Airbnb: "Completely Additive"

“Nearly two years into the pandemic, it’s now clear that we are undergoing the biggest change to travel since the advent of commercial flying… For the first time ever, millions of people can now live anywhere.”

- Airbnb CEO Brian Cheksy

At a time when many of the (former) COVID-winners find themselves nursing a nasty hangover, Airbnb is in rarefied air; it’s on a short list of businesses that appear set to emerge from the pandemic in a structurally stronger position. To be clear, that outcome isn’t solely due to external factors; building innovative solutions like “I’m Flexible” helped Airbnb get here.

On to the financial results: In Q4, Nights & Experiences (N&E) booked on the platform declined by 3% compared to Q4 FY19, with strength in North America (+20%) and Latin America (+22%) offset by ongoing weakness in Asia Pacific due to a lack of cross-border travel. While Asia Pacific continues to be a headwind for Airbnb, with N&E ex-APAC up 8% in Q4 FY21 compared to Q4 FY19, we’re seeing signs of improvement; as noted in the shareholder letter, gross nights booked for cross-border travel were at ~76% of FY19 levels in Q4 FY21, compared to ~33% of 2019 levels in Q1 FY21. (“As more countries reduce travel restrictions, we expect a continued, albeit choppy, recovery of cross-border travel to be a tailwind to future results.”)

For the year, total N&E booked were 301 million, down ~8% from FY19 (but up ~56% from FY20). Given that cross-border travel and urban travel both remain below pre-pandemic levels, these results speak to the “inherent adaptability” of Airbnb’s platform. As those two categories recover in the coming years, N&E booked is set to reach new heights. (As noted in the S-1, bookings for travel that was >500 miles from the guest’s origin accounted for more than 50% of Airbnb’s business in the last three months of 2019).