 'Experiences·à la carte' service launched in May allows travelers to book professional services such as chefs, trainers, and photographers individually, with over 60,000 applications received to date. However, it seems more time will be needed for the service to lead to significant revenue.
Uncertainty is also affecting investor sentiment. Shortly after the earnings announcement, Airbnb's stock price fell 6.3% in after-hours trading, which is interpreted as a reflection of market concerns over potential declines in travel demand in the second half of the year and the profitability of new services.
Brian Chesky, CEO of Airbnb, stated, 'It is true that Airbnb is at a competitive disadvantage compared to the points systems run by hotels or online travel agencies (OTAs),' and added, 'We are conceptualizing a more creative and engaging customer loyalty program.'