Analyst Note| Dan Wasiolek |
Narrow-moat Airbnb saw stout second-quarter demand and profit improvement, aided by continued strength in the U.S., flexible working, and a broadening of travel to regions like Europe. Specifically, bookings reached 137% of 2019’s level, up from 104% in the prior quarter. Bookings were driven by rates that were 138% of the prepandemic level, with room nights reaching 99% of 2019’s level. Rates have been pushed higher by a travel mix of U.S. and larger home bookings. This driver should moderate as travel broadens out to other regions like Europe and if traveler flexibility is reduced by return to work. Looking at the rest of 2021, Airbnb commented it was starting to see some increased cancellation rates and slowdowns in booking volume due to pent-up demand already realized and the Delta variant. But we expect demand to remain buoyant. This view is supported by the resilience of U.S. travel demand during the case spikes around the July Fourth, Labor Day, and Thanksgiving holidays in 2020, as well as U.S. hotel and air volumes remaining strong into early August.