Excerpt from PhocusWire

Airbnb is reporting its strongest quarter ever in the third quarter of 2021, with revenue topping $2.2 billion – a 36% jump over the same pre-pandemic period in 2019.

The revenue figure also beats Q3 2020 revenue of $1.3 billion by nearly 70% year-over-year.

According to the home-share giant’s latest earnings report, year-over-two-year revenue growth more than tripled from 10% in Q2 2021 to 36% in Q3 2021. The company attributes the sequential acceleration to continued strength in the North America, EMEA and Latin America regions, as well as high average daily rates (ADRs).

Airbnb’s net income for the quarter ending September 30, 2021, was nearly 4x that of a year ago, notching $834 million and marking its most profitable quarter ever. Net income for Q3 2021 was an improvement of $615 million – or 280% - compared to Q3 2020 and $567 million, or 213%, compared to Q3 2019.

Q3 adjusted EBITDA surpassed $1 billion for the first time, doubling from $501 million in Q3 2020 and more than tripling from $314 million during the same period in 2019.

In Q3 2021, nights and Experiences booked on the platform grew 29% year-over-year to 79.7 million.

Gross booking value - defined as nights booked prior to cancellations and alterations – for Q3 2021 was $11.9 billion, up 48% compared to the same period in 2019.

However, global cancellations remained higher than 2019 levels.

According to Airbnb, guests have used its “I’m Flexible” feature, introduced in May of this year as part of a 100-plus product refresh, more than 500 million times since it launched.

In a call with analysts, Airbnb co-founder and CEO Brian Chesky says that due to the popularity of the feature, Airbnb will continue to invest in it moving forward. To that end, four new categories will be added to feature, and the ability to search by flexible dates will expand from six months to 12 months out.

With "I'm Flexible," Chesky says conversion rates are up because travelers are more likely to find a suitable property, and it helps point demand to where there’s supply.

“There’s a new paradigm in travel, and this flexibility is here to stay,” Chesky says. “Down the road this will be a major way people are searching on Airbnb.”

Hotels and Experiences

As for investment in areas outside of Airbnb’s core Homes category, such as hotels and transportation, which was scaled back amid the pandemic, Chesky says “it’s really just a matter of prioritization and right now we are focused on the most perishable opportunities.”

He says Airbnb is continuing to invest in HotelTonight, which has been “growing steadily” over the past couple of years, but “it’s not as big of a priority as our core business of supporting individual hosts.”

As for its Experiences category, Chesky says he is “bullish” on the product and expects it to be a key area of growth over the next five years.

In addition to the more than 100 platform updates launched earlier this year, Airbnb will be rolling out 50 more in an announcement coming on November 9.

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