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Airbnb Celebrates a Record Quarter

Airbnb posted its financials on Tuesday, November 1, 2022, which revealed a record third quarter in revenues and profits.

While unsurprising amid the continued high rates for vacation homes and short-term rentals, the booking agency is seriously cashing in on people’s mind-blowing demand for travel as COVID-19 dissipates. 

Net Income and Revenue Figures Take Airbnb to All-New Heights

The platform’s net income increased a whopping 46% year-over-year to amass $1.2 billion for the financial period ending September 30, 2022. Thus, it became the company’s highest-ever quarter. 

Likewise, the San Francisco-based agency generated $2.9 billion in revenue for the same quarter, displaying an increase of 29% from the previous year. 

But It Wasn’t Just Net Income and Revenue That Emphasized Airbnb’s Stronghold on The Market

The third quarter saw Airbnb take 90 million guest arrivals. And yes, that’s another record for the company. 

On top of that, they generated 99.7 million “nights and experiences” bookings, boasting a 25% year-over-year increase. 

The company’s chief executive officer, Brian Chesky, said there is no sign of decreases in long-term stays (one of the factors that helped Airbnb thrive during the COVID-19 pandemic) either. Even with workers returning to the office, long-term stays keep a 20% hold of the total gross nights booked through the platform.

It appears the industry-disrupting company is encouraging the hybrid worker to book through the platform by promoting extended stays in remote locations. 

In the financials report, Airbnb’s management team noted that guests are returning to cities and crossing borders again following an uprising of domestic and countryside stays during 2020 and 2021. The year-over-year growth for the former statistic was 27%, and cross-border bookings hiked by 58% year-over-year.

Airbnb’s 2022 Summer Release

May 11, 2022, saw Airbnb launch a bunch of brand-new features in their 2022 Summer Release update.

The main function was Airbnb Categories, which categorized stays in wholly imaginative ways, such as castles, treehouses, amazing views, cabins, and many more. To date, the feature has been used over 300 million times, boosting website traffic for the company.

However, Airbnb’s next challenge is to convert window shoppers to traveling guests, as many who browse the categories aren’t ready to book. 

On the flip side, management has been focusing on the platform’s brand marketing — and it has certainly paid off because more than 90% of the company’s website traffic is unpaid or direct.

AirCover was also launched in the 2022 Summer Release. It’s an inbuilt travel insurance policy provided at no extra cost and is unique to the company, ensuring it stands out from the crowd.

A Look at The Coming Fourth Quarter

Airbnb is no stranger to turmoil. After all, the company lost 80% of its business when travel bans were inflicted during the pandemic.

However, Chesky mentions that the agency is now prepared for the potential recessionary environment without needing to adjust hiring plans. 

Moving forward, Airbnb predicts between $1.8 billion and $1.88 billion in revenue, forecasting a growth of 17% to 23%. It’s looking to be a slower quarter than the company’s third quarter, but positive, nonetheless. 

Analysts state this is mainly to do with the cyclical trends of the travel industry — summer peaks and winter slowdowns. Although, FX headwinds and the macroeconomic climate are also playing a part in the coming quarter. 

But the company is in a great position to handle storms. The balance sheet is robust, with a jaw-dropping $9.6 billion in cash, marketable securities, cash equivalents, and restricted cash. Plus, management has authorized $2 billion of stock buybacks, offsetting dilution from the workers’ stock programs. 

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