Airbnb’s tepid bookings target disappoints investors; shares slide
Airbnb logo is seen displayed in this illustration. File photo/ REUTERS/Dado Ruvic/Illustration
Vacation rental Airbnb Inc on Tuesday forecast bookings for the current quarter at par with the record-breaking previous one, disappointing investors who had expected far more amid booming summer demand from pandemic-weary travelers.
Booking rates slowed in May and June from April, which was the biggest contributor to the bumper second quarter as travelers across Europe and North America made early reservations to visit their favorite tourist spots both domestic and international.
Flight disruptions, especially in the United States, posed a challenge towards the end of the quarter, Airbnb Chief Financial Officer Dave Stephenson told analysts on a call.
Major U.S. carriers, battling with operational challenges and staff shortages, had canceled thousands of flights over the four-day Memorial Day weekend that marks the traditional start of the busy summer travel season.
Airbnb also announced a $2-billion share buyback, its first since going public, but that did little to arrest an 8-percent slide in its shares. The stock has lost about 30 percent this year in tandem with a downturn in global markets driven by growing recession risks.
Still, the company is yet to show signs of strain from rising inflation as consumers shrug off decades-high prices of food and other essentials in favor of their pent-up desire to travel.
Average daily rates for Airbnb were up 1 percent to $164 in the quarter as the strong demand encouraged hosts to charge more.
The rental firm, which tweaked its service in May to facilitate longer rentals, saw long-term stays increase nearly 25 percent from a year ago and by almost 90 percent from the second quarter of 2019.
San Francisco-based Airbnb expects current-quarter revenue between $2.78 billion and $2.88 billion, higher than analysts’ estimates of $2.77 billion, according to Refinitiv IBES.
It reported a net profit of 56 cents per share, ahead of estimates of 43 cents.
