Airbnb said revenue increased 5% in the first quarter, beating analysts’ estimates, as the rapid pace of vaccinations led to more travel. The company’s net loss tripled because of debt repayments and restructuring costs.
Here’s how the company did:
- Earnings: Loss of $1.95 per share
- Revenue: $886.9 million, vs. $714.4 million as expected by analysts, according to Refinitiv.
The increase in year-over-year revenue followed a 22% decline in the fourth quarter.
The coronavirus pandemic considerably curtailed rental activity on Airbnb, but the business appears to be recovering as vaccines becomes more widely available and governments lift travel restrictions. The company reported 64.4 million nights and experiences booked, up 39% from the fourth quarter and up 13% year over year. Analysts polled by FactSet had expected 62.5 million nights and experiences booked.
Booking nights dropped in every quarter last year compared with the same period in 2019.
Gross booking value, Airbnb’s way of tracking host earnings, service fees, cleaning fees and taxes, totaled $10.3 billion, up 52% year over year and above the $7.87 billion FactSet consensus.
Airbnb’s net loss tripled as it repaid debt for loans it took out early in the pandemic, and as the company continued to pay restructuring fees following layoffs. It also had a $113 million impairment related to office space in San Francisco.
Its average daily rate rose 25% from the prior quarter to $160, reflecting an increase in the amount customers are spending for homes and experiences. Airbnb pointed to strength in bookings in North America, along with complete homes and locations outside cities, all of which tend to bring higher rates. The company said 24% of nights booked came from stays of at least 28 days, compared with 14% in 2019.
“The two trends I do think are going to invert are we are going to see a recovery of urban travel and a recovery of cross border,” Airbnb CEO Brian Chesky said on a conference call with analysts. “This has been our bread and butter before the pandemic, and I think those are significant tailwinds for us.”
Chesky talked about the potential to offer deals to travelers who can be flexible about when they travel.
“There’s a lot of other opportunities for us, I think, to point demand to where we have available supply, which will allow us to steadily increase occupancy,” he said.
Cancellation rates are now considerably lower than in 2020 but remain higher than they were in 2019, said Dave Stephenson, the company’s finance chief.
The company issued general commentary on the quarters ahead, saying that in the second quarter its adjusted earnings margin before interest, taxes, depreciation and amortization could break even or be slightly positive. That margin was -7% in the first quarter, and it should be higher in the second half of the year than the first half, Airbnb said in a letter to shareholders.
“We expect revenue in Q2 2021 to be significantly higher than that of Q2 2020, given the impact of Covid- 19 on the prior year period, and to be at a similar level to that of Q2 2019,” the company said. “In Q2 2021, we expect the positive momentum of recovery experienced in Q1 2021 to be partially offset by the continued uncertainty of travel restrictions and lockdowns in EMEA.”
The company said it’s too soon to say whether the recovery in the first half of the year will keep the same pace in the second half.
“Although we have seen booking lead times start to lengthen when compared with Q4 2020, we continue to have limited visibility for growth trends in the second half of 2021,” Airbnb said. “With the increased availability of vaccines and the easing of some travel restrictions, there has been greater willingness by guests to search for and book travel later in the year. Offsetting this is the difficulty in predicting factors such as future Covid-19 outbreaks or travel restrictions globally, which impact the actual rate at which guests complete their stays (at which point we recognize revenue).”
Airbnb reported financials for the second time as a public company, having completed its IPO in December. Airbnb shares have fallen about 8% since the start of 2021, while the S&P 500 is up about 10% over the same period.
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