What happened
Shares of Airbnb (ABNB -0.89%) were among the market winners last month, finishing up 13% according to data from S&P Global Market Intelligence.
There wasn't any major news that pushed Airbnb shares higher, but several different items contributed to the gains. Like other growth stocks, Airbnb fell through the first week of the month on broader fears about the economy, but the travel stock rebounded strongly through the second half of March.
So what
Russia's invasion of Ukraine generally sent travel stocks falling, even though neither of those countries is a major travel destination. However, the war has brought into view some features of Airbnb. First, the company set a goal of hosting 100,000 refugees from Ukraine. Airbnb has used its platform to help people in other emergency situations; for instance, connecting health workers with hosts during the pandemic. No other platform has the number of hosts that Airbnb does, and its mission also separates it from more conventional travel booking sites like Booking Holdings.
Image source: Airbnb.
Airbnb was also surprised to find that its site was being used to give charitable donations to Ukrainian hosts as a way of showing support, another way in which Airbnb can connect people.
As the market settled down in the second week of March, Airbnb stock began to recover, boosted by the end of mask mandates in several states as COVID-19 case rates continued to fall, a bullish signal for the travel market heading into the peak summer season.
Additionally, unlike most growth stocks, Airbnb could actually benefit from higher interest rates, as the company collects interest on the cash it holds in between when bookings are made and when they are paid out.
Now what
Airbnb is also different from most growth stocks in another way. While most tech stocks benefited from the pandemic, Airbnb, like the rest of the travel industry, was negatively impacted by it. However, Airbnb outperformed the rest of the travel industry thanks to the flexibility of the model, and the company looks poised to thrive in 2022 as long as there isn't another wave of coronavirus.
Looking ahead, management has said it's encouraged by what it's seeing in the travel market; it expects to post a new record in nights and experiences booked in the first quarter, a category that lagged behind its recovery in revenue and gross booking value.
Given its competitive advantage and the recovery in the travel industry, Airbnb looks poised to continue making gains this year.
