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Airbnb (NASDAQ: ABNB) offers a unique way to invest in the travel industry. In this clip from “3 Minute Stocks Updates” on Motley Fool Live, recorded on Feb. 16, Motley Fool contributors Toby Bordelon and Brian Feroldi talk about how Airbnb has sharply rebounded and discuss some of the lodging company’s goals for this year.
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Toby Bordelon: Let’s talk about Airbnb for a little bit, shall we? They had a solid quarter, 73.4 million nights and experiences booked for this last quarter. Over $300 million for the fiscal year, that’s up 56% year-over-year but, more importantly, only down 8% from 2019, so they’re catching up there. But the numbers beyond that look even better. Gross bookings up 91%, for the quarter up 32%, versus the same quarter 2019 to $11.3 billion. That’s great. Thirty-two percent increase from pre-pandemic levels. I love that. For the fiscal year, we’ve got gross bookings valued at about $74 billion, up 96% year-over-year and 23% from 2019. Revenue, 78% year-over-year, up 38% from two years ago. Net income. They have a positive net income of $55 million versus a loss in both 2020 and 2019 for Q4. That is really solid. Let me show you this in pictures. Let’s show this so you can see the charts here. You see here, I like the chart because it makes it very clear. Revenue for the quarter. Boom. Really nice increase from 2019 and 2020. Quarterly net income or quarterly net loss. We have a net loss two years ago. Finally, positive here. Now, this is adjusted but it’s still worth comparing for the relative aspects here. EBITDA, you said the percentage of revenue, 22%, and then we’ve got all of these losses from back in the day. Really nice what they got going on here. What do all of these numbers mean? It means they have recovered from the pandemic. I’ll just say it. We’ve still got the pandemic going on but they’ve recovered. They’re doing much better now than they were in 2019. They’re generating more revenue than they did pre-pandemic. They’re actually profitable this quarter. They were losing money pre-pandemic. I think that’s a huge win for them. They see travel is changing. They talked about that in the shareholder letter. They’re adapting to this change, making the platform more flexible for both guests and hosts and taking advantage of trends like remote work, longer-term travel. Really cool. CEO Brian Chesky is living in Airbnbs this year. Starting with Atlanta, he’s traveling around the world. He’s experiencing the product firsthand. Some more trends they talked about in their shareholder letter, rule travel is up 45%. Non-urban nights booked were up 45% versus fourth quarter of 2019. City travels are returning a little more slowly. Guests need to be planning more travel. The average stay is up 15%, the average stay length. Stays at more than seven days represent half of all gross nights booked. People are traveling for longer periods of time now. They had six million active listings at the end of 2021. Their goal for this year is to allow more people to travel and live anywhere on Airbnb. They are going to recruit more hosts. They really need to do that to grow and they are increasing service. It’s critical. That’s one of the issues they have. Unlike hotels, they outsource all of their supply to independent contractor hosts essentially and maintaining that consistent product is difficult so it’s nice to see them focusing on that service. But, I like what I see here.
Brian Feroldi: Airbnb, great to see them recovering and totally love the CEO saying he’s going to be living out of other people’s houses. I mean, no better way for a CEO to know the company’s product than actually to use it itself. But, Airbnb stock has rebounded very sharply from the lows literally just a few weeks ago. While business is looking up, this company currently trades at 20x sales and has a relatively large market cap. Are you a buyer at today’s prices?
Bordelon: I am, but in small portions. I own a little bit. I’m thinking of adding a little bit. I think it’s a great company to own if you want to invest in the travel industry. One reason I like them is because it gives you an alternative to traditional lodging companies like hotels and timeshares. It’s a different model, a very different model. You’re using third-party hosts instead of owning and managing the inventory yourself and, arguably, that price-of-sales number is justified at least to some extent because they don’t carry inventory like hotels do, so you got a little bit of a different model going on here. I would not really compare that to say Hilton (NYSE: HLT) or Marriott (NASDAQ: MAR). But, be careful here. I would not want people to get caught up in the hype of, “Oh, hot new company. Really cool. Everyone loves it.” It’s a lodging company. It’s a travel company. It’s still primarily a leisure company. That’s what they do. Don’t let yourself get distracted by a lot of the hype and forget what their actual business is and invest accordingly.
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Brian Withers has no position in any of the stocks mentioned. Toby Bordelon owns Airbnb, Inc. and Marriott International. The Motley Fool owns and recommends Airbnb, Inc. The Motley Fool recommends Marriott International and recommends the following options: long January 2023 $115 calls on Marriott International. The Motley Fool has a disclosure policy.
