Reports Q1 2021 earnings Thursday, May 13 after close
Expected Revenue: $ 718 million
EPS Expectation: – $ 1.06
When Airbnb (NASDAQ 🙂 releases its latest quarterly report later in the day, investors will be eager to know if the gradual reopening of the US economy will help boost sales of this alternative lodging business after a year.
The platform's first quarter earnings report is also important, as spring season bookings can provide some insight into the level of pent-up travel demand for the summer period, which is so crucial to reviving the devastated tourism economy decimated by the COVID-19 pandemic.
Airbnb Weekly Chart.
Early indications suggest that San Francisco-based Airbnb is in a good position to exceed analyst expectations. The company's CEO, Brian Chesky, told CNBC in a recent interview that the company will need to add millions of new hosts to accommodate guests as travel progresses.
According to the Chesky interview with CNBC's "TechCheck", segment:
"I think we will probably have a first-class problem where there will probably be more guests coming to Airbnb than we will have hosts for, because … we think there will be a travel recovery unlike anything we have ever seen. "
The latest earnings reports from other travel-related companies also show that after a year of pandemic-related lockdowns and border closures, the travel industry is starting to see the green shoots of recovery.
Expedia Group (NASDAQ 🙂 said last week that its gross bookings were 14% lower than a year earlier – a sharp rebound from falling nearly 70% in the previous two quarters. Booking Holdings (NASDAQ :), the largest online travel agency, also reported a significant increase in the number of room reservations made at the beginning of the year.
Eased Restrictions
Behind this recovery lie relaxed COVID restrictions in the US, where the introduction of vaccines accelerated this spring. US President Joseph Biden last week announced a goal of having 70% of the country's adult population receive at least one dose of a COVID-19 vaccine by July 4
Analysts and industry experts expect the vaccinated US population to be more willing to travel this summer, boosting Airbnb rentals.
After Airbnb survived when liquidity dried up last spring, Airbnb quickly changed its tactics to remain relevant as consumer preferences began to change. The company began promoting its local lodgings to meet the rising demand from travelers who were reluctant to take long flights during the pandemic.
Airbnb's relative resilience in a historically bad year for the travel industry is the result of a flexible business model that allowed the company to meet customers wherever they wanted to go. That meant that city dwellers fled to less crowded locations or families and groups who wanted to vacation close to home.
These steps and the company's cost savings make ABNB the best asset in the travel industry, according to some analysts. In a recent report, Mizuho wrote that it expects Airbnb room night trends to return to 2019 levels in the second half of 2021.
According to Canaccord Genuity analysts:
“Bottled-up travel desires and the trend to work from anywhere has already led to lower availability of offerings in North America, and management is planning a recovery in material travel this year by prioritizing expanding offerings including a marketing plan targeting hosts and simplifying host onboarding. "
Bottom Line
Airbnb shares have weakened significantly since reaching a record high of nearly $ 217 in February, following the IPO in early December 2020. The stock closed at $ 140.25 on Wednesday, down 35% from its peak in February.
In our opinion, that decline has made this stock attractive, especially as demand for travel is expected to increase this year. Today's earnings could provide further evidence to support that optimistic view.
