How Remote Work Could Make Airbnb an Even Bigger Winner

Over the past two years, Airbnb's (ABNB 0.64%) business has been transformed significantly. In this video clip from "The Virtual Opportunities Show" on Motley Fool Live, recorded on Feb. 8, Fool contributors Rachel Warren, Demitri Kalogeropoulos, and Jose Najarro discuss what's fueling the company's record revenue growth.

Rachel Warren: Airbnb, I love this company. I talk about it all the time. I think it's a really interesting company to consider within this broader trend of digital transformation for a few reasons. One of the things that Airbnb has noted is playing an increasing role in the company's overall revenue growth, and profitability is this trend of people not just vacationing in Airbnbs, but actually living in Airbnbs.

The CEO of Airbnb actually recently said that he is going to be living in Airbnbs around the country, and going back, and forth between his different locations, I think where he's usually based in San Francisco. One of the things that's really cool about it is, as we're seeing more people that are working remotely, and more people that are having more flexible job options, a platform like Airbnb provides a lot of flexibility for people to live and move where they want at any given time.

Another way that I think the company fits into this theme is the fact that it does provide a way not just for consumers to find cool places to live, literally almost anywhere in the world, but you have a lot of people that are making substantial income through Airbnb. Hosts usually have, I think a 3% service fee that's taken out of the total. But whether you rent out a room in your apartment or you rent out multiple locations, this can be an incredible source of side income or even someone's entire income depending on how many properties they run.

Airbnb actually just released on Feb. 3 a report saying that Airbnb hosts have earned a total of $150 billion through the platform since 2010, with $60 billion of those dollars being earned in the U.S. Just incredible opportunity for people on both sides of the relationship on this platform as a user, someone like me, who stays in Airbnb, it's an incredible opportunity to live like a local, stay in different places around the world, work remotely for extended periods of time. Then as the host, you have really unlimited ways to earn income through the platform.

Another thing that was interesting is Airbnb recently ordered a consumer survey of 7,500 people across five different countries, and nearly 2/3 of respondents said they have come to expect more flexibility from their employers, and employers around the world are taking note. The reason I mentioned all this is Airbnb is very much pushing this idea of its platform, not being just something that people think of in the context of vacation, but much more so a place where people are going to live, and to factor this into their everyday lives.

With more people going into flexible and remote living situations permanently and being able to maybe never have to go back to the office again. Airbnb reports their fourth-quarter and full-year earnings, I think later this month. But just a quick snapshot in the most recent quarter reported its third-quarter revenue of $2.2 billion, that was the most revenue the company has ever reported in its history.

That revenue was 36% higher than in the third quarter of 2019, so before the pandemic. The company also reported net income of $834 million during the three-month period, which was not only the highest quarter of revenue growth but also the most profitable quarter in its company history. That net income was actually up 213% compared to the third quarter of 2019.

Again, loving those pre-pandemic comparisons to see how much of this is normalizing from the height of the pandemic or not. Really promising company. I really love that they've shifted this view of their business model to being something that's very much part of their remote and hybrid work revolution. I'm really excited to see where it's going in the years ahead.

Demitri Kalogeropoulos: Really cool, and like you said, I think they're reporting next Wednesday or so or on the 15th maybe. Definitely, I'll be watching that because I remember the last quarter the question was, the prices have rebounded a lot obviously since the pandemic, but the actual volume hasn't quite got back into positive territory. It was close, I think it was down 7% last quarter. The price is good, 29%. It's down 7% from two years ago so haven't fully recovered in terms of their volume from 2019, but I think it's pretty clear that's going to happen this quarter. It'll be interesting to watch where they go from there. Very cool.

Jose Najarro: I noticed. I don't follow it too much, but I think it was either the last quarter or a quarter before that, they mentioned that they are seeing a nice increase of the time people rent out and I think it's a longer-term renting to some extent. I think that's also thanks to the ability of a lot of people being able to work from home, the ability to hybrid work-style. I know in my previous job when I was working from home for a bit, I actually took the Airbnb for about a month because I had the ability to do so, and I think that right now is also helping. I think I was just looking for one in some of the locations I used to go to and they're booked up like crazy at the moment.

Warren: Yeah. I know people are living in these. Those stays of 28 days or more, which is what they define as long-term stays, are increasingly accounting for more of their overall balance sheet growth, so definitely impressive and I think a good sign for the future.