Airbnb, the popular short-term rental company, has announced its forecast for strong first-quarter revenue, surpassing Wall Street estimates. The company anticipates a boost in revenue from cross-border travel and longer-duration bookings. With international travel demand expected to remain robust this year, Airbnb is poised to benefit from the increasing global air connectivity and the growing popularity of Asian and Latin American destinations. Meanwhile, domestic travel demand in North America is projected to plateau.
Based in San Francisco, Airbnb generates a significant portion of its revenue from outside the United States. The company expects its first-quarter revenue to range between $2.03 billion and $2.07 billion, surpassing the average estimate of $2.03 billion by LSEG (London Stock Exchange Group). Following this announcement, Airbnb’s shares experienced a 9% surge in after-market trading.
While the growth rate of nights booked in the first quarter is expected to moderate compared to the previous quarter of 2023, Airbnb witnessed a remarkable increase in bookings during the fourth quarter of last year. Travelers booked a total of 98.8 million nights and experiences, marking a 12% increase compared to the same period in the previous year. The strongest growth was observed in the Asia Pacific and Latin American regions, with China experiencing an impressive 90% year-over-year increase in nights booked.
In terms of revenue, Airbnb exceeded its initial forecast range for the fourth quarter of 2023. The company reported a revenue of $2.20 billion, surpassing the projected range of $2.13 billion to $2.17 billion. Additionally, average daily rates rose by 3%, indicating a slight increase in the cost per night. Notably, there was a significant surge in nights booked for long-duration trips, with a remarkable 20% jump.
However, despite these positive figures, Airbnb faced a quarterly net loss of $349 million. This loss can be attributed to outstanding income tax obligations in Italy, which impacted the company’s earnings. In December, Airbnb announced its agreement to pay $621 million to the Italian Revenue Agency for the tax years spanning from 2017 to 2021. The company also cautioned that the amounts to be paid for 2022 and 2023 could potentially be substantial.
In conclusion, Airbnb’s forecast for strong first-quarter revenue reflects its confidence in the growing demand for cross-border travel and longer-duration bookings. With international travel on the rise and a focus on Asian and Latin American destinations, the company is well-positioned to capitalize on these trends. Despite the quarterly net loss resulting from tax obligations in Italy, Airbnb remains optimistic about its future prospects in the global travel market.
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