Vacation Rental Booking Company airbnb inc Shares plunged 11.5 percent in after-hours trading after it said Tuesday it expected fewer bookings and lower average daily rates in the second quarter than a year earlier.
US travel companies, which have benefited from higher prices and hybrid work, are moderating their outlook for 2023 as pre-pandemic travel patterns return and consumers seek affordable accommodation amid high… inflation And recession Fear.
Airbnb CEO Brian Chesky told investors on a call that people in North America are most sensitive to prices, especially in the United States.
“In the United States, the lowest price list has the highest occupancy,” he said.
The company’s gross booking value jumped 19 percent from a year ago to $20.4 billion in the first quarter, consistent with a 19% increase in nights experienced and 121 million bookings. Average daily rates were flat year-over-year at $168.
Nicolas Cowley, an analyst at Third Bridge, said pressure on household budgets was likely to cause consumers to choose more affordable housing, leading to a decline in average daily rates in future quarters.
“The company now faces stiff competition from rivals such as Booking.com and Expedia’s Vrbo, so its future looks less certain,” he added.
Airbnb said to stay competitive, it was equipping hosts with new tools to normalize pricing and launching its marketing campaigns to attract cost-conscious travelers ahead of the peak summer season .
“Some of the pressure that we’re seeing on total revenue growth is clearly some of the higher (average daily) rates,” David Stephenson, Airbnb’s chief financial officer, told investors.
The company said earlier this year that average daily rates would remain under pressure as vacationers returned to low-cost urban rentals.
It forecast second-quarter revenue of between $2.35 billion and $2.45 billion, broadly in line with analysts’ expectations.
(Reporting by Priyamvada C in Bengaluru and Doyinsola Oladipo in New York; Editing by Shinjini Ganguly and Jamie Freed)