Airbnb Inc. (NASDAQ: ABNB) jumps down 13.65% in pre trading session on Wednesday as the vacation home rental firm issued a cautious sales prediction for the second quarter, implying that rising prices and an uncertain economic outlook are beginning to impact on customer demand for trips.
The San Francisco-based home-sharing firm anticipates revenue of $2.35 billion to $2.45 billion in the three months ending in June, marking a 12% to 16% rise over the same period last year and its slowest rate of growth to date. According to a Bloomberg poll, analysts expected $2.4 billion. Airbnb expects profits before interest, taxes, depreciation, and amortization to be comparable to the second quarter of last year, excluding certain charges.
Airbnb has profited in recent years from changes in work and lifestyle caused by the epidemic. However, the post-Covid rush to travel is fading, and some consumers are cutting down on leisure spending in the face of persistent inflation and an unstable economy. According to Airbnb, the number of nights and experiences booked in the present season would be lower than a year ago, when demand was high due to the emergence of the Covid-19 Omicron variety. As a result, the business anticipates that year-over-year growth in nights and experiences booked would be slower than revenue in the second quarter.
The projection comes on the heels of a record-breaking quarter in numerous categories. Airbnb’s revenue grew 20% to $1.82 billion in the three months ending March 31, the company’s largest ever for that time. This compares to analysts’ expectations of $1.79 billion. Adjusted profits before interest, taxes, depreciation, and amortization were $262 million, exceeding Wall Street expectations and setting a new high for the first quarter. Earnings per share were 18 cents, compared to 17 cents predicted by experts.
According to Airbnb, average daily prices were $168 in the first quarter, almost the same as a year earlier. The impact of foreign exchange, people’s willingness to pay, and a movement in bookings into urban and other forms of rentals balance price appreciation. However, Airbnb expects “slightly lower” daily rates in the second quarter, thanks in part to new host pricing tools launched last week and a shift to more urban rentals.
In an interview last week, CEO Brian Chesky stated that the robust demand he anticipates for this summer could be much stronger if not for the economic uncertainty. He observed that airline fares are still high, adding that “when the cost of flights goes up, that impacts our business.”
