Airbnb (ABNB -1.68%) used to be a place you would go to for a quick getaway and recharge for a few days, but not anymore. The short-term rental site is increasingly becoming the go-to destination for extended-stay travel, and it's generating excess profits for the business.

The hospitality stock reported fourth-quarter revenue and earnings that handily surpassed Wall Street expectations, and the outlook for the coming year is even brighter than before.

Two adults and two kids in a pool.

Image source: Getty Images.

Come in and stay awhile

The pandemic seems to have changed everything. With tens of thousands (millions?) of people quitting their job -- the so-called Great Resignation -- that's made it difficult for retailers and others to staff their businesses. And how people are traveling is being transformed as well.

In its letter to shareholders for the fourth quarter of 2021, Airbnb said, "Nearly two years into the pandemic, it's now clear that we are undergoing the biggest change to travel since the advent of commercial flying...people are spreading out to thousands of towns and cities, staying for weeks, months, or even entire seasons at a time."

This is altering how people view and use Airbnb as well as how the travel rental site sees itself. Almost half of the nights booked in the fourth quarter were for stays of a week or longer, some 20% booked for stays of a month or longer, and nearly 175,000 travelers booked stays for three months or longer.

Airbnb was already recruiting hosts to sign up for its extended-stay program, and now it's going to kick that effort into overdrive.

Family with luggage at the airport.

Image source: Getty Images.

Record results, with more to come

Airbnb reported revenue of $1.53 billion in the quarter, up 78% from the year-ago period and generating record quarterly earnings of $55 million, or $0.08 per share. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $333 million was also the most ever recorded, and the results far exceeded analyst forecasts of $1.45 billion in revenue and $0.04 per share in earnings.

It now expects first-quarter revenue to be in the range of $1.41 billion to $1.48 billion, while Wall Street's consensus estimate was for revenue of $1.24 billion. Two years after the pandemic, Airbnb has had its best year ever across virtually all the metrics it tracks, and it expects 2022 will exceed that too.

Adults and children walking into house with for rent sign.

Image source: Getty Images.

Extended stays are the future

The percentage of active listings accepting long-term rentals, or stays of 28 days or more, is now over 90%, and Airbnb had over 6 million active rentals at the end of the fourth quarter.

But that's not enough -- Airbnb wants more people to sign up as hosts. It launched a new marketing campaign during the quarter, and traffic to the hosting landing page increased nearly 40% compared to two years ago.

Part of the allure will be free insurance coverage for up to $1 million in liability protection and $1 million in damage protection as well as Airbnb covering the costs of pet damage, deep cleaning, and more.

That, of course, has also been part of the allure in investing in Airbnb. Its asset-lite business model, where it charges guests for those services it offers to hosts, has made it a risk-free benefit. It helps allow Airbnb to generate significant free cash flow, or the money that's left after it pays all its bills. Last year, it produced $2.2 billion in free cash flow -- a record high.

Putting down roots

It's still a dicey proposition forecasting how business will pan out this year as the world continues to loosen its restraints on people and travel as the coronavirus pandemic starts to wane. However, Airbnb suggests looking at 2019 rather than 2021, as last year it grew in fits and starts, underperforming in some periods and outperforming in others.

A return to normalcy is a welcome reprieve for tourists, travelers, and Airbnb, but it looks like the growing extended-stay nature of the company's operations indicate investors might want to stay awhile too.