Checking in on Airbnb

Airbnb Outperforms Hotels

Last week, Airbnb (ABNB) reported results for the fourth quarter—its first report after its IPO. The home-share platform has performed much better than other sectors of the travel industry over the past year.

Airbnb shared that revenue was down 22% year over year, which is not ideal, but much better than Marriott (MAR) and Hilton (HLT), which have seen year-over-year revenue drop by an average of 61%. Travel booking platforms, like Expedia (EXPE) and Booking Holdings (BKNG) have also seen year-over-year revenue tumble.

Long-Term Bookings Climb

Airbnb has seen long-term bookings climb as the pandemic drags on and people are seeking out new places to work and social distance at home. The company’s leadership expects that business will get a boost as more people become vaccinated and feel comfortable traveling.

There is pent up demand for travel, and many people will likely feel that staying in an Airbnb is safer than staying in a crowded hotel. Some analysts believe that the pandemic will have a permanent impact on the balance in market share between hotels and home-share services.

International Demand Likely to Stay Slow for Some Time

The company still faces a bumpy road to full recovery despite Airbnb’s recent victories. International travel for leisure is still almost nonexistent. This will likely be the case until more people are vaccinated, government restrictions on travel are lifted, and people feel more comfortably flying again.

Though domestic Airbnb rentals in remote locations have been popular this year, the majority of the company’s offerings are outside the US in urban areas. The past year has been eventful for Airbnb, and the coming months will likely bring more twists and turns.

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