Shift to sun, ski and suburbs gives Airbnb advantage over hotels
Weary of being locked up in their homes for months, travelers hit the road and booked homes and cottages on the online company
Airbnb CEO Brian Chesky on how his business and Airbnb hosts are faring amid the coronavirus pandemic.
Airbnb’s quarterly results are likely to show the pandemic may have helped the home rental company lure leisure travelers away from big hotels during the global travel collapse of 2020.
Weary of being locked up in their homes for months, travelers hit the road and booked homes and cottages on Airbnb, while avoiding flights and downtown hotels, analysts said.
Airbnb accounted for 18% of the total U.S. lodging revenue in 2020, up from 11.5% in 2019, data from hotel analytics provider STR and vacation rental data company AirDNA showed.
It outperformed the hotel industry and online travel agents such as Expedia and Booking.com thanks to its greater offer of ‘sun, ski, and suburban’ rental homes, Cowen & Co analysts said.
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Airbnb co-founder and CEO Brian Chesky discusses the unprecedented growth of Airbnb and the impact of the coronavirus pandemic on the company.
THE CONTEXT
In 2019, about 90% of Airbnb’s bookings came from leisure travels compared with about 20%-30% for large hotels chains, including Marriott and Hilton, that rely on business travel to grow their profits.
“Unfortunately, the hotel operators do not have as much supply in locations where people are willing to travel,” said Jamie Lane, vice president of research at AirDNA.
Lane said with mass vaccinations later in the year, the share of alternative accommodations including Airbnb will drop before continuing to grow at 2%-3% per year once normal travel patterns return.
Geltrude & Company founder Dan Geltrude provides insight into what to expect next from Airbnb.
THE FUNDAMENTALS
* The San Francisco-based company is expected to report gross bookings of $23.10 billion in 2020, down from about $38 billion a year earlier, according to the mean estimate of 12 analysts according to Refinitiv; gross bookings are seen rising by 50% in 2021.
* Analysts’ mean estimate for Airbnb’s full-year net loss is $3.52 billion, bigger than a loss of $674.3 million a year earlier. Full-year revenue is expected to drop 32% to $3.27 billion.
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Airbnb board member Jeff Jordan discusses the growth of Airbnb and the company going public, saying that it has 'revolutionized' travel.
WALL STREET SENTIMENT
* Of 34 brokerages, 20 rate Airbnb’s stock “hold”, 12 “buy” or higher and two “sell” or lower
* Wall Street’s median 12-month price target for Airbnb is $156, about 22% below its last closing price of $200.20.
* The company’s stock has nearly tripled since listing in December.
Constellation Research founder Ray Wang on what to expect from Airbnb's first day of trading.