Airbnb’s revenue predictions for Q3 anticipations did not meet the Wall Street’s expectations on Tuesday, reporting a decrease in profitability for Q2, citing declining demand from US clients. Due to increasing economic volatility, domestic travel spending has been on the decline since the beginning of the year in the US. The company, based in San Francisco, declared a Q2 profit of £508 million, or 86p per share, a fall from last year’s £650 million, or 98p per share.
According to information from the London Stock Exchange, Airbnb anticipates its Q3 revenues to range between £3.67 billion and £3.73 billion, falling short of analysts’ expectations of £3.84 billion. Airbnb is predicting a slowdown in night bookings for Q3 and has noticed shorter global booking lead times.
In the travel industry, booking lead time, which refers to the interval from booking date to the actual arrival date, is a significant measure. Reduced booking periods may indicate last-minute bookings due to increased uncertainty or cautious spending. In line with this, booking.com, another travel reservation provider, previously confirmed that lead times had decreased in Q2 and were likely to continue falling in Q3.
Airbnb’s average daily rate, or price per night, rose by around 2%, reaching £169.53 for the reporting quarter. The holiday rental company is predicting a slight increase in the average daily rate for the third quarter.
The net-income margin, or profit per pound of revenue, dropped to 20% in Q2 from 26% the previous year. The number of bookings for nights and experiences has increased to 125.1 million, marking a 9% rise from the previous year, with the greatest growth in bookings observed in Latin America and Asia-Pacific at 17% and 19% respectively. The gross booking value reported by Airbnb was £21.2 billion, a 11% increase from the previous year.
As of the end of Q2 on June 30, Airbnb recorded a total revenue of £2.75 billion, an 11% increase from the same period in the previous year. -Reuters
(c) Copyright Thomson Reuters 2024