Airbnb reported a profit of $55 million for its fourth quarter. This is a significant turnaround from a loss of over $18 million a year ago. Its revenue rose above pre-pandemic levels.
According to the San Francisco-based short term-stay company, bookings increased in rural and small towns, as well as in urban areas that were hardest hit by the pandemic.
Hosts of Airbnb were also able raise their prices. In late 2021, the average daily rate was $154, which is a 20% increase over a year ago and 36% more than the same quarter of 2019. According to the company, there is strong demand for rental properties in North America. Customers are increasingly booking whole homes and vacation spots that have higher prices.
Due to strong travel demand, the company forecast that prices and bookings will increase in the first quarter. These trends, according to the company, will increase first-quarter revenue by between $1.41 billion & $1.48 billion. This is well above the $1.23 trillion forecasted in a FactSet survey.
Airbnb shares rose 6.6% to close at $180.07 during regular trading. They gained nearly 4% after the closing bell.
Airbnb claimed that the omicron version of COVID-19 had less impact on cancellations and bookings than the delta variant last year. Although virus cases remain high in the United States of America, Airbnb from San Francisco said that summer bookings made before January 31 were 25% more than the same period in 2019.
On a conference call, Brian Chesky, CEO of the company, stated that he was confident in cross-border travel and that bookings in cities would pick up. His long-standing theme was that the pandemic had allowed some people to work remotely, which has led to an increase of long-term bookings.
The December-related rise in COVID-19 cases, which began with the rise in omicron, caused a lot of damage to airlines and other travel-related businesses. U.S. air travel was less than 20% in January.
However, executives in the travel industry say that business will rebound once omicron disappears.
Expedia CEO and Chairman Peter Kern stated last week that the omicron wave was less severe than the coronavirus waves before it. He also predicted a “solid overall recovery” in 2022, excluding any changes in the trajectory of this virus.
Airbnb has been able to benefit from the closing of its offices as many white-collar workers choose to rent out their homes. A growing number of Airbnb bookings are long-term — at least 28 days.
Similarweb, an internet traffic tracker, reported last week that Airbnb gets more traffic and conversions (visitors who make a purchase) than other competitors like Vrbo. According to the firm, late 2021’s drop in traffic was seasonal and that customers tending to stay longer and see more pages could indicate growing brand loyalty for Airbnb.
Airbnb’s fourth quarter was its second consecutive profitable quarter. This compares to a loss in late 2020 of $3.9 billion.
Earnings were 8 cents per share. Revenue rose 78% compared to a year ago, and 38% compared to the same quarter of 2019, reaching $1.53 billion.
According to a FactSet survey, analysts expected the company would earn 4 cents per share for revenue of $1.46 trillion.
Airbnb lost $352 million in 2021, compared to a loss of $4.58 trillion in 2020.