Skift Take
Some hosts left Airbnb during the early part of the pandemic because they lost their incomes and were angry about refund policies. Airbnb's host and listing' numbers show it has turned a corner for now.
Dennis Schaal
One potential issue with Airbnb’s growth plans has been whether it could boost its ranks of hosts and listings enough to meet the demand from guests around the world.
After several years of advertisem*nts and programs to bring on new hosts, Airbnb did much to answer that question Tuesday.
Airbnb said it added more than 1 million active listings in 2023: The total is now up to a record 7.7 million, compared with 6.6 million at the end of 2022.
And it has a roster of more than 5 million hosts, a jump of about 1 million year over year. For the fourth quarter, Airbnb said its supply increased 18% year-over-year, with all regions growing by double-digit percentages.
There are still challenges, of course. Adding more than 1 million hosts and another 1 million listings doesn’t mean there will be enough to go around for this summer’s Paris Olympics, or for Myrtle Beach on July 4th weekend. And a chunk of those listings are duplicates, inflating that 7.7 million number.
Still, the growth is impressive.
Italy Tax Dispute Led to Fourth-Quarter Loss
Italy’s tax on short-term rentals was the major contributor to Airbnb’s fourth quarter turning red.
Without admitting wrongdoing, Airbnb in December settled a tax probe in Italy for $620 million covering 2017-2021. The dispute grew out of a 2017 law that required Airbnb to withhold 21% of hosts’ rental income and to remit it to Italian authorities, who claimed Airbnb was evading taxes.
Airbnb said one-time expenses for tax withholding and reserves for taxes amounted to $1 billion. That led to a net loss of $349 million in the quarter. That compared with $319 million in GAAP net income a year earlier.
For full-year 2023, however, Airbnb’s net income grew 152% to $4.8 billion.
Airbnb Says It’s Keeping Rates Low for Guests
Revenue in the fourth quarter climbed 17% to $2.2 billion, driven by 12% growth in nights and experiences booked and what the company described as a “modest” boost in average daily rates.
That modest boost was less than 1% in the fourth quarter compared with the year-ago period. Airbnb claimed hotel average daily rates rose about 7%.
A Small Percentage of Hosts Removed or Lowered Cleaning Fees
Airbnb said 300,000 listings – about 3.8% of the total — removed or lowered cleaning fees since the company began displaying the total price before taxes in the U.S. and elsewhere (the EU has had the feature for several years) early in 2023. The company said 40% of active listings don’t charge a cleaning fee.
Urban Stays Are Still Well Below Pandemic Levels
Airbnb stays in urban areas accounted for 51% of gross nights booked in the fourth quarter, well below the 59% in the fourth quarter of 2019. Still, stays in high-density locales jumped 11% in the fourth quarter.
What Happened to Airbnb ‘Expanding Beyond the Core’
Airbnb said it is expanding in Switzerland, Belgium and the Netherlands, following growth in Germany, Brazil and South Korea in previous quarters.
Interestingly, Expedia Group explicitly tells financial analysts that it wants to be opaque about which new markets it is pursuing for competitive reasons. But Airbnb doesn’t have much hesitation in identifying them.
In the past couple of years, Airbnb has talked about “expanding beyond the core,” including broadening its geographic footprint, but also selling various new services to hosts.
The latter initiative — becoming a platform to sell various add-on services to hosts — hasn’t happened yet but is likely in the works.
Airbnb’s Outlook
Airbnb projected revenue of $2.03 billion to $2.07 billion for the first quarter of 2024, a year-over-year jump of 12-14%.
