By Abhijith Ganapavaram and Kannaki Deka
-Airbnb Inc forecast on Tuesday a better-than-expected first-quarter revenue after the short-term home rental company reported strong quarterly results on rising domestic travel and longer stays by guests at higher prices.
While the San Francisco-based company was initially hit by the pandemic, its business rebounded as people took trips closer to home where they stayed for longer to work remotely. The trend has since continued with “non-urban gross nights” booked up about 45% in the fourth quarter versus 2019.
“There’s this entire acceleration in this new category of travel, which is that people are less tethered to an office, so they can now live anywhere,” Chief Executive Officer Brian Chesky said during a conference call with analysts.
Strong demand helped push up prices charged by hosts, with average daily rates during the fourth quarter up 20% at $154. The company expects the higher rates to bolster first-quarter results.
“Positive ADR trends into early 2022 should alleviate fears of a more rapid normalization in pricing,” Baird Equity Research analyst Colin Sebastian said.
Airbnb said it expects current-quarter revenue between $1.41 billion and $1.48 billion, higher than analysts’ estimates of $1.24 billion, according to Refinitiv IBES.
Bookings are expected to significantly exceed pre-pandemic levels, leading to a record gross booking value.
Airbnb reported a profit of 8 cents per share and revenue of $1.53 billion. Analysts had expected the company to earn 3 cents per share and a revenue of $1.46 billion.
The company, which is not particularly reliant on big cities to generate revenue, got a boost from travel demand, with the hospitality sector shrugging off a temporary impact from the Omicron variant.
Marriott International Inc reported results on Tuesday that beat estimates and the hotel chain said travel recovery remained intact.
Airbnb’s shares were up 3.7% at $186.73 in after-market trading.
(Reporting by Abhijith Ganapavaram and Kannaki Deka in Bengaluru; Editing by Shounak Dasgupta and Sherry Jacob-Phillips)