Shares of short-term rental platform Airbnb (ABNB 0.75%) popped today. Shares were modestly up until around 2 p.m. ET, when the pop became more pronounced. The timing of this pop coincides with a report regarding a new fee that the company is rolling out. And that's likely why Airbnb stock was up about 6% as of 3 p.m. ET.
Another fee for Airbnb?
A report from Bloomberg points out that Airbnb intends to charge a new service fee to guests starting on April 1. This will be about a 2% extra fee for cross-border bookings. In other words, if the listing is in a currency that differs from the currency used by the traveler, the fee will apply.
Airbnb says that international markets are growth opportunities and an area of focus. However, the company's international business may already be bigger than many investors realize. It doesn't break it out every quarter. But in 2022, nearly 54% of Airbnb's revenue came from listings outside the U.S.
Tacking on a 2% additional fee isn't much in isolation, but it can add up to a lot for a multibillion-dollar global business such as Airbnb.
The global push
In its report for the third quarter of 2023, Airbnb's management spent significant time highlighting its international growth. Specifically, cross-border bookings were up 17% year over year in Q3. While the company didn't specify how much money this represented, it's worth pointing out that this is what will get the extra 2% fee starting in April.
Within the next month, Airbnb is expected to report financial results for the fourth quarter of 2023. Expect management to explain in more detail its reasoning for making this change. But also expect it to report ongoing cross-border growth, considering that this is a focus area.
