The coronavirus pandemic was a significant headwind to the travel industry. According to Statista, folks spent $610 billion on hotels and resorts in 2020, down from $1.47 trillion in 2019. With that backdrop, it's no surprise that worldwide travel facilitator Airbnb (ABNB +0.94%) saw its revenue fall year over year in 2020.
Fortunately for Airbnb and its shareholders, revenue is rebounding rapidly from the lows caused by the pandemic.
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Airbnb is gaining market share
In its most recent quarter ended Dec. 31, Airbnb reported revenue of $1.5 billion. That was 38% higher than in the same quarter in 2019. Similarly, for the entire year in 2021, revenue came in at $6 billion, which was 25% higher than in 2019.
Interestingly, Airbnb's revenue is rebounding ahead of 2019 levels while the travel industry as a whole is nowhere near full recovery. According to Statista, hotel and travel spending increased to $950 billion in 2021, still far below the $1.47 trillion in 2019. That makes Airbnb's recovery look even more impressive.
The travel facilitator is thriving as the proliferation of remote working creates new travel opportunities. If you're not forced to be close to an office building in one city, you can move around more freely. This is especially true for folks who don't have kids in school. It's no surprise, then, that long-term stays are Airbnb's fastest-growing category. The company shared more details on the length of stays in its shareholder letter:
Over the last two years, we have seen the average trip length increase by approximately 15%, with stays of more than 7 days now representing nearly half of all gross nights booked. Meanwhile, long-term stays of 28 nights or more remained our fastest-growing category by trip length and accounted for 22% of gross nights booked in Q4, up 16% from Q4 2019. The longer guests stay, the more we believe they value the amenities and convenience of staying in a home.
That last point management made is a crucial competitive advantage versus traditional hotels. Airbnb offers guests the option to book homes with access to laundry rooms and kitchens, essential amenities for long-term stays. That factor helps explain why Airbnb's revenue is above pre-pandemic levels while the industry as a whole is lagging.
The omicron variant did not meaningfully hurt Airbnb
The next several quarters are likely to remain robust in revenue growth for Airbnb. Management noted that bookings for the summer travel season, typically the most popular, are up over 25% compared to the same time in 2019.
Further, gross booking value, which is reservations made but not yet used, was $11.3 billion at the end of the fourth quarter, compared to $8.5 billion at the same time in 2019. In another sign of encouraging news for shareholders, management noted that people did not cancel or decrease bookings significantly in response to the rise of the omicron variant, signaling the pandemic is having a lesser negative impact on Airbnb.
Indeed, signs point to healthy revenue growth for the rest of 2022 for Airbnb.
