Airbnb stock falls 4% after company warned Indian Delta variant could slow travel in the fall - despite 300% jump in bookings to $13.4 billion over the summer as economy reopened
- Airbnb reported four-fold increase in Q2 bookings to $13.4 billion on Thursday
- Revenue rose 10% over 2019 to $1.34 billion and losses shrank to $297 million
- But warned that Delta variant is slowing down bookings for the fall
- Company shares were down more than 4% in early trading on Friday
- Spread of Delta and lagging vaccinations threaten economic recovery
Airbnb has warned that fall bookings could be hit by the Delta variant of the coronavirus and a slowing pace of vaccination in the United States, sending its shares down despite a 300 percent increase in bookings this summer.
Shares of Airbnb dropped more than 4 percent in early trading on Friday, after the company said it expects booking in the current quarter to slow from the second quarter and remain below 2019 levels.
'As we exit the second quarter and come into the third, we have a combination of fewer bookings for the fall, just given the nature of some of the seasonality and any kind of impact potentially on COVID concerns,' CFO Dave Stephenson said on a call with investors on Thursday.
The hugely popular global app, which has fought back strongly since being hit hard early in the pandemic last year, posted a more than four-fold rise in bookings to $13.4 billion in the second quarter.
Airbnb has warned that fall bookings could be hit by the Delta variant of the coronavirus and a slowing pace of vaccination in the United States
Shares of Airbnb dropped more than 4 percent in early trading on Friday, after the company said it expects booking in the current quarter to slow down due to Delta
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But Airbnb said vaccinations, the containment of COVID-19 variants and restrictions on global travel will affect bookings for the rest of the year.
'We do not yet know how willing people will be to travel in the fall as compared to summer,' the company told shareholders.
Active listings have been roughly stable throughout the health crisis and grew during the quarter, especially in non-urban destinations across Europe and North America, the company said.
Airbnb´s business has picked up along with the recovery in travel that, at least in the U.S., began early this year as Americans began to get vaccinated against the coronavirus.
Many vacationers have looked to avoid crowds and steer clear of hotels, creating an advantage for Airbnb and rival Vrbo.
The home-sharing companies are less reliant than hotels on business travelers, who have been much slower to get back on the road.
However, like airlines, the home-rental companies face new uncertainty because of the recent surge in COVID-19 infections. Last week, Expedia, which owns Vrbo, reported that travel dipped and cancellation rates rose in July, and that the outlook for travel remains uncertain.
Despite the precarious state of the pandemic, Airbnb expects to post record revenue in the third quarter, 'well above' the 2019 peak of $1.65 billion.
That is based on a sharp rise in unearned fees, or revenue that - based on bookings - the company expects to receive after customers check in.
'In popular leisure markets you're seeing platforms offer increasingly generous incentives to hosts to secure quality inventory in order to meet demand,' wrote Dan Thomas, analyst at Third Bridge.
Indeed, Airbnb is spending heavily to recruit new hosts. CEO Brian Chesky said it is tweaking its product to appeal to people who are increasingly flexible about when and where they travel and who combine work and leisure for long trips.
Airbnb said that stays of at least 28 days are its fastest-growing category.
'Flexibility is now a permanent part of travel,' Chesky said on a call with analysts. 'We are going to continue to see more and more longer-term stays, and I think this is going to help us smooth out our seasonality over the coming years.'
CEO Brian Chesky said Airbnb is tweaking its product to appeal to people who are increasingly flexible about when and where they travel and who combine work and leisure for long trips
Hotels and other accommodation providers took a hammering last year as COVID-19 travel restrictions shut down large parts of their business.
Airbnb drew plaudits, however, for shifting its focus quickly to local and long-term rentals, attracting people looking for accommodations to rent for remote working or which did not require flying.
In the second quarter, Airbnb's loss compared with same-quarter losses of $576 million last year and $297 million in 2019. It worked out to a loss of 11 cents per share, less than the loss of 36 cents per share forecast by analysts in a FactSet survey.
Revenue rose 10 percent over 2019, to $1.34 billion, beating analysts' forecast of $1.26 billion.
The average daily rate for an Airbnb rental rose 41 percent from a year ago, to $161, which the company said partly reflected a higher percentage of bookings occurring in North America. It said price increases by hosts in high-demand destinations also boosted the average price.
