Airbnb drops on cautious outlook as CEO says customers want ‘affordability’

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SPAIN – 2021/04/15: In this photo illustration, the Airbnb app seen displayed on a smartphone screen with the Airbnb website displayed on a laptop in the background. (Photo Illustration by Thiago Prudencio/SOPA Images/LightRocket via Getty Images)
Sopa Images | Lightrocket | Getty Images

Shares of Airbnb tumbled 10% Wednesday, a day after the company released its first-quarter report that offered slightly weaker-than-expected guidance and a cautious outlook for the current quarter.

CEO Brian Chesky told CNBC’s “Squawk on the Street” on Wednesday that Airbnb is being cautious about its second quarter because of affordability pressure it is experiencing in North America.

“With inflation, people are more focused than ever on affordability,” he said. “We’re really focused on trying to make sure prices are modulated in North America.”

Chesky expressed similar concerns about price sensitivity in North America during the quarterly call with investors Tuesday, adding that in the U.S. the lowest price offerings on the platform have the highest occupancy. He said that as Airbnb rates normalize, the company expects to see an increase in occupancy across more listings.

In its first quarter, Airbnb beat analyst estimates on the top and bottom lines, and total revenue rose 20% year over year. The company swung to a net profit of $117 million, or 18 cents per share, from a net loss of $19 million, or 3 cents per share, in the year-earlier period. The figure marks the first time Airbnb has been profitable during its first quarter on a GAAP basis.

But the home-sharing platform warned that second-quarter comparisons would be tough, saying, “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.”

Airbnb forecast second-quarter revenue between $2.35 billion and $2.45 billion. Analysts polled by Refinitiv were expecting $2.42 billion.

Analysts at Bernstein said the company posted a “solid enough” quarter despite the challenges it is anticipating in the current quarter. They maintained their outperform rating on the stock and said in a Wednesday note they see company headwinds as a “short timing effect.”

Baird analysts also said that Airbnb’s results were “generally solid” but that they were overshadowed by concerns about what could come in the second quarter.

“While we remain somewhat cautious near-term based on macro and discretionary spending risks, longer-term outlook remains bright given strength of brand, platform and management team,” the analysts wrote in a note Wednesday.

— CNBC’s Michael Bloom contributed to this report

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