Airbnb just had its best quarter ever thanks to relentless demand for travel.
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Airbnb just posted its best quarter ever, beating expectations and reflecting a summer of insatiable travel demand as consumers returned to pre-pandemic behaviors.
The vacation rental platform’s third-quarter revenue rose 29% year-over-year to a record $2.9 billion. Net income rose 46% YOY to $1.2 billion, another record. The company had a record 90 million guest arrivals and booked nearly 100 million “nights and experiences,” 25% more than in last year’s third quarter.
But Wall Street sees some cracks. That 29% growth in the July-to-September period was half of the 58% growth the company saw in the April-to-June quarter. And Airbnb CFO Dave Stephenson said on Tuesday’s earnings call that he anticipates growth will slow in the next quarter to between 17% and 23%, sending shares down about 7% after the closing bell.
Despite the company’s strong financial performance, Airbnb shares have taken a big hit this year, falling by 37% since January. That’s slightly worse than average compared to the 30% plunge of tech-heavy Nasdaq but significantly worse than the 20% decline of the leading publicly traded companies on the S&P 500.
CEO Brian Chesky remained upbeat on the earnings call, noting that the company expected “strong European demand” in 2023 from U.S. travelers traveling overseas. “We feel very, very excited about our ability to continue to adapt given this challenging macroeconomic environment.”
“If you go back and compare back to 2019, we’re seeing stable to increasing demand across the globe,” said Stephenson. “I just think it just shows the stability of people wanting to get out of their homes, wanting to travel, regardless of the macroeconomic uncertainties.”
It’s been a very good year for the travel industry, buoyed by the best summer since the pandemic began. The largest legacy U.S. airlines reported third-quarter revenue in the double-digit billions, as executives crowed that strong travel demand is trumping any concerns over an economic slowdown.
Consequently, the Dow Jones U.S. Airline Index is up 20% in the past month, while the Dow’s hotel index is up 12% over the same period.
But last week, the U.S. Travel Association Travel reported mixed signs of recovery. Domestic travel spending is 6% above 2019 levels, its highest mark since the pandemic started. Yet overseas visitation is down 34% from pre-pandemic levels, as the strong dollar makes U.S. travel a very pricey pursuit for international travelers.
