The global travel boom has buoyed Airbnb's recovery from the depths of the pandemic, pushing the home-sharing giant to invest in ways to keep the momentum going.
As travelers return to cities and global urban centers, the San Francisco-based tech company is aggressively investing in expanding its roster of listings to meet demand that has so far been able to withstand macroeconomic concerns such as inflation, a potential recession or dwindling savings accounts.
One of those ways, Airbnb CEO Brian Chesky said Tuesday, is doubling down on its partnerships with some of the country's largest multifamily developers and landlords in a bid to expand the company's presence in major cities as well as make it easier for renters to list their units on the platform. Since launching the effort in November, the company — which posted its first-ever annual profit in 2022 — has teamed up with major real estate players including Greystar and Equity Residential to add apartments in more than 175 buildings, a figure Airbnb expects to continue to grow.
"This new program is something we developed because we got a lot of inbound interest from real estate developers," Chesky told analysts on the company's earnings call Tuesday to detail Airbnb's plans for future growth. "We think we'll get a lot of demand for them since landlords benefit from the exposure and they get a cut from the listings. We've developed relationships with some of the biggest landlords in the United States, and a lot of developers are now in talks with Airbnb."
Total nights booked in high-density urban areas represented more than half of the nearly 394 million nights booked in the fourth quarter last year.
Efforts to expand its reach in the global hospitality market meant the short-term rental company was able to report a profit of $1.9 billion in 2022, a signfiicant leap from the $352 million it lost the year prior. Airbnb's fourth-quarter profit was just shy of $320 million, making the period its most profitable fourth quarter in the company's decade-plus history.
Building Off A Turnaround
The global tech industry has been slogging through a severe retrenchment as a result of growing too quickly in response to pandemic-related demand that has since fallen off. Airbnb, however, is a different story.
The company already survived its own reckoning phase when the pandemic's surprise arrival dragged global travel and spending to a grinding halt. At its lowest point in 2020, Airbnb reported $335 million in revenue in the second quarter of 2020, a 72% drop compared to the same time a year earlier. It rebounded quickly in the second half of the year, and the company reported revenue of more than $1.34 billion in the third quarter and $859 million for the fourth quarter. All told, Airbnb's full-year revenue for 2020 was almost $3.4 billion, a 30% decline from 2019.
Airbnb has since used some of that pandemic-related disruption for growth, betting its "live anywhere" strategy will position it to cater to the redistribution of where people travel, work and live. What's more, it has been able to invest in attracting more hosts to the platform because of efficiency-minded changes it made several years ago.
For example, while the rest of the tech industry is now faced with steep layoffs and halted hiring plans, Airbnb's own headcount has remained largely flat for the past couple of years.
"During the height of the pandemic, we made many difficult choices to reduce our spending, making us a leaner and more focused company, and we've kept this discipline ever since," Airbnb Chief Financial Officer Dave Stephenson said on the company's latest earnings call, adding that the company has only "modestly" increased its headcount over the past couple of years, making it possible for it to shore up financial reserves and invest in other growth plans to meet ongoing demand among travelers.
The company added about 900,000 listings in 2022, excluding China, boosting its global total to 6.6 million. In a bid to boost revenue, Airbnb has been increasingly focused on adding more hosts to its platforms and finding ways to make it more attractive for renters and homeowners to list their properties on the site.
Airbnb is projecting its revenue for the first quarter of 2023 to range somewhere between $1.75 billion to $1.82 billion.