This Could Be the Boost Airbnb Needs

After a tough winter marked by real-life horror stories and sinking consumer sentiment, we are finally seeing some signs of life out of Airbnb (ABNB).

Though the rental company continues to trail traditional lodging peers in Consumer Happiness and web traffic growth, its own metrics are showing signs of improvement as consumers plan summer travel and report on Spring Break activities.

Mentions of consumers booking with Airbnb have ramped from +5% year over year to +17% year over year on a 90-day to 30-day moving average. (A quarter ago, mentions were down -6% YoY).

Web visits have also improved from -4% year over year to flat in the same time frame. (A quarter ago, traffic was registering -8% YoY).

Perceived high pricing, added cleaning and service fees, and a list of chores to do on your way out have suppressed ABNB’s Consumer Happiness levels below more consumer-friendly peers.

The company is also working through new regulations, most recently in Michigan but historically present in wide swaths of the country, from our own Louisville, Kentucky, to New York City and even the EU.

Last quarter, ABNB posted a wider-than-expected loss attributed to lodging tax reserves and nonrecurring tax withholding expenses of $1 billion. Conversely, it reported 98.8 million nights and experiences booked, up 12% from the year prior and slightly exceeding expectations.

Much of this growth is being driven by significant international expansion that may not show up in our English-speaking social data. Areas of hot interest include the Asia-Pacific and Latin America regions.

Brace Yourselves

Looking ahead, we expect continued international growth and expansion – and are watching for an intriguing announcement from the company, tucked away in its last shareholder letter:

“We also believe that now is the time for us to expand beyond our core business and reinvent Airbnb. While this will be a gradual, multi-year journey, we’re excited to share more about this later in 2024.”

Interesting.

Investors should brace for potential news next quarter related to this hinted-at announcement, as well as a year-over-year boost from the early timing of Easter.

ABNB shares have pulled back a bit from March highs but remain nearly 40% higher year over year.

Recent consumer momentum (thanks in part to early holiday travel) may have given the company what it needed to clear expectations for Q1.

We’ll be watching to see if this momentum sustains in the next few weeks ahead of its next earnings report, which is expected sometime in mid-May.

In the meantime, another sector of the travel industry is seeing a shakeup as consumer airline loyalty shifts… See who’s ruling the skies now.

Until next time,

Andy Swan
Founder, LikeFolio

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