Airbnb profit jumped 70% in 2Q

The login page for Airbnb’s iPhone app is displayed on a computer displaying Airbnb’s website, May 8, 2021, in Washington.  (AP Photo/Patrick Semansky, File)

Airbnb said Thursday its second-quarter profit surged more than 70 percent over last summer to $650 million, as revenue rose on strong bookings for summer-vacation rentals.

The San Francisco company said bookings grew 11 percent over the same period last year. Still, they were a bit lighter than analysts expected.

The shares fell about 1 percent after three hours of late trading.

Airbnb has been battling complaints that high cleaning fees have pushed prices closer to, or even above, hotels for short rentals. It changed its site to display cleaning fees upfront, when consumers are price-shopping.

Prices, however, remain stubbornly high. Airbnb had forecast that average rates customers pay per night would fall slightly in the second quarter compared with last year. Instead, the average nightly rate rose 1 percent to $166.

CEO Brian Chesky said on a call with analysts that the price customers book is lower than list prices on average.

“So we do see people gravitating toward more affordable stays,” Chesky said. He said some of the modest increase over last year’s average rate is due to people booking bigger homes.

Chesky argued that hotels are raising prices faster, but Airbnb is trying to nudge many hosts to drop their rates.

“Most hosts are not booked most nights,” he said. “If they lower the price just a little bit, they will add more bookings, more nights, and they’ll end up making more money.”

The company said new tools that make it easier for hosts to compare prices they charge to the nearby competition “had a moderating effect” on rates in the second quarter. However, it expects third-quarter average prices to be higher than a year ago, partly because of a shift to higher-priced listings.

The rental giant has recently increased its effort to offer more single rooms inside homes and apartments as a low-cost option, particularly for younger travelers.

And it is fighting back against cities that seek to limit or more tightly regulate short-term rentals.

Airbnb said Thursday its second-quarter profit rose from $379 million in the same period last year, when the company took $89 million in restructuring charges. Adjusted to exclude special items, Airbnb said it earned 98 cents per share.

Revenue increased 18 percent to $2.48 billion.

Analysts were expecting earnings of 80 cents per share on $2.42 billion in revenue, according to a FactSet survey.

Bookings rose to 115.1 million in the quarter, up from 103.7 million a year earlier and more than one-third higher than in 2019, before the COVID-19 pandemic. But analysts expected 117.6 million.

Airbnb predicted that third-quarter revenue will be $3.3 billion to $3.4 billion. Analysts were expecting $3.23 billion.

The company said it added a record number of new listings in the quarter, pushing its total over 7 million.