Airbnb shares soar 13% after first full-year earnings report

Airbnb shares soared 13% in Wednesday trading after the home-rental service reported its first full-year profit and forecast a 2023 travel pick-up.

The company reported that it earned $1.9 billion in 2022, compared with a loss of $352 million the year before. The fact that it made a profit was not the surprise, but the result was better than expected. Fourth-quarter earnings of $319 million were much higher than the $184 million forecast by analysts polled by Refinitiv.

But it was the company’s prediction of the strength of the travel market that was a major factor in propelling the stock. The company said it expects first-quarter revenue of between $1.75 billion and $1.82 billion, up from $1.5 billion a year earlier.

The 13% gain in midday trading put it within striking range of the stock’s best one-day gain, up 13.3% on Feb. 21, 2021. The company went public in December 2020 .

“We are excited to see continued strong demand in the first quarter of 2023,” the company said in its letter to shareholders. “We are particularly encouraged by the European guests who booked their summer travel earlier this year, the market share gains we are seeing in Latin America, as well as the continued recovery in Asia Pacific.”

Airbnb is one of the companies benefiting from the pent-up demand for travel. US airlines reported a return to profitability last year after two years of deep losses due to the pandemic. The International Air Transport Association predicts that the global airline industry will return to profitability this year.

But significantly higher costs for things like airfare, hotels and car rentals have travelers looking to save money when making travel plans. This can create more demand for products like Airbnb, where people offer their homes, or sometimes rooms in their homes, for rent.

The higher prices faced by consumers are also driving more people to look to earn extra money by renting spaces they may not have rented before, said CEO Brian Chesky.

“The supplementary income they can earn [através] of an Airbnb is often the target of criticism in difficult times,” he said of the increase in listings the site is seeing.