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Despite the Numbers, Airbnb Is Stronger Coming Out of the Pandemic

By Brian Withers and Brian Stoffel - Updated Jun 25, 2021 at 1:43PM

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The platform is winning customers for the long term.

As the coronavirus curtailed travel, AirBnb (ABNB 1.23%) struggled as its hosts saw bookings drop precipitously. But taking a wider view of what happened to the industry over the past year, this unique travel marketplace is emerging stronger relative to its competition. On this Motley Fool Live episode recorded on May 26, Motley Fool contributor Brian Stoffel discusses the company's most recent metrics and how it's gained ground against its big-name hotel competitors.

Brian Stoffel: The first stock we're going to talk about is Airbnb ticker symbol ABNB. I'm going to compare as I go through real quick what Airbnb's first-quarter look like. I'm going to compare their numbers to 2019 instead of 2020 since it was such a bad comparison, and we forget the part of the reason is while lockdown started in the United States in March, so the end of the first quarter. Internationally, they started earlier than that and Airbnb is a very international company.

Here are the big things. Nights and experiences booked, which is just the number of nights booked at a place or an experience like a tour of something. They're 20 percent off of their 2019 highs. But gross booking volume, which is all the money that trades hands because of this, it was actually up a little bit. The reason is that the average daily rate at an Airbnb location went from $122 to $160, that's a huge jump. Looking backwards, most important thing I think to know about the company is that, they were losing more than a billion dollars over the previous 12 months at different points in 2020. But now, after such a good first quarter, they're actually free cash flow positive over the last 12 months, that's a big deal.

While I'm sure that the bump in travel that's going to happen over the coming months hopefully will be nice. That's not actually the real story to me. The real story is how the company pulled in so many different users over the last 12 months because Airbnb offered something that normal hotels didn't, which was space, unshared air particles, those types of things, and I think that once people experienced that, it makes a big difference.

Just to give you an idea, this chart right here is comparing first-quarter 2019 with first-quarter 2021. So you know what we're looking at. Marriott and Hilton, the average daily rate that people pay down about 25 percent up at Airbnb. I already talked about that. I also talked about gross booking value, which is down significantly. These players actually up a tiny bit and revenue obviously follow suit. Overall, I think that this company actually got stronger because of the pandemic, not in an absolute way, but in a relative way to the competition.

Brian Stoffel owns shares of Airbnb, Inc. Brian Withers has no position in any of the stocks mentioned. Toby Bordelon owns shares of Airbnb, Inc. and Marriott International and has the following options: short June 2021 $125 puts on Airbnb, Inc. The Motley Fool owns shares of 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.

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Stocks Mentioned

Airbnb, Inc. Stock Quote
Airbnb, Inc.
$126.04 (1.23%) $1.53
Marriott International, Inc. Stock Quote
Marriott International, Inc.
$163.18 (-0.54%) $0.89
Hilton Worldwide Holdings Inc. Stock Quote
Hilton Worldwide Holdings Inc.
$137.02 (-0.31%) $0.42

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