Airbnb is raking the dough. The company today reported a record fourth quarter, beating its previous benchmark in both revenue and net profit.
Airbnb’s fourth-quarter revenue grew 24% year-over-year to $1.9 billion, the company said, driven by an increase in stays and experiences, curated tour selection and Airbnb events. Booked nights and experiences increased 20% in the fourth quarter of 2022 compared to a year ago, the company said, as customers stayed longer at venues. Gross room nights booked in Q4 2022 for more than one week – a profitable customer segment – were 40% higher than in Q4 2019.
Another boost to Airbnb’s bottom line was undoubtedly the company’s decision to stop offering refunds related to COVID-19. Host perks likely helped as well, along with growth-focused features like a toggle that shows the price of stays including fees. (While Airbnb said the impact of more transparent pricing was neutral last year, it expects an increase in the future as guest prices compare to hotel prices.)
Somewhat surprisingly, the decision to remove listings in mainland China in July was not a factor when it came to revenue, as Airbnb says. On the earnings call this afternoon, Chesky said Airbnb remains focused on overseas business from China, which it sees as a big (albeit slow-growing) opportunity.
“We think there will be hundreds of millions of people who want to leave China to travel the world,” Chesky said. “We think this will be the best way for people who are mostly Gen Z [based in China] traveling – I think they really want to have an authentic experience while traveling the world.
On the net income side, Airbnb raked in $319 million in the fourth quarter of 2022, compared to $264 million in the fourth quarter of 2021, which it attributes to revenue growth and “spending discipline.” It’s unclear to what extent Airbnb’s adoption of an all-remote workplace might have played a role; Airbnb’s workforce is down 5% from 2019.
For the full year of 2022, Airbnb generated $1.9 billion in net income – its first full profitable year. That’s quite a turnaround from 2021, when the company lost $352 million.
In 2023, Airbnb says it is seeing “strong demand” and plans to focus on raising awareness about accommodations, improving community support, and creating new products and services. Telegraphing an investment area, Airbnb recently launched a tool that helps renters find an apartment so they can Airbnb it.
On the earnings call, Chesky thought AI had a growing role to play in boosting Airbnb’s business.
“I’m really excited about the possibility of AI. I think Airbnb will uniquely benefit from this,” Chesky said. “The reason for this is that Airbnb is a very difficult product challenge, i.e., unlike hotels, we don’t have SKUs – there’s no representative inventory… Customers left over 100 million reviews last year. And just analyzing all those reviews is very laborious. I think AI is going to really benefit our long tail of data and the fact that our research problem is not really a research problem, it is a [customer-inventory] correspondence problem.
Airbnb’s stock is up around 5% at press time.
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