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What’s going on?
Airbnb had investors walking on air with an impressive results update earlier this week.
What does this mean?
You’d think high-flying airline prices and widespread economic turmoil would have folk steering clear of travel right now – but based on Airbnb’s results, it seems the mounting stress just drove people to vacation. After all, cross-border trips surged 49% last quarter, with China’s loosening Covid restrictions making travel from the Asia-Pacific region the real grower. And some pandemic trends even went into reverse, with people ditching longer, quieter trips in favor of shorter stays in bustling cities – historically Airbnb’s real wheelhouse. In fact, city breaks accounted for half of all bookings last quarter, the first time that’s happened since the pandemic hit. Altogether then, Airbnb overshot revenue and profit expectations last quarter, helping make 2022 the firm’s first full year of profitability. And it doesn’t look like that’s about to change: with demand resilient so far this year, and travelers increasingly booking ahead, the firm gave an upbeat outlook that got investors bumping shares up 12%.
Why should I care?
The bigger picture: Savvy strategy.
Cash-strapped households will take an extra buck wherever they can find it, which could be one reason there are so many pads available on Airbnb right now. The company had 6.6 million active listings at the end of 2022 – its highest figure ever, beating the year before by over a million. And now that travel’s reviving, Airbnb is planning to invest in products beyond its main accommodation services again – giving renewed attention to offerings like “experiences”, including guided local excursions for travelers.
Zooming out: Doing, not possessing.
Airbnb’s move could turn out to be very canny indeed, especially if Tripadvisor’s results are anything to go by. The travel firm said that consumers have kept shifting their spending away from goods and toward activities – which gave tour bookings a welcome boost, and helped Tripadvisor speed past revenue expectations last quarter.
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Originally Posted February 15, 2023 – Airborne Airbnb
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