Airbnb slips after forecasting decline in bookings

Shares fall 5% on Delta variant warning

Airbnb Inc. shares fell more than five per cent in extended trading after the company forecast a decline in quarterly bookings compared with pre-pandemic levels, citing the spread of the Delta variant of COVID-19.

The home-rental company in a statement Thursday that the number of nights and experiences booked in the third quarter will fall short of the total during the same period in 2019. The disclosure amplified fears from investors that the latest outbreak will weigh heavily on the travel industry.

Booking Holdings Inc. and Expedia Group Inc. issued similar warnings about the impact of the Delta variant during their financial reports this month.

All three reported otherwise outstanding quarters. Airbnb blitzed past expectations for second-quarter bookings and reported a surprisingly positive revenue outlook for the current period, indicating that the expected decline in total bookings won’t hamper sales.

The San Francisco-based company reported a second-quarter gross bookings value of US$13.4 billion, a 37-per-cent increase from pre-pandemic levels in 2019. Analysts had predicted US$11.2 billion on average, according to data compiled by Bloomberg.

Quarterly revenue came in at US$1.34 billion for the three months that ended in June, a 10-per-cent gain from the same period in 2019.

“The travel rebound is upon us, and Airbnb is leading the way,” the company, which went public in December, wrote in a letter to shareholders that was published alongside the results Thursday. “In the last few weeks, we had our biggest night ever in the U.S. and our biggest night globally since the pandemic began, with more than 4 million guests staying at an Airbnb listing.”

While Airbnb has benefited from a U.S. domestic travel boom linked to rising vaccination rates and easing restrictions, international sales remain stifled, and the Delta variant has raised further doubts for the future. “We anticipate that the impact of COVID-19 and the introduction and spread of new variants of the virus, including the Delta variant, will continue to affect overall travel behaviour,” the company said. However, it added a positive outlook for the current period, predicting the “strongest quarterly revenue on record.”

The travel industry has been gutted by the coronavirus pandemic, which caused most of the world’s tourism hotspots to shut down last year. Airbnb fared better than rivals due to the remote work movement, where city dwellers abandoned their apartments for extended stays in rental homes near beach towns and mountain villages. The home-rental company saw bookings plunge 80 per cent last March, but they quickly bounced back by the summer.

Short-term rentals were the fastest-growing part of the online travel industry even before COVID-19. Over the past 18 months, they’ve largely kept the sector afloat. Almost 30 cents of every dollar spent in hospitality today is going toward short-term rentals, according to an analysis of data compiled by researchers AIRDNA and STR Inc.