Airbnb gives strong outlook in sign US demand is picking up

"Airbnb Inc. issued a better-than-expected outlook for the holiday quarter, with a recently launched reserve now, pay later feature helping fuel demand in the US. Revenue for the three months ending Dec. 31 will be $2.66 billion to $2.72 billion, the company said in a shareholder letter on Thursday, exceeding the Bloomberg-compiled analyst average estimate of $2.67 billion. The key metric of nights and seats booked is expected to increase in the mid-single-digit range from a year earlier, Airbnb said. That was in line with analysts' estimates."

"In October, we continued to see strong demand despite more difficult year-over-year comparisons, Airbnb said in the letter. American travelers are using its reserve now, pay later feature launched in August for US rentals to book trips earlier, it added, supporting its positive outlook for the rest of the year. Shares of Airbnb rose 5.5% in extended trading after closing at $120.53. The stock had been down 8.3% so far this year."

"Airbnb's report echoes a rosy forecast provided by online travel peer Booking Holdings Inc., which cited resilient demand across all regions. And Expedia Group Inc. raised its full-year gross bookings and revenue outlook on Thursday. It also posted third-quarter results that broadly beat expectations. Even so, there are lingering concerns about the US government shutdown and its effect on travel. Planned cuts to flight capacity threaten to cause disruptions during the upcoming holiday season."

Airbnb expects revenue of $2.66 billion to $2.72 billion for the quarter ending Dec. 31 and forecasts nights and seats booked to increase in the mid-single-digit range year-over-year. A Reserve Now, Pay Later feature launched in August for US rentals is driving earlier bookings and stronger domestic travel. North American travelers accounted for about 30% of total nights booked in the third quarter, lifting reservation growth. Shares rose 5.5% in extended trading after market close. Booking Holdings and Expedia likewise reported resilient demand and raised outlooks. Persistent concerns include the US government shutdown and planned flight-capacity cuts that could disrupt holiday travel.

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