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Airbnb, founded in 2008, is an online marketplace that connects people (hosts) who want to rent out their homes with people (guests) who are looking for accommodations in that locale. For hosts, through Airbnb they have an open door to earn a passive income from their property, while for the guests they have the advantage of enjoying relatively inexpensive accommodation.

The lodging company currently covers more than 100,000 cities and 220 countries worldwide. Needless to say that Airbnb was heavily impacted by the pandemic as global lockdown restrictions led the travel industry to decline in 2020. 

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As the population gets vaccinated, restrictions are being lifted and summer is coming, we could see a rebound in the leisure and travel industry like we have never seen before. According to the U.S. Travel Association, 72% of Americans are planning summer vacations or getaways. 

In fact, Airbnb is experiencing huge spikes in searches and demand after travel was taken away from consumers for a whole year.

Do you think that’s not enough? There are currently $?? ???????????????? in savings accounts, a result of stimulus checks, higher saving rates and people dumping their money from the stock. 

All of this ?????? has to go somewhere and seems to me that people will be spending most of it in a good vacation trip with the family after a year of quarantine and low enjoyment at their homes.

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Airbnb is not like a hotel and we can already see the difference. For the Q1 the Average Daily rate (average revenue earned for an occupied room) of Airbnb grew by 35% year-over-year, while Hilton Hotels dropped 23%, Marriott Hotels dropped 25% and Hyatt Hotels dropped 28%.

In my opinion this is driven by the strong brand, easy accessibility through the app and the advantage of using Airbnb for this summer. The key difference is that on Airbnb you will find private accommodations for you and your family. You can book an entire house, an apartment, even a castle or a houseboat! With people less but still concerned of the virus, there could be a massive search for private accommodations.

But what about the supply? Airbnb has 4 million hosts and 5.6 million listings and the CEO said they have been working with the hosts to make them ready as summer approaches. Personally I’ve tried to look at some places in Portugal through Airbnb and there are a lot of them already fully booked for the seasonal period. 

“Guests aren’t just traveling on Airbnb, they are living on Airbnb”. According to Airbnb, 24% of booked nights in Q1 were not for traditional travel, but for long-term stays (defined as stays of 28 days or more). In addition, during Q1 2021, 50% of nights booked were from stays of at least seven nights. This proves that the company can connect hosts and guests, providing a seamless experience.

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Among all of the peers and hotels affected by the pandemic, Airbnb was the one less affected and the one that navigated better the rough times. Given all the aspects above in the article I think that Airbnb is well positioned to thrive in the recovery world as people are getting ready to travel again.

Although it’s also important to understand the risks of investing in Airbnb, such as the valuation as many investors see it as overvalued with a P/S of 12x, the company’s gross booking value growth can disappoint (or exceed) investors expectations in the coming quarters and the sector is crowded and there are many fierce competitors, some more direct than others but we are including peers like Expedia, Booking or Google Travel.

For me it’s a company that is well-positioned to win in the coming months and years and I’ve been pleased with the experience offered by the app and hosting accommodation for a fair price. What about you, have you ever used Airbnb?

Find my profile on eToro:

?? https://www.etoro.com/people/paulogabrielsa

Thanks for reading.

Let me know what's your opinion in the comments down below.


All the best,

Paulo Sá