Dive Brief:

• In its first-quarter earnings results, Airbnb reported over 121.1 million nights and experiences were booked during the period — a record high.
• During the company’s earnings call with analysts, co-founder and CEO Brian Chesky stressed the need to make Airbnb affordable in order to lure younger travelers away from hotels, pointing to recent launches such as Airbnb Rooms. He said that, in contrast to hoteliers, Airbnb expects prices to moderate this summer as opposed to going up.
• Despite reporting a solid backlog that’s “approximately 25% stronger than a year ago,” the company expects bookings and average daily rates to decline in the current quarter as compared to last year. In response, Airbnb’s stock tumbled, closing down nearly 11% on Wednesday.

Dive Insight:

Airbnb reported first-quarter revenue of $1.8 billion — its highest first quarter to date — increasing 20% year over year, thanks to solid growth in nights and experiences booked as well as stable ADRs.

But the home-share giant also offered a slightly weaker-than-expected guidance and a cautious outlook for the current quarter, saying in its shareholder letter that second-quarter comparisons would be tough since “Nights and Experiences Booked will have unfavorable year-over-year comparisons in Q2 2023 as we overlap pent-up 2022 demand following the COVID Omicron variant.”

Looking ahead, Airbnb stressed the need for more affordability — in sharp contrast to rising hotel rates — as a way to support overall bookings growth and reignite demand.

Highlighting the company’s recent initiatives like Airbnb Rooms, Chesky said on the company’s earnings call that “people do want low price listings. And we expect that as Airbnb rates continue to normalize, and hopefully, our rates do not increase as fast as hotels over the next couple of years, that we're going to see continued increase in occupancy for more listings in Airbnb."

Providing more supply on the platform, Chesky said he predicts rates to level out, attracting more customers. “My hope is that, while the hotel CEOs have said they expect demand to drive prices up this summer, we want to actually have prices moderate. We think that's going to bring in a whole new generation of travelers to Airbnb.”

In the first quarter, Airbnb grew its supply 18% year over year, with the fastest growth happening in North America and Latin America, while the number of nights and experiences booked increased 19% as compared to a year ago. The platform also reached its highest number of active bookers in the first quarter.