Airbnb is reporting a 5% uptick in revenue in its second-ever earnings report since listing on the public markets in December 2020.
For the first quarter of 2021, revenue was $887 million, a figure higher than Q1 2020 revenue of $842 million as well as Q1 2019 revenue of $839 million.
Airbnb says the revenue increase was driven by strength in North America and higher average daily rates during the quarter. Comparatively, in the same period last year, revenue was significantly impacted by the cost of cancellations related to COVID-19.
"We sharpened our business on our core bus of hosting and got back to our roots," Airbnb co-founder and CEO Brian Chesky said in an earnings call with analysts. "We emerged as a stronger and more efficient company. Our business rebounded faster than anyone expected."
Nights and Experiences booked for the quarter totaled 64.4 million, up 13% year-over-year. In Q4 2020, nights and Experiences booked on Airbnb totaled 46.3 million.
Gross booking value - which represents the dollar value of bookings on the platform in a period and is inclusive of host earnings, service fees, cleaning fees and taxes, net of cancellations and alterations - grew 52% year-over-year to $10.3 billion.
North America has been Airbnb's strongest region during the pandemic, with nights booked increasing slightly above the level achieved in the same period of 2019. In EMEA, business was significantly impacted in Q4 2020 but saw steady improvement in Q1 2021.
Net loss for the quarter swelled to $1.2 billion. Airbnb attributes a loss of $782 million to “significant items,” including a $377 million loss related to the repayment of term loans, a $292 million non-cash mark-to-market adjustment for warrants and a $113 million expense related to a lease no longer deemed necessary.
Adjusted EBITDA for Q1 2021 materially improved due to a reduction in operating expenses and was a loss of $59 million compared to a loss of $334 million in Q1 2020.
Operating expenses in Q1 2021 included the impact of $229 million of stock-based compensation expense, which is excluded from adjusted EBITDA. Excluding the impact of stock-based compensation expense and a reduction in reserve for certain lodging taxes recorded in Q1 2020, operating expenses declined on a year-over-year basis in all categories.
Sales and marketing expense for the quarter decreased by 28% year-over-year to $229 million, primarily due to a decrease in performance marketing expenses. Airbnb says its strategy is to increase brand marketing and “use the strength of our brand to attract more guests via direct or unpaid channels.”
Airbnb attributes its financial performance to a number of trends, including people's comfortability traveling as the vaccine rollout continues and restrictions ease.
People are also traveling differently: Nearly a quarter (24%) of nights booked prior to cancellations and alterations in Q1 were for long-term stays, defined as stays of 28 days or more, compared to 14% in 2019. Fifty percent of nights booked in the quarter were from stays of at least seven nights.
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Airbnb says it is also seeing supply increase in popular regions, with active listings in non-urban areas increasing almost 30% in Q1 2021 compared to the same period in 2019.
Overall, the number of active listings and Experiences was consistent with Q4 2020.
Looking ahead into 2021, Chesky said Airbnb is preparing for the "travel rebound of the century," and its plan is to perfect “our existing product by improving the entire end-to-end experience of our core service for both hosts and guests.”
Its focus is on the following areas: Educating consumers about Airbnb hosting, recruiting more hosts to the platform, simplifying the guest journey and delivering world-class service.
In February of this year, Airbnb launched its first large-scale marketing campaign in five years targeted to hosts. The campaign launched on TV and digital channels in the United States, France, the United Kingdom, Canada and Australia and will be expanded to Italy and Spain in Q2.
The company says that, while still early, the campaign has been “well-received” and has driven an increase in visitors to Airbnb and an increase in the number of people making their first booking on Airbnb. Based on survey data, the campaign “is driving meaningful increases in guest favorability towards our brand.”
The campaign has also drawn an increase in traffic of prospective hosts in the markets where it launched. For new listings that were both activated and booked in Q1 2021, 50% received a reservation within four days of activation, and 75% received a reservation within 12 days.
Airbnb will be announcing new measures to make it easier for hosts to sign up, as well as new platform innovations, at an event on May 24.