Airbnb Reported Better Than Expected First-Quarter Results
The revenue of the home-renting company rose 5% in the first quarter and surpassed expectations as the rapid pace of vaccinations led to more travel. The increase in year-over-year revenue followed a 22% drop in the fourth quarter. Airbnb reported financials for the second time as a public entity, having completed its IPO in December. As of May 13, its shares fell about 8% since the start of 2021.
As in the case of many companies, Airbnb suffered losses due to the coronavirus pandemic in 2020. Booking nights fell in every quarter in 2020 compared with the same period in 2019.
The pandemic considerably curtailed rental activity on Airbnb, but the business appears to be recovering as vaccines become more widely available. It reported 64.4 million nights and experiences booked, up 39% from the fourth quarter.
Gross booking value, the company’s way of tracking host earnings, service fees, cleaning, and taxes, totaled $10.3 billion. Gross booking value rose 52% year over year and also exceeded expectations.
The company’s net loss tripled as it handled loans it took out early in the pandemic. It continued to pay restructuring fees following layoffs. The San Francisco-based company also had a $113 million impairment related to office space in San Francisco.
Airbnb’s average daily rate rose 25% from the previous quarter to $160, reflecting an increase in the amount customers are spending for homes and experiences. Airbnb highlighted the strength in bookings in North America, along with complete homes and locations outside cities. The San Francisco-based said 24% of nights booked came from stays of at least 28 days. Currently, cancellation rates are noticeably lower than in 2020 but higher than they were in 2019.
Airbnb and next quarters
The company issued general commentary on the quarters ahead. It stated that in the second quarter its adjusted earnings margin before interest, taxes, depreciation, and amortization could break even or be slightly positive. The margin was -7 in the first quarter of the year. It should be higher in the second half than in the first half of the year.
The company expects revenue in the second quarter of the year to be higher than that of Q2 2020. Airbnb also mentioned the impact of continued uncertainty of travel restrictions and lockdowns on its business in Q2 2021. The home-renting company said it’s too soon to say whether the recovery in the first half will keep the same pace in the second half.
