(Reuters) -Airbnb forecasts third-quarter revenue above market estimates on Thursday, but industry fears of softening U.S. domestic demand have sent the vacation rental firm’s shares down 4.2% in after-hours trading.
The San Francisco-based company forecast revenue for the quarter between $3.3 billion and $3.4 billion, ahead of analysts’ average estimate of $3.22 billion, as per Refinitiv data.
The company expects to gain from a rebound in urban and international travel but travel companies with larger U.S. exposure are losing domestic business as more consumers opt for vacations abroad.
Airbnb, which receives a majority of its revenue from outside the United States, said global cross-border bookings rose 16% in the second quarter from a year earlier and more guests were returning to cities, with urban nights booked increasing by 13% year-over-year.
“We continue to see signs of travelers returning to cities, historically one of the strongest areas of our business,” the company said. Cross-border travel to Asia Pacific grew over 80% in the quarter.
However, globally its average daily rate (ADR) rose just 1% to $166, as the company said it is looking to moderate price hikes for consumers. Daily rates in North America decreased 1%.
The demand for domestic hotels has been flat in the United States as pandemic restrictions ease and a strong U.S. dollar has encouraged consumers to book flights and stays overseas, according to analysts. But the short-term rental company said the majority of its U.S. customers are still booking domestic stays.
Airbnb’s second-quarter revenue rose 18.1%, to $2.48 billion, ahead of analysts’ estimates of $2.42 billion.
Hotel operators like Marriott International and Hilton Worldwide Holdings also reported a rise in international bookings but a slowdown in U.S. room revenue growth as travel shifted overseas.
Airbnb’s gross bookings rose 13% to $19.1 billion, in line with analysts’ average estimate.
The short-term rental company reported a profit of 98 cents per share, compared with the average analyst estimates of 78 cents per share.
Online travel agency Expedia reported smaller-than-expected bookings for the second quarter.
(Reporting by Priyamvada C in Bengaluru; Editing by Pooja Desai and Maju Samuel)
Credit: The Star : Tech Feed
