Airbnb profit jumps, bookings slow as company nudges hosts to lower prices
Airbnb bookings rose 11%, compared with a year ago
Airbnb is adaptable to any kind of economy: CEO Brian Chesky
Airbnb co-founder and CEO Brian Chesky discusses if leisure travel can hold up in a slowing economy on 'The Claman Countdown.'
Airbnb saw a slight slowdown in the number of nights and experiences booked during the second quarter as the company nudges hosts to lower prices.
Still, the home-share platform brought in $650 million in profit, a jump of more than 70% from last summer.
Bookings rose to 115.1 million in the quarter from the 103.7 million recorded during the same period a year ago, missing analysts' expectations of 117.6 million. The figure is also down from the record high of more than 120 million nights and experiences booked during the first quarter.
ECONOMY BOOSTS DEMAND FOR AIRBNB'S APARTMENT RENTAL PROGRAM
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| ABNB | AIRBNB INC. | 138.37 | -1.30 | -0.93% |
Airbnb has been battling complaints that high cleaning fees have pushed prices closer to, or even above, hotels for short rentals.
In response, the company updated its platform to show users the total price they are paying upfront. Before committing to any booking, guests will be able to see a price breakdown of Airbnb’s service fee, discounts and taxes, the company said. They will also see cleaning fees upfront.
The company also made sure that hosts provide more "reasonable" checkout requests and that they are clearly displayed before guests book.
Airbnb had forecast that the average rates customers pay per night would fall slightly in the second quarter compared with last year. The average nightly rate rose 1% to $166 compared with the same period a year ago.
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CEO Brian Chesky said on a call with analysts that the price that customers book is lower than list prices on average.
"We do see people gravitating toward more affordable stays," Chesky said. He noted some of the modest increase over last year's average rate is due to people booking bigger homes.
A sign displaying the logo of the online lodging service Airbnb hangs outside an apartment building at the Roma neighborhood in Mexico City on February 2, 2023. (ALFREDO ESTRELLA/AFP via Getty Images / Getty Images)
The company is still trying to encourage hosts to lower their costs, saying that many are "not booked most nights."
"The big deal is that they lower the price just a little bit, they will add more bookings, more nights, and they'll end up making more money. There's a point where they lower it so much, though, that it's no longer worth their while."
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Chesky said the company made "a bunch of changes" after receiving feedback from the community last year that the platform wasn't as affordable as it used to be.
"We're still a very small player in a very large market. And I think that one of our big opportunities is to make sure we continue to be affordable," he added.
The Airbnb Inc. application is displayed on an iPhone. (Andrew Harrer/Bloomberg via Getty Images / Getty Images)
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The Associated Press contributed to this report.