Airbnb sees strong demand as US travel fuels bookings beat
AIRBNB issued a better-than-expected outlook for the holiday quarter, citing strong demand as US travelers used its recently launched “reserve now, pay later” feature to book trips in advance.
Revenue for the three months ending Dec 31 will be US$2.66 billion to US$2.72 billion, the company said in a shareholder letter on Thursday (Nov 6), exceeding the Bloomberg-compiled analyst average estimate of US$2.67 billion.
The key metric of nights and seats booked is expected to increase in the “mid-single digit range” from a year earlier, in line with analysts’ estimates as well as Airbnb’s prior warning about challenging comparisons with 2024.
“In October, we continued to see strong demand despite more difficult year-over-year comparisons,” Airbnb said in the letter.
American travellers are using its “Reserve Now, Pay Later” feature launched in August for US rentals to book trips earlier, it added, supporting its “positive outlook for the rest of the year.”
Shares of Airbnb rose 5.5 per cent in extended trading after closing at US$120.53. The stock has been down 8.3 per cent so far this year.
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Airbnb’s report echoes a rosy forecast provided by online travel peer Booking Holdings, which cited resilient demand across all regions. And on Thursday, Expedia Group raised its full-year gross bookings and revenue outlook, and posted third-quarter results that broadly beat expectations.
Even so, planned cuts to US flight capacity amid the government shutdown may portend some travel disruptions during the upcoming holiday season.
In the third quarter, Airbnb saw a pickup in reservations growth thanks to North American travellers, who contributed about 30 per cent of total nights booked, according to the company.
It observed strong domestic travel and trips with longer lead times due in part to the deferred payment feature. All of this may offer some assurance to investors as concerns remain about the overall health of the US consumer.
The “reserve now, pay later” option could lead to some cancellations closer to the date of stay, which may or may not occur in the same quarter, Airbnb said. But it expects “a net benefit to overall bookings” based on its prior testing, and plans to continue rolling it out more broadly to more customers in the coming months.
Still, reservations in Airbnb’s new international markets drove most of its gains. First-time bookers increased more than 20 per cent in Japan and nearly 50 per cent in India from a year ago, the company said, adding that overall nights booked would have grown double-digits had North America not weighed on the total.
In the third quarter, total nights and seats booked exceeded expectations, increasing 8.8 per cent to 133.6 million. Revenue was US$4.1 billion, ahead of estimates. Adjusted earnings before interest, taxes, deprecation and amortisation for the period came to US$2.1 billion, also beating Wall Street’s projections.
The company didn’t break out results for Experiences and an a la carte Services category that it launched in May, but said the products are attracting new users to the platform. Almost half of Experiences bookings weren’t attached to an Airbnb accommodations reservation, the company added.
The strong results overshadowed a miss in the company’s third-quarter net income as it continues to invest in new artificial intelligence features, international markets, lobbying efforts, and Experiences and services. Net income was US$1.37 billion during the period, compared with an estimated US$1.46 billion.
For the full year, Airbnb now expects its adjusted earnings margin to be about 35 per cent, an increase from its August guidance of “at least 34.5 per cent.”
“As we look forward to 2026, we are focused on maintaining strong margins while continuing to invest in growth initiatives,” the company said in the letter. BLOOMBERG
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