Airbnb on Tuesday forecast third-quarter revenue that fell short of estimates and warned of shorter booking windows, suggesting travelers were waiting until the last minute to book because of economic uncertainty, sending its shares down 15% after the bell.
Domestic travel in the United States has been under pressure since the start of the year as more Americans are cautious about their travel spending due to concerns about the health of the U.S. economy.
San Francisco-based Airbnb reported quarterly profit of $555 million, or 86 cents a share, compared with $650 million, or 98 cents a share, last year.
According to LSEG data, the group expects its third-quarter revenue to be between $3.67 billion and $3.73 billion, below analysts’ estimate of $3.84 billion.
The company expects moderate growth in room nights booked in the third quarter and said it is experiencing shorter booking times globally.
Booking window is an important indicator in the travel industry and refers to the number of days between the booking date and actual arrival. A shorter booking window may indicate that consumers are booking their travel at the last minute, due to increased uncertainty and increased caution in their spending.
There have been several periods of volatility over the past two years when consumers were hesitant to book far in advance, the company said on a conference call with investors.
Travel booking provider Booking also said earlier this month that turnaround times declined in the second quarter and are expected to decline further in the third.
“The projected slowdown in the third quarter echoes what others have noted in the travel sector,” said Dan Wasiolek, an equity analyst at Morningstar. “Airbnb is not immune to a slowdown in travel demand, but it remains a well-positioned brand for the long term.”
Airbnb’s average daily rate, or cost per night, rose about 2% to $169.53 in the reported quarter. The vacation rental company expects the average nightly rate to increase modestly in the third quarter.
Net profit margin, or the profit the company makes for every dollar of revenue it generates, fell to 20% in the second quarter from 26% a year ago.
Room nights and experiences booked reached 125.1 million, up 9% from last year. Globally, room nights and experiences booked in Latin America and Asia Pacific saw the strongest growth, up 17% and 19% respectively.
Total revenue for the quarter ended June 30 was $2.75 billion, up 11% from a year earlier.
