(Reuters) -Airbnb Inc on Tuesday forecast current-quarter revenue above market estimates on resilient travel demand and said it would keep a tight lid on costs to protect margins, sending its shares 10% higher in extended trading.
The rental firm said it expects to maintain last year’s margin of 35%, the highest since it went public in 2020, despite recession fears that have sparked concerns about consumer spending.
It said domestic and short-distance travel continued to be strong, boosting occupancy rates at popular urban destinations, and noted improvement in long-distance and cross-border travel during the reported quarter, helped by a stronger dollar and border reopening.
“We’re particularly encouraged by European guests booking their summer travel earlier this year,” Airbnb said.
The company forecast first-quarter revenue between $1.75 billion and $1.82 billion, higher than analysts’ average expectation of $1.69 billion, as per Refinitiv data.
It also forecast that average rates for its rentals would fall slightly in the current quarter and remain pressured through 2023, as vacationers return to lower-cost urban rentals.
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Revenue in the holiday quarter ended December rose 24% to $1.90 billion, lower than the preceding two quarters, but beat analysts’ average estimate of $1.86 billion.
Meanwhile, average daily rates fell 1% to $153 and bookings rose 20% to $13.5 billion, below analysts’ average expectation of $13.69 billion.
Airbnb reported a quarterly net profit of $319 million, or 48 cents per share, above estimates of 25 cents per share, according to Refinitiv data.
(Reporting by Aishwarya Nair in Bengaluru; Editing by Shinjini Ganguli)