Airbnb has added a variety of features and
services to bring more supply onto its platform - such as matching
potential hosts with existing Superhosts and creating host insurance and other protections.
And it seems the efforts are working, as the
company’s financial results from the second quarter of this year show supply
grew 19% compared with the same period in 2022, giving the platform 7 million
total active listings as of June 30. Since it went public in 2020, Airbnb said it
has seen an acceleration every quarter in year-over-year growth of total active
listings (excluding China where listings were taken down in July 2022), and urban is growing faster than vacation rental. About 90% of its hosts are what Airbnb
describes as “individuals” while the rest are “professional,” and from April through June this year, inventory growth was most pronounced in Asia Pacific and Latin America.
International expansion was one of many examples of
future priorities that co-founder and CEO Brian Chesky discussed on a call with
analysts to review the quarterly results.
“Airbnb is under-penetrated in most countries
around the world,” he said.
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“Since the beginning of the pandemic, Brazil has
more than doubled its size and Germany is 60% larger. So we’re going to take
that playbook and take it to Asia. We’re starting with Japan and Korea. … It is
a huge opportunity for growth … and Latin America … and there’s a lot of
countries in Europe we’re not that penetrated.”
Chesky also said Experiences – which paused
taking new listings in April – is “ready to scale. I think you will see
growth in years to come.”
And he said the company is considering a variety
of new revenue opportunities such as advertising on the platform, hotel-like services for
guests and a "co-host marketplace" to match people with homes who don't have time to host with individuals who would like to host but don't have a home to list on the platform.
Airbnb is also considering more features
to support stays of one month or longer, which accounted for 18% of nights
booked in Q2 up from 13% pre-pandemic and which Chesky said is creating a “new
category that’s between travel and housing.”
“And I think in the next decade it will be a lot
higher than 18%,” Chesky said. “You have hundreds of millions of people … that have
some incremental flexibility that did not exist 10 or 20 years ago … long-term
we’re very bullish [on this].”
Chesky also spoke about Airbnb’s work with
generative AI – what he described as a “once-in-a-generation platform shift …
bigger than mobile … akin to the internet.” He said for Airbnb the technology will create efficiency
in the short term – such as by automating and improving customer service
functions – and growth in the long term, in the form of a “whole new interface”
with personalization that will make the Airbnb app like an “AI concierge.”
But while Chesky expressed excitement about these
priorities to “expand beyond the core,” he also said there is still substantial
runway to be gained by “perfecting the core service,” including by ensuring it
is affordable and reliable.
After hearing concerns about affordability,
Airbnb added new pricing tools for hosts to make it easier for them to offer
discounts and promotions and made it easier for them to see similar listings,
which Chesky said has spurred some to reduce their rates. In April Airbnb also renewed
its focus on individual rooms, which Chesky said has average prices of $67
per night, “significantly lower than the average hotel room.”
“The hotel industry is about 10 times the size
of Airbnb. And I think that almost anyone that stays in a hotel could stay in
an Airbnb,” he said.
"Our prices are essentially flat year over year
... And if you compare to them hotels, depending on which data you take, hotels
are up somewhere between 4% or as much as 10%.
I think people come to Airbnb for one-of-a-kind
spaces at great value, and if we can keep prices very affordable and also focus
on reliability, I think there is going to be a lot of demand to come."
Airbnb’s financial figures
The number of nights and experiences booked on
Airbnb in the second quarter this year was up 11% year over year, to more than 115
million. The company also saw the number of active bookers grow in every region,
and it had more first-time bookers compared to Q2 2022.
Revenue in the second quarter was $2.5 billion,
up 18% year over year and up from $2.1 billion in the first quarter this year.
Net income was $650 million, up 72% compared with last year in the second quarter,
and net income margin for the quarter was 26%, its highest second quarter ever.
Adjusted EBITDA was $819 million, up 15% compared
with Q2 2022, and adjusted EBITDA margin was 33% compared with 34% in the same
period last year.
Marketing spend in the quarter was $486 million,
up from $379 million in Q2 2022. The company said it is seeing positive results
from brand marketing across all key markets and is making continuous improvement
in performance marketing that is driving high ROIs.
“It’s a full-funnel approach,” Chesky said.
“It’s just a testament to when you invest in a
brand, when your brand is a noun and a verb, and you have something unique, you
get those benefits.”
Airbnb's commercial director Amir Segall spoke with PhocusWire’s senior Europe reporter, Linda Fox, earlier this month at Phocuswright Europe. Watch that discussion below.