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Global Tourism Booms After Pandemic: Airbnb & See Strong Results

HOSPITALITY INDUSTRYGlobal Tourism Booms After Pandemic: Airbnb & See Strong Results

Global tourism continues to rally after the pandemic period. The number of international trips last year increased globally by nearly 34 percent. This year, in Europe and the USA, it will surpass the results from 2019. This is also seen in the good performance of companies in the tourism industry. This week, Airbnb revealed their results for the 4th quarter, reporting an increased demand for accommodation despite the restrictions imposed by cities on short-term property rentals. Additionally, is set to publish their results next week.

In the 4th quarter, Airbnb reported a revenue increase of 16.6 percent compared to the same quarter the previous year. The revenues amounted to $2.22 billion, compared to analysts’ expectation of a $2.17 billion rise. The company, however, reported a loss of $0.55 per share (a net loss of $349 million), attributed mainly to a one-time tax payment of $1 billion. If this expenditure had been excluded, Airbnb would have reported a profit of $0.76 per share. The company also noted a 12 percent increase in the number of reserved accommodations and attractions (it doesn’t report on accommodations alone). The gross value of a single accommodation reservation was $156.7, a 2.6% increase, and the gross margin was 82.7%, up from 81.9% the previous year.

Airbnb has 7.7 million accommodation listings on its platform, offered by 5 million hosts. Most – 3.5 million – have just one listing, and only 0.6 percent of hosts have 20 listings or more. This demonstrates that Airbnb successfully attracts individual landlords and brings new properties onto the market, especially amid many city restrictions on rentals. In some instances, the regulations go even further, like in New York where authorities banned full apartment rentals unless the owner is also resident. After this move, the number of Airbnb listings in New York dropped more than 70 percent. Similar regulations were also introduced in New Orleans and Dallas last year. Discussions regarding Airbnb’s impact on local real estate markets are ongoing in many cities, mainly in the USA and Europe.

Because of these regulations, Airbnb attempts to diversify their income sources by attracting owners outside of urban areas. They also focus on global expansion in places that have previously been less popular on the platform. In 2023, the company recorded the highest growth in Asian and Central and South American markets. Furthermore, the company promotes long-term stays by encouraging property listers to offer discounts for such stays. In 2023, weekly stays accounted for 40 percent and monthly stays 19 percent of all reservations on the platform.

For the first quarter of 2024, Airbnb expects revenues of between $2.03 and $2.07 billion. The percentage increases might not be as spectacular though, as the results for the first quarter of 2023 were very high, mainly due to the strong recovery in demand following the pandemic. It is worth noting that Easter, a period of increased demand for hotel services, falls within the first quarter this year, potentially improving first quarter results and negatively impacting the second quarter.

On February 22nd, will also present its results for the 4th quarter., which operates in the market as a broker without owning properties, is expected to have a quarterly EPS of $29.7. This is higher than the previous year’s $24.7 but significantly lower than the 3rd quarter’s $72.3. In recent quarters, the company has consistently surpassed analysts’ expectations, from 7% for the 3rd quarter of 2023 to 30% for the 2nd quarter of 2023.

According to World Tourism Organization data, global tourism increased by 33.9% in 2023, with 1.28 billion international trips recorded (measured by tourist arrivals). This is still less than the 1.48 billion pre-pandemic figure in 2019. The greatest increase was recorded in Asia with a 155% rise, which opened up later than other regions following the pandemic. Tourist arrivals in Asia are still only two-thirds of the level before the pandemic. Chinese tourists – the most important market – are keen to travel domestically, actually reaching 2019 levels, but the industry is still waiting for international travel demand from China to recover. In the USA, foreign arrivals increased by 26.6% and make up 90.5% of the 2019 level, while in Europe, these figures stand at 17.4% and 94% respectively. If the current growth rate is maintained, the number of foreign arrivals in Europe and the US in 2024 should reach a record level, surpassing the 2019 levels.

Considering the inflation-driven increase in the costs of tourism services – the average foreign trip in 2019 cost $998, compared to $1,145 in 2022 – we can assume that the revenues from tourism in the American and European markets should already return to pre-pandemic levels.

– Paweł Majtkowski, market analyst at eToro.

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