Airbnb’s third quarter revenue beat expectations, but the short-term rental company doesn’t expect its coming business to keep its streak going.
The San Francisco-based company reported its outlook for the fourth quarter is already disappointing analysts, according to an earnings call reported by Bloomberg. The company forecasted revenue for the fourth quarter to hit $2.13 billion to $2.17 billion, slightly below analysts’ average expectations.
The first few weeks of the three-month period have already seen “greater volatility” as the company Airbnb expects the summer’s record travel season to give way to slower demand, weighed down by macroeconomic trends and geopolitical conflicts.
That demand was high over the summer as “revenge travel” saw people spring from their pandemic enclaves and make up for lockdown-lost seasons. Airbnb revenue rose 18 percent year-over-year in the third quarter to $3.4 billion, beating the $3.37 billion expectation, according to CNBC.
The number of nights and experiences booked through Airbnb also jumped by 14 percent. The 113.2 million bookings came out ahead of the average estimate for the third quarter.
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But trouble may be on the horizon for Airbnb as it tries to steady itself for the next era of the company. Regulatory risks are becoming commonplace as local laws, including those in New York City, tighten the clamps on short-term rentals.
CEO Brian Chesky has previously said the company will lean on offerings like experiences, which include bar crawls, guided tours and photo shoots. The company is also working to give hosts dynamic pricing insights to better compete with hotels and rival companies, as well as increase the use of artificial intelligence to weed out errant listings on the platform.
During premarket trading on Thursday, Airbnb shares dropped roughly 1 percent. The stock is up 40 percent year-to-date through Wednesday.
— Holden Walter-Warner