What Airbnb’s Summer Boost reveals about Covid-19 recovery

Few technology companies were hit harder by the pandemic than Airbnb. In the spring of 2020, a slew of trip cancellations caused the company’s revenue to plummet from 67 percent. In May he had punish a quarter of its employees. “The journey we knew is over,” CEO Brian Chesky said grimly at the time, “and it will never come back.”

The fate of the company, like so many others, was tied to the world’s ability to deal with Covid-19. His fortune could be seen as an indicator of a pandemic, a measure of progress toward “normal” activities like vacations. In that sense, there is good news: In a earnings call on Thursday, Airbnb said its revenue was up 300% from Q2 2020 and about 10% more than in Q2. 2019. Overall bookings had also returned to pre-pandemic levels, even with restrictions on international travel. The wave of summer travel led to other highlights: The company had the most nights booked of any quarter in its history, and Saturday marked the best night on Airbnb since the start of the pandemic, with more than 4 million customers staying in Airbnbs around the world.

“After months of home confinement, millions of people are yearning to travel,” said Chesky, who was calling from an Airbnb in Italy. “Now we can say with certainty that the travel rebound is upon us. “

Summer may have boosted travel to pre-pandemic levels, but the fall is less certain, with contagious diseases on the rise delta variant. In a letter to shareholders, Airbnb expressed expectations that the delta variant would affect bookings and cancellations, making the second half “more volatile and non-linear.” Despite this, the company predicted that the third quarter would bring its “highest quarterly income on record.”

Part of Airbnb’s bet is that while travel may not look like it was in 2019, people will still find ways to do it. International travel fell in 2020, but people still booked weekend trips to places within driving distance. Before the pandemic, the majority of people went to a travel website like Airbnb with a fixed location and dates. Now, perhaps because so many people can work remotely, Airbnb says 40% of its customers use the flexible location and date search when booking accommodation. People are also booking longer stays. In its first quarter results, Airbnb said that a quarter of its bookings came from stays of one month (in 2019, stays of this duration represented only 14% of bookings). This trend continued throughout the summer and is likely to remain to some extent as long as people can work remotely.

These changes in behavior and a summer of near-normal travel have boosted other businesses in the industry. Turo, the “Airbnb for Cars,” filed its public record last week. Vacasa, a seasonal rental management platform, also intends to go public via SPAC. Venture capital funding for travel and tourism startups has also picked up, after an all-time low in the pandemic year. In 2019, investors spent $ 11.1 billion on 1,125 deals in the industry, according to data from Crunchbase. In 2020, that figure fell to $ 4.8 billion and 629 transactions. Things appear to be bouncing back in 2021, which has already seen 346 deals and $ 6.1 billion in funding.

It is not known how long the rebound of the trip will last. The rosy outlook could be clouded by coronavirus variants, which continue to spread and have inspired further restrictions in some areas. During the earnings call, Airbnb CFO Dave Stephenson warned there would likely be fewer bookings in the third quarter than in the second quarter. Summer travel is still decreasing at this time of year, but the increase in coronavirus cases has also altered some people’s travel plans. Already, companies like Southwest Airlines look back on the more optimistic forecast for early summer.

In its letter to shareholders, Airbnb noted that “advances in vaccination, containment of new variants and travel restrictions” could all affect the company’s results in the coming months. But if the company learned one thing from last year, it was to become more efficient: This quarter, it reduced its losses to $ 68 million, from $ 576 million last year. These lessons could come in handy if there is an even more difficult road to travel.

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