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Airbnb’s net profit soared 72 percent year over year in the second quarter of 2023 as the short-term rental platform recruited more hosts to meet higher demand, according to its earnings report released Thursday.
The San Francisco-based category leader collected $2.48 billion in revenue, up 18 percent from a year earlier. Travelers spent a total of $19.1 billion booking rentals and activities (which Airbnb calls Experiences) during the quarter.
Guests booked 115.1 million nights on the platform, up 11 percent from a year earlier and 37 percent higher than the second quarter of 2019. More than 7 million total active listings were on the platform in the quarter.
CEO Brian Chesky told investors on Thursday the company would continue trying to increase the supply of listings at all price points, keeping the price of booking in check and grabbing more market share from the hotel industry.
“We know that while our prices in North America like for like are down 4 percent,” Chesky said, “hotels are at least 4 percent higher, and some estimates are they might even be approaching double digits higher.
“If we live in a world where Airbnb prices do not go up…and hotels continue to rise, then Airbnb continues to become more affordable relative to hotels,” he added.
Airbnb, by far the largest short-term rental platform, has benefited from ongoing demand for travel. It notched its first profitable year in 2022, pulling in $1.9 billion over those 12 months.
But hosts whose homes fuel the platform also benefited, including in the second quarter.
Quarterly earnings for hosts have nearly doubled since 2019, with the total revenue from nights booked reaching $19.1 billion thanks to consistently higher demand and prices that rose throughout the coronavirus pandemic.
It now costs an average of $166 to book a night on the platform, Airbnb said. That’s up 46 percent from the second quarter of 2020 during the onset of the pandemic, according to data from past earnings reports.
Airbnb’s jump in profitability came from keeping expenses low and earning more income from interest, in addition to the rise in demand and nights booked, the company said.
The company has been focused on increasing supply, which includes making it easier for new hosts to join. Airbnb also began partnering with the owners of apartment buildings in major cities, allowing renters to sublet their units on the platform.
Supply growth outpaced demand as the company saw its number of active listings grow 19 percent compared to a year earlier, while the number of nights booked grew 11 percent during the same time frame.
Airbnb’s lead in the short-term rental space continued to grow above rival Vrbo, which reported a drop in nights booked during the quarter despite a rise in hotel bookings for its parent company Expedia.
Vrbo officials also said they expect bookings to continue through the year, with a drop in bookings in the next quarter.
Airbnb, meanwhile, told investors it expects its revenue to grow again next quarter to between $3.3 billion and $3.4 billion. That would represent revenue growth of between 14 percent and 18 percent, the company said.
Chesky also vowed to continue fighting the hotel industry, saying the cost of booking hotels is going up at a time when Airbnb is bringing nightly prices down.
“The hotel industry is more about 10 times the size of Airbnb,” Chesky said. “Almost anyone that stays in a hotel could consider staying in an Airbnb, but we need to make sure that we continue to drive value.”
Airbnb has been hinting that it would expand beyond its core service of opening homes to travelers worldwide, and part of that could come from allowing hosts to pay for better placement of their listings.
“Advertising on the platform is a common request,” Chesky said. “It is absolutely on the table.”
The company is focusing on its Experiences offering, which includes travelers pairing up with people for activities, such as hiking, surfing and more.
Experiences took a back seat to the company’s core business during the pandemic, Chesky said. But with across-the-board growth in core metrics, Airbnb is exploring other ways it can expand its value.