(BFM Bourse) – The online platform for renting accommodation or guest rooms revealed results better than expected for its fourth quarter. But the financial director said he expected stable demand in the first quarter.
Since its IPO with fanfare in December 2020, which allowed it to exceed $100 billion in market capitalization, Airbnb has had a bit of trouble on the stock market. Its price is now quite far from its 2021 peak of $212 and the stock has had a bumpy ride, which seemed to reflect both the health disruptions and, in 2022, the rise in interest rates.
The group has recently remained on a good trend since the start of 2023 and the stock has gained 25% over one year. But Airbnb is however preparing to falter on Wall Street. The company’s stock fell 4.4% in pre-opening trading, following the release of its fourth quarter results.
However, the group exceeded expectations over this period. Airbnb had warned that the intensification of the conflict between Israel and Hamas had increased volatility and risked penalizing travel demand.
This didn’t really slow down the group. In the fourth quarter, Airbnb’s revenues increased by 17% to 2.22 billion euros, almost the same growth rate as in the third quarter (+18%). According to a consensus cited by Bank of America, analysts on average expected revenues of just $2.16 billion.
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Heading towards Switzerland and the Netherlands
The number of reservations increased by 12% to 98.8 million. The average rate for a night increased by 3% to $157 and by 1% excluding currency effects. This allowed the company to post 15% growth in gross booking value to $15.5 billion. The number of hosts stood at 5 million over the period.
On other account lines, the net loss stood at $349 million, due to exceptional items including a tax dispute with the Italian administration. Adjusted net income stood at $489 million, which marks the most profitable quarter in the group’s history according to Airbnb.
The company says it has worked over the past three years to improve its services to make Airbnb a “more affordable and reliable” option for housing. “We are already seeing a positive impact. For example, accommodation cancellations decreased by 36% in the fourth quarter of 2023 compared to the same period in 2022. And two thirds of our hosts now offer weekly or monthly discounts,” explains the society.
The group now intends to invest in underpenetrated markets to fuel its growth. “Following the success experienced in recent quarters in Germany, Brazil and Korea, we are now expanding our strategy to countries such as Switzerland, Belgium and the Netherlands,” explains the company.
Stock buybacks and the Olympic Games
Regarding its outlook, Airbnb said it expects revenues of between $2.03 billion and $2.07 billion in the first quarter of 2024, reflecting growth of 12% to 14%, therefore slowing compared to the last two quarters. . Especially since this period will benefit from a positive calendar, linked to the Easter holidays, which adds between one and two points of growth and will be to the detriment of the second quarter.
Growth in overnight bookings should “moderate” in the first quarter and the average nightly rate should be stable or slightly increasing, Airbnb also indicates.
Bloomberg believes that the decline in shares on Wall Street can be explained by the fact that the group suggests that demand is likely to be less robust than at the end of 2023. The group’s financial director, Dave Stephenson, said put forward the demanding basis of comparison. The first quarter of 2023 benefited from the relaxation of “pent-up demand”, i.e. unsatisfied travel demand due to health conditions (at the time of the emergence of Covid), he told analysts. “We see stable demand at the start of the year,” he assured.
In addition, Airbnb announced that its board of directors had approved a share repurchase program of up to $6 billion.
Unsurprisingly, the platform also said a word about the next Olympic and Paralympic Games in Paris, declaring that it had noted an increase in both the supply of housing and demand.
“Current orders for overnight stays in Paris during the summer are more than twice what they were a year ago,” underlines the company.
Julien Marion – ©2024 BFM Bourse