Airbnb (NASDAQ: ABNB) offers a unique way to invest in the travel industry. In this clip from “3 Minute Stocks Updates” on Motley Fool Live, recorded on February 16Motley Fool contributors Toby Bordelon and Brian Feroldi explain how Airbnb has rebounded strongly and discuss some of the accommodation company’s goals for this year.
Toby Bordelon: Let’s talk a bit about Airbnb, shall we? They had a solid quarter, 73.4 million room nights and experiences booked for this last quarter. Over $300 million for the fiscal year, a 56% year-over-year increase but, more importantly, just an 8% drop from 2019, so they’re catching up. But the numbers beyond that look even better. Gross bookings up 91%, for the quarter up 32%, compared to the same quarter of 2019 at $11.3 billion. It’s awesome. Thirty-two percent increase over pre-pandemic levels. I like this. For the fiscal year, we have gross bookings valued at approximately $74 billion, up 96% year-over-year and 23% from 2019. Revenue, 78% of a year-over-year, up 38% from two years ago. Net revenue. They have a positive net profit of $55 million compared to a loss in 2020 and 2019 for the fourth quarter. It’s really solid. Let me show you this in pictures. Let’s show this so you can see the graphs here. You see here, I like the chart because it makes it very clear. Quarterly revenue. Boom. Very nice increase between 2019 and 2020. Quarterly net profit or quarterly net loss. We had a net loss two years ago. Finally, positive here. Now that’s adjusted, but it’s still worth comparing the relative aspects here. EBITDA, you said percentage of revenue, 22%, and then we have all these losses from the time. Really nice what they did here. What do all these numbers mean? This means they have recovered from the pandemic. I’ll just say it. We still have the ongoing pandemic, but they have recovered. They are doing much better now than they were in 2019. They are generating more revenue than before the pandemic. They are actually profitable this quarter. They were losing money before the pandemic. I think it’s a huge win for them. They see that travel is changing. They talked about it in the letter to shareholders. They’re adapting to this change, making the platform more flexible for travelers and hosts, and taking advantage of trends like remote working and longer-term travel. Really cool. CEO Brian Chesky is living at Airbnbs this year. From Atlanta, he travels the world. He experiences the product first hand. Among other trends they discussed in their letter to shareholders, regular travel has increased by 45%. Non-urban overnight stays booked increased by 45% compared to the fourth quarter of 2019. Urban trips are returning a little more slowly. Customers need to plan more trips. The average stay is up 15%, the average length of stay. Stays of more than seven days represent half of the gross nights booked. People are now traveling longer. They had six million active listings at the end of 2021. Their goal for this year is to allow more people to travel and live anywhere on Airbnb. They will recruit more hosts. They really need to do this to grow and they are increasing the service. It’s critical. This is one of the problems they have. Unlike hotels, they essentially outsource all of their sourcing to independent hosts and it’s hard to keep this product consistent, so it’s nice to see them focusing on that service. But, I like what I see here.
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Brian Feroldi: Airbnb is great to see them recover and I totally love the CEO who says he’s going to live in other people’s homes. I mean, no better way for a CEO to learn about the company’s product than to use it themselves. But, Airbnb’s stock has rebounded very strongly from lows just a few weeks ago. As business improves, this company is currently trading at 20x sales and has a relatively large market capitalization. Are you a buyer at today’s prices?
Bordeaux: I am, but in small portions. I own a little. I’m thinking of adding a little more. I think it’s a great company to own if you want to invest in the travel industry. One of the reasons I love them is that they give you an alternative to traditional accommodation companies like hotels and timeshares. It’s a different model, a very different model. You’re using third party hosts instead of owning and managing the inventory yourself and arguably that sales price figure is justified at least to some degree as they don’t have inventory like the hotels, so you kind of have a bit of a different pattern going on here. I wouldn’t really compare that to say hilton (NYSE: HLT) Where Marriott (NASDAQ: MAR). But, be careful here. I wouldn’t want people to get caught up in the hype of “Oh, hot new company. Really cool. Everyone loves it.” It’s a hosting company. It’s a travel agency. It is still above all a leisure business. That’s what they do. Don’t get distracted by a lot of hype and forget what their real business is and invest accordingly.
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Brian Withers has no position in the stocks mentioned. Toby Bordelon is the owner of Airbnb, Inc. and Marriott International. The Motley Fool owns and recommends Airbnb, Inc. The Motley Fool recommends Marriott International and recommends the following options: Long January 2023 $115 calls on Marriott International. The Motley Fool has a disclosure policy.