Airbnb Earns “5 Stars” From Investors

Bookings Surge

Despite record inflation and recessionary fears, Airbnb (ABNB) reported a strong 2022. In fact, it posted its first annual profit ever.

The San Francisco-based rental company brought in a profit of $1.9 billion last year, attributing its success to high travel demand, especially in international markets.

For Airbnb hosts, 2022 marked a banner year. Average daily rates rose more than 30% last December, compared to the same period pre-pandemic. In the first quarter of 2022, the average daily rate for an Airbnb rental peaked at $168. However, the company expects these rates to cool off this year.

Going International

One of Airbnb’s main objectives as of late has been to add as many hosts as possible. In order to do so, it has extended its focus beyond the US market.

In 2022, the company added 900,000 listings around the world, bringing its global total to 6.6 million rentals. This excludes China — last year, in the wake of the Asian nation’s zero-COVID policy, Airbnb exited the market altogether.

These additional listings came in handy last year as many Americans, eager to take advantage of a strong dollar, booked international trips. Thanks to its expanded roster of hosts, Airbnb was able to piggyback off this travel trend.

Airbnb Rates

This quarter’s good news doesn’t end with Airbnb. It extends to travelers, too.

The average rate for an Airbnb rental could get more affordable as the year progresses. Airbnb’s management cautioned investors that it expects “increasing downward pressure” for room rates this year. This is mainly due to new discount tools for hosts, as well as more guests booking in cheaper markets, which incentivizes hosts to lower rates to remain competitive.

Due to its excessive cleaning requirements and fees, some travelers are ditching Airbnb and returning to hotels. But the company is also rolling out a new feature providing more fee transparency. So, if you have a trip coming up in 2023, even the 1-star reviewers out there may find it’s worth redownloading Airbnb.

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