Airbnb sees fourth-quarter revenue below estimates on travel demand slowdown - The Straits Times

NEW YORK – Airbnb forecast fourth-quarter revenue slightly below Wall Street estimates on Wednesday, as tourists scale back on travel due to rising costs, uncertain economic conditions and geopolitical turbulence.

Revenue for the three months ending in December will be US$2.13 billion (S$2.9 billion) to US$2.17 billion, falling short of analysts’ average estimate of US$2.18 billion, the company said on Wednesday in a letter to shareholders.

Airbnb expects the pace of growth in nights booked to “moderate” relative to the third quarter.

“We are seeing greater volatility early” in the fourth quarter, the company said, adding that it is “closely monitoring macroeconomic trends and geopolitical conflicts that may impact travel demand”.

Airbnb shares slid about 3 per cent in extended trading after closing at $119.47 in New York.

They had gained 40 per cent in 2023 through the close on Wednesday.

Airbnb’s results add evidence to hints that the post-pandemic travel boom may be running out of steam heading into the year-end holiday season.

Airlines and other travel companies including Airbnb saw record demand over the summer, a phenomenon dubbed “revenge travel”, as people proved willing to swallow high prices for flights and lodging to fulfil their pent-up post-Covid-19 itineraries.

But some travellers have started to draw the line.

The projected slowdown is coming after a sizzling summer.

Airbnb’s third-quarter revenue surpassed Wall Street’s expectations, jumping 18 per cent from a year earlier to US$3.4 billion.

The company reported 113.2 million nights and experiences booked during the period, up 14 per cent and slightly ahead of the average estimate.

After benefiting from long-term, domestic stays in rural areas during the pandemic, more guests have returned to cities, Airbnb said, with high-density urban nights booked rising 15 per cent in the third quarter from a year ago.

International travel is also back, with cross-border nights booked increasing 17 per cent.

The Asia-Pacific business has fully recovered to pre-pandemic levels.

Airbnb is conscious that the cost of stays plays a big part in its success – and its competition with hotels – and has introduced new tools to help hosts set appropriate pricing.

The average nightly price of a one-bedroom listing on Airbnb in September was US$120, up 1 per cent from a year earlier, while hotel prices have increased 10 per cent to US$153, according to the company.

Chief executive Brian Chesky has been working to refine the platform and adapt to the shift in post-pandemic travel patterns – such as an increase in long-term stays of 28 days or more – as well as consumer demands for quality stays and reliable service.

Among the more than 50 feature updates the company announced earlier in 2023 are more in-depth user profiles that are laying the foundation for better matching of hosts and guests and plans for verified badges for listings to come in 2024.

Next week, Airbnb is also expected to introduce a dozen product upgrades to make the platform “more reliable” and help guests “understand exactly what to expect before they book”, according to the shareholder letter. BLOOMBERG, REUTERS

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