The Airbnb shares fall 15% Wednesday before the market opened, following the company’s announcement of an expected shortfall in third-quarter revenues and a reduction in booking times.
The San Francisco-based company’s forecast indicates that travelers are making last-minute reservations due to economic uncertainty. Thus, Airbnb reported a second-quarter profit of $555 million, down from $650 million a year ago.
The company’s third-quarter revenue is projected to be between $3.67 billion and $3.73 billion, below analysts’ estimate of $3.84 billion, according to data released Tuesday.
Airbnb reflects the industry trend
Airbnb reports slowing growth in booked nights for Q3 and shorter booking windows globally.
The term “booking window” refers to the number of days between making a reservation and actual arrival. This trend toward shorter booking windows suggests that consumers are opting for travel last-minute due to increased uncertainty and caution in spending.
This pattern is in line with reports recent from other industry playersincluding travel booking providers such as Booking.
Airbnb reports modest growth in average daily rate
The average daily rate (ADR), or cost per night, rose about 2% to $169.53 in the reported quarter. However, the company’s net income margin fell to 20% in the second quarter, compared to 26% last yearindicating a decrease in profitability despite the increase in rates.
Airbnb reported that room nights and experiences booked totaled $125.1 million, marking a 9% increase over last year. The largest growth was seen in Latin America and Asia-Pacific, where room nights and experiences booked increased by 17% and 19%, respectively.
Total revenue for the quarter ended June 30 was $2.75 billion, an increase of 11% compared with the same period last year.
Source: Ambito
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