On Thursday, Airbnb gave a third-quarter revenue prediction that was higher than market expectations, but industry concerns about a slowing domestic market caused Airbnb’s shares to decline 1.2% in after-hours trade.
According to data from Refinitiv, the San Francisco-based business projected quarterly
revenue between $3.3 billion and $3.4 billion, exceeding the average estimate of $3.22 billion from analysts.
Although businesses with major U.S. exposure are losing domestic revenue as more people choose to travel overseas, the company expects to benefit from a recovery in urban and international tourism.
Airbnb, which derives the majority of its income from outside the United States, reported that international bookings increased 16% year over year in the second quarter and that more travellers were visiting cities, as seen by an increase of 13% in the number of urban nights booked.
The company noted that one of its historically stronger business sectors showed evidence of passengers returning to cities.
However, despite the company’s claims that it was trying to reduce price increases for consumers, its average daily rate (ADR) increased globally by barely 1% to $166. In North America, daily rates fell 1%.
As travel restrictions loosen and a high currency encourages Americans to buy flights and accommodations abroad, analysts claim that demand for local hotels in the United States has been stagnant.
However, the widely used short-term rental website Airbnb said that from the first to the second quarters in North America, the total number of nights booked increased more quickly.
Speaking on a conference call with investors, Airbnb CFO David Stephenson said, “I think that was telling, just the strength and resiliency of the North American consumer and we’re continuing to see that strength lead into Q3.”
In the second quarter, Airbnb’s revenue increased 18.1% to $2.48 billion, exceeding analyst expectations of $2.42 billion.
According to forecasts, gross bookings increased 13% to $19.1 billion. A profit of 98 cents per share was recorded by the short-term rental company, beating predictions of 78 cents.
Following an increase in yearly prediction as a result of increased demand for foreign travel to Europe, online travel service Booking Holdings saw its shares rise 10.25% in extended sessions.
