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Airbnb continued its domination of the short-term rental market in the second quarter, when it saw its total earnings grow by 11 percent to $2.75 billion on ongoing strong travel demand and international expansion, according to its second-quarter earnings report.
The company reported a net income of $555 million during the quarter that ended June 30. That was actually a 15 percent decline compared to a year earlier, driven by an income tax increase, the company told investors during a call on Tuesday.
The company generated a total of $21.2 billion for itself and the hosts that supply its platform with places to stay, an 11 percent increase from a year earlier. In total, travelers booked 125.1 million nights and activities on the platform.
“We’re looking forward to another record summer travel season,” CEO Brian Chesky told investors during the call.
The company shared some warning signs that may have to do with the recent jitters in the national economy. It said travelers are waiting longer to book their trips than in recent years, a possible sign of a lack of confidence in the national economy.
“It’s not that consumers are not necessarily going to book that trip for Thanksgiving or Christmas; it’s just that they haven’t booked yet,” Chief Financial Officer Ellie Mertz said.
Airbnb executives said they expected to see a “moderation” of nights booked in the third quarter compared to the second.
That outlook spooked investors, and Airbnb stock fell over 13 percent during after-market trading on Tuesday.
Chesky tried to calm investors’ nerves during a call after markets closed. He said the company had become highly profitable while primarily offering one product and penetrating five countries well. He compared the company’s performance to Apple and Amazon when those companies focused on single products (computers and books). Just like those modern behemoths, Chesky said, Airbnb is primed to diversify its offerings in the long term.
Chesky called Airbnb “one of the most profitable organizations in tech.”
Some of that growth came from the company’s ongoing focus on expansion both within the U.S. and abroad. It was also buoyed by a 4 percent increase in average daily rates (ADRs), or the price of a booking on Airbnb, for North America. Average daily rates are now $170.
There aren’t signs that travelers are looking to book cheaper listings, executives said.
With restrictions from the pandemic in the rearview mirror, Airbnb has sought to expand its staff and its platform offerings in underserved markets internationally.
Bookings increased by 17 percent in Latin America during the quarter and 19 percent in Asia.
Chesky said that while Airbnb has a presence in 220 countries, it had only penetrated five countries — the U.S., the United Kingdom, France, Canada and Australia — and that it was focused on expanding into more markets.
The company said it benefitted from major sports events overseas, as well. Over 400,000 guests are staying in Airbnbs in the Paris region during the Olympics, for example, though the full scope of those numbers won’t be seen until next quarter’s results are released.
The company is pushing for more users to download and use its app, and it reported a 25 percent increase in app downloads globally in the quarter. Over half of all nights booked in the quarter were made on the app.
That was driven in part by the company’s release of its Icons category in May, a new group of venues that include things like a replica of the house from the animated Pixar film Up. Users were required to download the app to apply for a free stay in one of the company’s new Icon listings.
