Airbnb Inc. reported record sales and earnings that beat analysts’ estimates, proving the vacation-rental giant’s resilience even as the delta variant of Covid-19 prompted new travel concerns and restrictions.
Revenue grew 67% to $2.2 billion in the third quarter, Airbnb said in a statement Thursday. Analysts forecast $2.07 billion, according to data compiled by Bloomberg. Net income of $834 million far exceeded Wall Street’s expectation of $456.2 million. The shares rose in extended trading.
The San Francisco-based company warned in August that the number of nights and experiences booked in the third quarter, typically the busiest period of the year, would fall short of the total during the same period in 2019, due to the resurgence of Covid cases. But Airbnb, which dominates the market for alternative accommodations, has fared generally better than its rivals, benefiting as people opted to travel closer to home and often booked longer or more frequent stays to take advantage of flexible remote work policies. In September, Airbnb said it welcomed its billionth guest.
Chief Executive Officer Brian Chesky has said the new travel trends born from the Covid era are likely here to stay. “But something bigger than a travel rebound is happening,” he said in a letter to shareholders. People “can now work from anywhere, travel any time, and stay longer. For those who can work remotely, we believe that flexibility will be the most important benefit after compensation.”
Airbnb said it anticipates fourth-quarter revenue to be $1.39 billion to $1.48 billion. Analysts were looking for $1.43 billion.
Analysts at Cowen Inc. estimate that the alternative accommodations category has increased to about 33% of global lodging dollars from 24% before the pandemic. And Airbnb commands more than 50% of those bookings. In a report before Airbnb’s results were released, the analysts said they expect the alternative lodging category to hold onto most of its pandemic gains, tempered somewhat only by the eventual hotel-focused business travel recovery.
Airbnb said gross bookings, which include room nights booked and experiences, more than doubled to $11.9 billion. But that missed Wall Street’s estimates of $12.2 billion. Earnings before interest, taxes, deprecation and amortization, excluding some costs, were $1.1 billion. Earnings per share were $1.22, beating the 77 cents analysts had predicted.
Airbnb is poised to see a further boost in demand after U.S. restrictions on travel into the country are lifted on Nov. 8. Earlier this week, online hotel booking site Trivago posted strong results and pointed to vaccine progress in Europe and the Americas as increasing travel. Booking Holdings Inc., Airbnb’s biggest rival, reported a strong third quarter with gross bookings up 77% from a year earlier. Expedia Group Inc., which owns home-rental site Vrbo, is also reporting results Thursday.
Airbnb said it’s “encouraged to see these new travel trends extending beyond summer travel peak, and are looking forward to a strong” fourth quarter. As of the end of September, Airbnb’s backlog had more than 40% more nights booked for Thanksgiving week in the U.S. than in 2019.
The company, founded in 2008, went public last December. Its shares have gained 21% this year.