Airbnb’s Brian Chesky: Earnings level to “thrilling yr” for journey

Lingering results of COVID-19. Recessionary fears. A battle in Ukraine. If 2022 didn’t look promising for the journey trade, 2023 doesn’t look significantly better.

So why was Airbnb CEO Brian Chesky chattering Tuesday like a schoolboy with a Valentine from each child the category? Simply take a look at the numbers on the chalkboard.

Fourth quarter revenues of $1.9 billion had been up 24% from the identical interval in 2021. Web revenue for these three months was $319 million, making it the corporate’s most worthwhile fourth quarter ever. Adjusted EBITDA was $506 million in This autumn – one other firm document – and generated a full-year whole of $2.9 billion.

After ticking off all of the obstacles his firm — and journey basically — confronted in 2022, Chesky couldn’t be blamed for sounding slightly giddy.

“By all of this, folks proceed to journey,” he mentioned. “And 2022 was a document yr for Airbnb.”

Tuesday’s report capped a yr of record-setting financials for the U.S.-based home-sharing and various lodging big. Income eclipsed $1.5 billion for the primary time within the first quarter of 2022. The corporate adopted that up with the most worthwhile second quarter in its historical past, and the third quarter was Airbnb’s most worthwhile quarter ever.

Firm officers anticipate extra of the identical in 2023, with sturdy demand for early summer time bookings throughout the primary few weeks of the yr indicating extra good issues forward.

“Client confidence to journey stays actually excessive,” Chesky mentioned in concluding a name with monetary analysts to debate the outcomes. “I believe a part of that’s it doesn’t matter what occurs on this planet, folks need to journey. For many individuals, the workplace is now Zoom. The mall is now Amazon. The theater is now Netflix. Journey goes to turn into a vital means that folks expertise the world this yr. Due to this fact, that is going to be an thrilling yr for Airbnb and touring all all over the world.” 

Visitor demand remained sturdy all through 2022, the corporate reported, with all areas seeing important progress in 2022 as friends more and more crossed borders and returned to cities on Airbnb.

“This was the bread and butter of Airbnb earlier than the pandemic,” Chesky mentioned. “Now each segments proceed to speed up whereas non-urban and home journey stay sturdy.” 

Sturdy progress in Nights and Experiences booked – the full of nights booked for stays and seats booked for experiences after cancellations – drove practically $13.5 billion in gross reserving worth for the quarter, a 20% improve yr over yr. For the total yr, these figures noticed a 35% improve to $63.2 billion.

Provide progress

Whereas demand is rising, so is provide. The corporate ended the yr with 6.6 million lively listings — 900,000 greater than it had originally of the yr, excluding China.

“Why are listings accelerating in progress?” Chesky mentioned. “We imagine there are in all probability two elements that drove this progress. First, demand drives provide. Hosts are interested in supplemental revenue that they will earn on Airbnb, which is usually crucial throughout powerful occasions. Second, our product enhancements are working. Over the previous two years we’ve made it extra engaging and simpler to turn into a number.”

He shared a narrative of his expertise when in November he listed his visitor room, reworked with a watch to the nostalgia of Airbnb’s founding. He joked of getting dinner along with his friends adopted by “Chesky’s Chips, chocolate chip cookies from a cherished household recipe — that I acquired off Google.”

The expertise offered firsthand insights into what assist potential hosts wanted earlier than itemizing their houses – or guestrooms – on Airbnb, he mentioned.

“It’s been an incredible strategy to join with folks,” he mentioned. “However I additionally imagine that corporations that make one of the best merchandise make merchandise for themselves. And Airbnb will solely be as profitable as our hosts. And one of the best ways to know our hosts is to be one.”

He mentioned the introduction of Airbnb Setup — the place respective hosts can join with “superhosts” without spending a dime one-to-one steerage all through their first reservation — led to a 20% improve in new lively hosts in contrast with earlier than the launch.

However together with progress, the CEO additionally spoke of the significance of holding down prices as a cause for the corporate’s success in 2022.

“Throughout the top of the pandemic we made some very tough selections to scale back our spending, making us a leaner and extra targeted firm,” he mentioned. “We’ve stored this self-discipline ever since. Over every of the previous two years we’ve solely modestly elevated our head rely. In reality, in contrast with 2019, our head rely is definitely down 5% whereas our income is up 75%.”

One other instance of saving prices: Airbnb reported $350 million in This autumn gross sales and advertising bills, down from $409 million yr over yr. The discount is, partially, a technique to frontload advertising bills within the first half of the yr to capitalize extra on summer time tourism. (Over all of 2022, gross sales and advertising prices had been up by $330 million from the earlier yr.) Nevertheless it’s additionally a mirrored image of Airbnb’s standing out there.

“Airbnb type of stands in a category of its personal. We’re a noun and a verb used everywhere in the world. … We’re often called an inexpensive strategy to journey,” Chesky mentioned. “Finally, 90% of our visitors comes direct. That’s as a result of we’ve got one thing that’s distinctive. … What we’re actually targeted on doing: We’re obsessing over offering the easiest expertise for friends. And if we do this and ideal that have and do actually nice advertising, I believe we’ll do very nicely.”