Thursday 25 February 2021 9:30 pm

Airbnb reports better than expected revenue drop amid biting pandemic restrictions

Airbnb suffered a better than expected 22 per cent revenue drop in Q4 2020, having at one stage predicted 2020 revenue could be less than half of what it was in 2019.

Airbnb’s total revenue of $3.4bn for 2020 decreased by only 30 per cent compared with $4.8bn in 2019.

In Q4 2020, revenue of $859m declined only 22 per cent compared with $1.1 billion in Q4 2019, despite the second wave of Covid-19 cases and lockdowns the world experienced in Q4.

Airbnb co-founder and CEO Brian Chesky said: “Our performance in 2020 showed that Airbnb is resilient and inherently adaptable. Travel is coming back and we are laser-focused on preparing for the travel rebound.”

Airbnb also reported better-than-expected gross bookings on Thursday in its first quarterly earnings report since going public, indicating a strong rebound in demand for vacation rentals in North America as COVID-19 pandemic curbs ease.

Read more: Airbnb cancels all Washington bookings during Biden inauguration

Leisure travelers in the company’s biggest market stepped out to nearby locations that could be accessed by a car and are within 50 miles, lifting daily booking rates up by 13 per cent, Airbnb said.

Even though the health crisis initially forced it to cut jobs, the US vacation rental firm outperformed hotel operators who rely more on business travel, throughout 2020, thanks to its large share of ‘sun, ski, and suburban’ rental homes.

“Nights booked prior to cancellations in North America were close to the levels reached in the same quarter of 2019,” the company said.

Airbnb expects wider vaccine rollouts in 2021 to help a significant rebound in travel. It said both nights booked as well as gross bookings in the current quarter are expected to be higher than a year ago, but lower than the same period in 2019.

The company’s gross bookings fell 31 per cent to $5.9bn in the fourth quarter ended Dec. 31, but beat market expectation of $5.17bn, according to IBES data from Refinitiv.

Nights and experiences booked at Airbnb dropped 39 per cent to 46.3 million units, but was better than the Wall Street’s estimate of a 47 per cent drop.

Business in Europe was the most affected in the quarter due to travel curbs as a result of surging coronavirus infections.

Sooho Choi, global head of travel & hospitality at technology consultancy Publicis Sapient said: “Airbnb’s results, the first since their IPO, are indicative of the travel sector’s overall recovery – a stronger than predicted -30 per cent revenue YoY. Of course, costs associated with their IPO essentially contributed to an overall net loss for both Q4 and the fiscal year.

“However, we (Publicis Sapient) stand by our industry forecast from the beginning of the year that leisure will lead the recovery charge as advance booking windows continue to diverge.” 

IPO

In late 2020 Airbnb enjoyed a stunning debut on the stock market. Shares opened at $146 on the Nasdaq, far above the initial public offering (IPO) price of $68 apiece. The stock then hit a high of $165, rising 142.6 per cent after the debut. 

Despite its stock market success, 2020 proved to be a tricky year for Airbnb, having seen its revenues fall sharply from the levels seen in 2018 and 2019, with the likely prospect that they could take some time to bounce back, even with all of the recent optimism over a Covid-19 vaccine.

Read more: Overnight stays back on from 12 April, but PM bans holidays abroad until 17 May

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