Travelers have started returning to Airbnb’s platform in the third quarter of 2020 but they are staying away from the hotels. This showed that there is hope left for the travel industry in 2021.
Airbnb Inc.’s business had declined due to the Covid-19 pandemic but has quickly rebounded back to the point in 2020 which had made it the biggest public offering in the same year. Now we should know what to expect of Airbnb in 2021.
Airbnb’s First Earnings To Be A Good Sign For Travel Industry
Airbnb’s stock, ABNB, is down by 5.29% currently. The company will be reporting the financial results for the first time after going public. They will be announced on Thursday afternoon in which it will wrap up the year for the company, the year which was quite difficult for the travel industry. So far, it seems that this year was far better for the company as compared to the other travel industry company. This happened as the travellers eventually decided to travel near to their home where they could easily avoid people.
Airbnb has proved that it is much more resilient to the pandemic shock that had shook the travel industry, said D.A. Davidson analyst Tom White.
Airbnb has posted up a $219 million profit in the third quarter of 2020. This profit resulted out of the aggressive cost cutting measures which it implemented. The revenue earned in the quarter is $1.34 billion which is the second biggest revenue in any quarter. But with the rise in the Covid-19 cases in the fourth quarter, this led to the renewed travel restrictions that weighed on many companies in the travel sector. The shares like those of Expedia share, EXPE, which is currently down by 1.36% and the same is expected in Airbnb’s performance in the fourth quarter. Experts believe that the revenue of Airbnb could be less than $750 million in the fourth quarter.
The travel industry, more importantly, for Airbnb, depends on the easing of restrictions on the government. Airbnb had released a report near the end of January in which it stated that in its own survey it found that the majority of the Americans, about 54%, have already booked or planning to travel or expect to travel in 2021.
It will be seen that if the travelers will still remain averse to the major competition of the company – hotels.
Except the structural change in the behaviour of the traveller, the shifting in preference is likely to be very gradual particularly when considering hotels are back on the same level field of playing as written by Justin Patterson of KeyBanc Capital Markets recently.
What are the expectations on Airbnb?
Earnings: Analysts who have surveyed by a company, FactSet on an average expect a loss of around $8.41 per share. This is due to the stock compensation costs of Airbnb’s IPO. The estimates from hedge-fund managers, analysts, executives and others are expecting a loss of around $6.09 per share on average. This is a general outlook of the experts.
Revenue: Analysts state that they on an average expect the revenue to be around $739.4 million as per FactSet. The estimated guiding is around $775.9 million.
Stock movement: The shares of Airbnb have increased by 35% from their time on the public markets. The S&P 500 index or SPX, currently -0.97% has increased by 6.5% on that time.
What else analysts are saying?
On the pandemic – Truist Securities analysts say that they are expecting a fourth quarter and a quarter-over-quarter slowdown in many nations and there is persistent weakness in the first quarter.