Airbnb beat revenue and profit estimates in the fourth quarter, benefiting from remote work policies and vacation demand that boosted short-term rental bookings despite travel disruptions caused by Omicron. Shares jumped in extended trading.
Revenue rose 78% to $1.53 billion ($2.1 billion) in the fourth quarter, Airbnb said in a statement Tuesday. The San Francisco-based company reported net profit of $55 million compared to a loss of $3.9 billion a year earlier and marking a record for the period. Earnings per share were 8 cents US, versus an estimate of 3 cents US.
“The reason we’ve been able to respond to this changing world of travel is that our model is inherently adaptable,” Airbnb said in a letter to shareholders. “We have millions of Airbnb hosts offering nearly every type of home in nearly every community around the world.”
Airbnb has recovered from the onset of the pandemic, when the company cut thousands of jobs and considered delaying its initial public offering as travel around the world halted. After the initial shock, business boomed as workers no longer had to be in traditional offices five days a week and could work from anywhere. “As a result,” Airbnb said, “people are spreading to thousands of towns and cities, staying for weeks, months, or even entire seasons at a time.”
Nearly half of the number of nights booked in the fourth quarter were for stays of a week or more, and one in five nights were for stays of a month or more.
At the start of the pandemic, many people were looking for homes in more rural areas within driving distance of major cities, although Airbnb said customers were now starting to return to cities. In the fourth quarter, gross room nights booked in urban destinations accelerated from the previous quarter and nearly recovered to 2019 levels for the same period.
Airbnb remained resilient even when the Omicron variant of COVID-19 emerged late last year, once again shutting down businesses and disrupting flights and vacation plans over the Christmas season. The company said it saw less impact on reservations and cancellations with Omicron than with the Delta variant. Rival Expedia Group, which offers hotel and alternative accommodation bookings through its Vrbo platform, also weathered the COVID resurgence, seeing revenue more than double in the fourth quarter.
Airbnb said it was “encouraged” by what it has seen so far this year. “Omicron’s impact has quickly dissipated and customers are booking with confidence for the summer travel season earlier this year,” the company said. Airbnb now expects the number of nights and experiences booked in the first quarter to “significantly exceed” the levels of the first quarter of 2019.