Airbnb warns of 'greater volatility' amid conflicts abroad as sales outlook comes up short of estimates

By Bill Peters

Company says it is 'closely monitoring macroeconomic trends and geopolitical conflicts that may impact travel demand'

Shares of Airbnb fell on Wednesday after the vacation-home rental platform warned of "greater volatility" and weaker trends in nights booked for the fourth quarter amid deepening conflicts abroad.

Airbnb (ABNB) said it expected fourth-quarter revenue of $2.13 billion to $2.17 billion. That was a bit below FactSet estimates for $2.18 billion.

"[The third quarter] was a record-breaking summer travel season for our business," the company said in a letter to shareholders. "We are seeing greater volatility early in [the fourth quarter], and are closely monitoring macroeconomic trends and geopolitical conflicts that may impact travel demand. We currently expect our nights booked growth in [fourth quarter] 2023 to moderate relative to [third quarter] 2023."

The results arrive after a year-long rebound in travel demand and a greater prevalence of hybrid work, which has allowed people to make longer stays at alternative accommodations.

But as President Joe Biden presses Congress for billions of dollars in support for Israel, where military forces have advanced into Gaza, and for Ukraine, which has been battling Russian forces after that country invaded in early 2022, the U.S. State Department has advised people not to travel to Gaza and to "reconsider" travel to Israel and the West Bank.

Airbnb shares fell 3% in after-hours trading.

For the third quarter, Airbnb had what it described as a "record summer travel season." It reported gains in international demand, saying that business in the Asia-Pacific region had recovered to prepandemic levels.

The company reported third-quarter net income of $4.37 billion, or $6.63 a share, compared with $1.21 billion, or $1.79 a share, in the same quarter last year. Revenue climbed to $3.39 billion, compared with $2.88 billion in the prior-year quarter.

Analysts polled by FactSet expected Airbnb to earn $2.11 a share on revenue of $3.37 billion.

Nights and experiences booked during the third quarter grew by 14% to 113.2 million, helped by growth in all regions. Active listings on the platform grew by 19%.

-Bill Peters

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11-01-23 2044ET

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