Airbnb shares plunge 15% amid slowing demand forecast
Airbnb shares took a 15% dive following the company's announcement of an expected third-quarter revenue shortfall and shorter booking windows. The San Francisco-based company's forecast indicates that travelers are making last-minute bookings due to economic uncertainty. Airbnb reported a quarterly profit of $555 million in Q2, a decrease from last year's $650 million. The company's third-quarter revenue is projected to be between $3.67 billion and $3.73 billion, missing analysts' estimate of $3.84 billion as per LSEG data.
Airbnb experiences shorter booking windows, reflecting industry trend
Airbnb has noted a slowdown in the growth of nights booked for the third quarter and shorter booking lead times worldwide. The term "booking lead time" refers to the number of days between making a reservation and actual arrival. This trend toward shorter booking windows suggests that consumers are opting for last-minute travel due to increased uncertainty and caution in spending. This pattern aligns with recent reports from other industry players, including travel reservations provider Booking.
Analysts comment on Airbnb's position amid travel industry slowdown
Morningstar equity analyst Dan Wasiolek commented on the situation, stating, "The slowdown guided for the third-quarter echoes what others have noted in the travel industry." He added that while Airbnb is not immune to a travel demand slowdown, it remains a well-positioned brand for the long term. This statement comes as Airbnb and other industry players grapple with changing consumer behavior amid economic uncertainty.
Airbnb reports modest growth in average daily rate
The average daily rate (ADR), or cost per night, increased by about 2% to $169.53 in the reported quarter. Airbnb anticipates a modest growth in ADR for the third quarter. However, the company's net income margin fell to 20% in the second quarter, compared to 26% a year ago, indicating a decrease in profitability despite an increase in rates.
Airbnb sees growth in nights and experiences booked
Airbnb reported that nights and experiences booked numbered 125.1 million, marking a 9% increase from last year. The highest growth was observed in Latin America and Asia-Pacific, where nights and experiences booked jumped by 17% and 19%, respectively. Total revenue for the quarter ending June 30 was $2.75 billion, an increase of 11% from the same period a year earlier.
