Tech stocks were crushed over the past year as the pandemic boom quickly turned into a bust. Layoffs are spreading across the industry, and top tech companies are also closing offices and looking for other ways to cut spending. Meanwhile, valuations everywhere from e-commerce to software to FAANG stocks have come crashing down as growth rates slowed and guidance got dialed down.
However, one stock is bucking this trend: Airbnb (ABNB 0.10%).
The home-sharing specialist is bringing a ton of momentum into 2023 at a time when many of its peers are moving in the opposite direction. Revenue jumped 40% in 2022, and while revenue growth is expected to slow in 2023, the company is still confident in its ability to grow regardless of the macroeconomic climate. CEO Brian Chesky said the company was "stepping on the gas" with its growth plans, and management shared some key reasons why in February's earnings call.
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Host demand is strong
Some Wall Street analysts raised concerns about slowing supply growth at Airbnb, but that doesn't seem to be an issue for now.
First, management noted that supply growth accelerated from the third quarter to the fourth quarter, with listings growing 16% year over year to 6.6 million. Chesky said, "Demand drives supply." Earning supplemental income is what attracts people to hosting on Airbnb, and that income is even more valuable during tough economic times. The company also noted that single-room listings jumped 31% in the third quarter, showing that the cost-of-living crisis in much of the world was pushing more people to list spare rooms and other spaces on Airbnb.
The company also just launched Airbnb Setup, giving prospective hosts an easy way to connect with Superhosts to get assistance, which drove a 20% increase in hosts recruited through Superhosts.
Management also noted that traffic to its host landing page doubled with the help of Airbnb Setup and a new ad campaign, a clear sign of strong hosting demand.
Bookings are coming in early
In its guidance, management called out strong early bookings in Europe, a sign that travel demand remains elevated as consumers look to make up for lost time during the pandemic.
While there's still a lot of uncertainty about the travel sector this year, especially with the state of the global economy, the early booking trend seems to bode well for demand through this summer. The company also shifted its marketing budget further into the first quarter to capture some of that early demand.
Management also expressed optimism for a recovery in the Asia-Pacific region, as travel was slower to bounce back in that region due in part to COVID-19 restrictions in China.
Airbnb is hiring
At a time when many tech companies are laying off employees or pausing hiring, Airbnb is moving in the opposite direction.
Though the company has been judicious about growing its workforce since it laid off a quarter of its employees in 2020 at the height of the pandemic, it's still growing its employee base -- but with a focus on staying lean, which means headcount growth of 2%-4%.
The company has managed to grow its revenue by 75% since 2019 while cutting its total headcount by 5%, a testament to the scalability of its business model.
Chesky has said on multiple occasions that the company is committed to remaining lean, but Airbnb also teased some new products, saying the company was planning on expanding beyond the core with some big ideas for future products and services.
According to one recent report, Airbnb is considering charging hosts for additional services, including a cleaning marketplace, and connecting hosts to other vendors.
With those initiatives and strong demand growth on both the supply side and demand side, Airbnb looks well-prepared to buck the macroeconomic headwinds buffeting the tech sector and deliver solid growth in 2023.
