Airbnb shares soar as first annual profit is another sign of travel rebound

CNN

By Chris Isidore, CNN

Airbnb shares posted their biggest one-day gain in trading Wednesday after the home rental service posted its first annual profit and forecast a sunny travel outlook in 2023 and an uptick in listings.

The company reported it earned $1.9 billion in 2022, compared to a $352 million loss a year earlier. The fact that it did report a profit wasn’t the surprise, but the result was better than expected. Fourth quarter earnings of $319 million were far higher than the $184 million forecast by analysts surveyed by Refinitiv.

But it was the forecast from the company about the strength of the travel market that was a major factor driving shares higher. The company said it expects first quarter revenue of between $1.75 billion and $1.82 billion, up from $1.5 billion in the year prior.

Shares of Airbnb ended the day up 13.4% on Wednesday, its biggest one-day increase since the company went public in December 2020.

“We are excited to see the continued strong demand in the first quarter 2023,” the company said in its letter to shareholders. “We’re particularly encouraged by European guests booking their summer travel earlier this year, the market share gains we are seeing in Latin America, as well as the continued recovery within Asia Pacific.”

Airbnb is one of the companies benefiting from the pent-up demand for travel. US airlines just reported a return to profitability last year following two years of deep losses due to the pandemic. The International Air Transport Association forecasts that the global airline industry will return to profitability this year.

But significantly higher costs for things like airline tickets, hotels and rental cars has travelers seeking savings as they make travel plans. That can create more demand for products like Airbnb, in which people offer their homes, or sometimes rooms in their homes, for rent.

The higher prices faced by consumers is also prompting more people to look to earn extra money through renting space they might not have rented before, said CEO Brian Chesky.

“The supplemental income that they can earn [via] an Airbnb … is often critical during tough times,” he said about the increased listings the site is seeing.

The-CNN-Wire
™ & © 2023 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.