To The Moon

With discretionary travel spending proving robust in the last quarter's CPI reports, Travel companies performes good recently.

$Airbnb, Inc.(ABNB)$ has recorded the best performance since the pandemic in 22Q4, with an annual profit of 1.9 billion US dollars, which is the first profitable year since listing. At the same time, the performance guidance for 23Q1 was raised nearly 25%, exceeding market expectations, a 10% surge after hours.

Q4 Earning Summary

• Revenue 1.902 billion US dollars, YOY 24%, and 31% YOY currency adjusted, beat market expectations of 1.86 billion US dollars;
• Net income 319 million US dollars, YOY 480%, setting a record for the net profit in the fourth quarter of the company's history;
• EBITDA $506 million, compared with $333 million in the same period last year;
• Diluted EPS was 0.48 US dollars, higher than the market expectation of 0.25 US dollars and higher than 0.08 US dollars in the same period last year;
• Free cash flow was 455 million US dollars, compared with 378 million US dollars in the same period last year, which was also higher than the expected 236 million US dollars;
• In terms of operation, the "Nights and Experiences Booked" of short rent B&B reached 88.2 million, up 20% year-on-year.
• Total booking value GBV was 13.5 billion US dollars, a year-on-year increase of 20%;
• Total booking value of each overnight and experience booking was 152.81 US dollars, down 1% year-on-year, but higher than the market expectation of 151.26 US dollars;
• Net Take-Rate reached 14.1%, beat consensus of 13.7%.

Company raised Q1 revenue guidance to between US $1.75 billion and US $1.82 billion, up 16% to 21% far exceeding the median market consensus of US $1.69 billion.

However, the company also predicts that the downward pressure on the average house price per night will be increasing in 2023. Except US and EU, More relatively cheaper destinations will be open for bookings in 2023, and the increase in bookings and the newly introduced marketing discounts will drive down the average price per night.

The rebound of travel tourism is the direct driving force of Airbnb's strong performance. In Q4 2022, cross-border travel increased by 49% year-on-year, and people's stay time in "high-density urban areas" increased by 22%. At the same time, the recovery of European tourism in 2023 will promote the year-on-year increase of Q1 performance.

We believe ,

Airbnb's growth benefits from the recovery of travel, and also the result of housing pricing inflation

1. More landlords are willing to take chances on Airbnb;

2. More people are taking longer leases.

Due to the continuous inflation, especially the inflation in the housing sector remains at a relatively high level, coupled with the continuous interest rate hike by the Federal Reserve, the pressure on landlords in the United States has increased. The newly joined Airbnb landlord has greatly increased the overall housing supply of the platform, with Q4 increasing by 23% year-on-year to 1.4 million units. This trend is not only in the United States, but also in the whole world.

In addition, the long-term accommodation of the platform for more than 28 days has stabilized at 20% of its booking volume, people are staying longer in Airbnb.

At the same time, more travel and travel plans have normalized the demand for accommodation in different places.

This is also the Airbnb platform, compared with traditional OTA platforms, such as$Booking Holdings(BKNG)$$Expedia(EXPE)$In different places, the latter prefers online air ticket hotel booking, while the homestay part is still Airbnb's larger scale.

Expedia reported last week that although its total booking volume was 17% year-on-year to $20.5 billion, it fell short of the market expectation of $21.1 billion. Therefore, its revenue and profit were worse than market expectations, and it also fell by 8% that day.