Shift to sun, ski and suburbs gives Airbnb advantage over hotels

THE CONTEXT

In 2019, about 90 per cent of Airbnb’s bookings came from leisure travels compared with about 20-30 per cent for large hotels chains, including Marriott and Hilton, that rely on business travel to grow their profits.

“Unfortunately, the hotel operators do not have as much supply in locations where people are willing to travel,” said Jamie Lane, vice president of research at AirDNA.

Lane said with mass vaccinations later in the year, the share of alternative accommodations including Airbnb will drop before continuing to grow at 2-3 per cent per year once normal travel patterns return.

THE FUNDAMENTALS

* The San Francisco-based company is expected to report gross bookings of $23.10 billion in 2020, down from about $38 billion a year earlier, according to the mean estimate of 12 analysts according to Refinitiv; gross bookings are seen rising by 50 per cent in 2021.

* Analysts’ mean estimate for Airbnb’s full-year net loss is $3.52 billion, bigger than a loss of $674.3 million a year earlier. Full-year revenue is expected to drop 32 per cent to $3.27 billion.

WALL STREET SENTIMENT

* Of 34 brokerages, 20 rate Airbnb’s stock “hold”, 12 “buy” or higher and two “sell” or lower

* Wall Street’s median 12-month price target for Airbnb is $156, about 22 per cent below its last closing price of $200.20.

* The company’s stock has nearly tripled since listing in December

(Graphic: Airbnb’s stock has nearly tripled since debut: )