Airbnb has been focusing on expanding beyond its five core markets, which include the U.S., Canada, UK, Australia, and France, by launching new products and services for guests and hosts. Despite facing risks from regulation and competition, the company sees a huge opportunity to grow further around the world. The new services for guests and hosts have been slow in coming, but Airbnb has seen growth in under-penetrated markets during the first quarter. The company has continued to invest in less mature markets where growth in gross nights booked is more than double that of the core markets.
Airbnb CEO Brian Chesky expressed his excitement about expanding into under-penetrated markets and stepping on the gas to accelerate growth. He mentioned countries like Mexico, Brazil, Germany, Italy, Spain, Switzerland, the Netherlands, China, South Korea, and Japan as areas of focus for the company. Chesky believes that Airbnb might have better traction in Asia due to demographics and the use of social media, especially among younger travelers who prefer alternatives to hotels. He also hinted at the company’s plans to expand into other verticals, although specifics were not provided.
Chesky discussed how Airbnb has improved its value for guests compared to hotels in the past year, attributing it to supply keeping pace with demand and prices being controlled. Several factors have led hosts to moderate prices, including the removal or lowering of cleaning fees, weekly or monthly discounts being offered, and a tool for hosts to compare their prices with others in the neighborhood. This has resulted in hotel prices increasing year-over-year, while Airbnb listings on a like-for-like basis have decreased.
In the first quarter, Airbnb removed thousands of listings that did not meet their quality standards. Despite this, active listings, excluding those for experiences, increased by 17% year over year. The company recorded its largest first-quarter net income of $264 million, which more than doubled compared to the previous year, with revenue increasing by 18% to $2.1 billion. The net income was positively impacted by Easter falling in the first quarter of 2024 instead of the second quarter of 2023, and some marketing spend being pushed into the second quarter.
Looking ahead, Airbnb’s second-quarter revenue growth is expected to decelerate to 8-10% from 18% a year earlier due to the timing of Easter and Leap Day in the first quarter of 2023, as well as currency exchange headwinds. Despite these challenges, the company remains committed to expanding into new markets and offering value to guests and hosts. With a focus on under-penetrated markets and new product offerings, Airbnb is looking to capitalize on the vast opportunities for growth in the global travel industry.
