Short-term rental company Airbnb reported its most profitable fourth quarter ever and $55 million in net income to close out the year, telling investors that remote work continued to aid the company’s massive growth.
The growth was driven in part by higher average daily rates for staying at host sites, pent-up demand from people looking to travel despite the pandemic and increased flexibility to live and work anywhere, the company said.
“Nearly two years into the pandemic, it’s now clear that we are undergoing the biggest change to travel since the advent of commercial flying,” the company said in a statement to investors. “Remote work has untethered many people from the need to be in an office every day. As a result, people are spreading out to thousands of towns and cities, staying for weeks, months, or even entire seasons at a time. For the first time ever, millions of people can now live anywhere.”
The company generated $1.5 billion in total revenue, which it said was 38 percent higher than the last quarter, before the pandemic temporarily disrupted travel and impacted earnings.
That capped off a year that saw $6 billion in total revenue, $1.6 billion in adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) and $47 billion gross booking value, which the company said was a result of rapid changes to the travel industry.
To highlight that newfound flexibility, Airbnb CEO Brian Chesky told investors on Tuesday he was talking to them from a rented home in Miami, and that he plans to continue living and working on the road in 2022 to highlight what he said was a growing number of people “living on Airbnb” and the platform’s increase in extended stays.
“We’re in the midst of a revolution in travel because people have new-found flexibility in how they live and work,” Chesky said.
The company also said it made improvements in four areas of the business Chesky said led to the growth in 2021.
Chesky said the company focused on making it easier to become a host, including providing insurance to cover damages and liability.
“People were nervous about their home being damaged when they rent it out to guests,” Chesky said, adding it was one of the top obstacles for people otherwise interested in becoming Airbnb hosts.
He also said they focused on recruiting new hosts, including studying other reasons people hesitate to offer their homes on the platform.
The company is the second this month to report that travelers appear to be growing used to living and traveling despite new coronavirus variants and case surges. The Expedia Group shared a similar finding last week, when it also reported strong revenue in the quarter.
Both companies said they anticipate growth in urban and international travel this year compared to 2021 as travel restrictions and fear of the pandemic continue to ease.
But Airbnb doesn’t anticipate the supply of homes to impact its business because of its fourth area of focus in 2021: the ability to steer guests to new cities or dates based on availability.
“We can point demand to where we have supply,” Chesky said. “We are not supply-constrained globally on any night of the year.”
Fourth quarter revenue was 80 percent higher than in the same quarter a year before.
Revenue for the company reached an all-time high in the third quarter, surpassing pre-pandemic levels. The company generated $834 million in net income that quarter, an increase of 280 percent year over year and $2.2 billion in revenue, which was up 67 percent year over year.
Airbnb stock jumped during after-hours trading after the news was released.