As more people are vaccinated against COVID-19 and the restrictions on staying at home are lifted, there are few disadvantages for online tour operators – especially if they have a certain type of inventory.
“There’s no other way than going up,” said Sucharita Kodali, an analyst at Forrester. “People will go on vacation again.”
Airbnb Inc., Booking Holding Inc. and Expedia Group Inc. reported quarterly results in the last few weeks and assessed the current situation similarly with minor deviations. Airbnb
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Chairman Brian Chesky said in the company’s call for profits last week that he expects a “travel recovery of the century”. Ticketing
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CEO Glenn Fogel is also feeling pretty good about an industry rebound. However, since vaccination rates are not the same and the company has a strong presence outside the US, he told MarketWatch in an interview earlier this month, “The recovery in the world will take years and we need to realize that. ”
The reason for the slight difference in statements made by CEOs: The recovery is far from over, and travelers currently still prefer to stay close to their home, aim for more rural destinations, and book alternative accommodations to hotel rooms. This type of activity is a short-term indicator of Airbnb and some of its competitors.
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Naved Khan, an analyst for Truist, told MarketWatch that because of the pent-up demand for travel, “this is a case of a rising tide raising all boats.” But as the pandemic continues, “consumers still prefer alternative accommodations.”
Based on the analysis of trends and searches in app usage, Truist Securities stated that the number of weekly active users of the Airbnb app increased compared to the previous quarter and that the interest in online search for Airbnb and its competitor Vrbo, owned by Expedia has gone up
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has exceeded the level of 2019 since mid-January. Both Airbnb and Vrbo mainly offer bookings for apartments and flats, unlike hotel rooms.
Based on what he sees as an ongoing preference for inventory that makes up the bulk of Airbnb’s offerings, Khan anticipates that the company’s sales in 2021 will exceed sales in 2019, while he doesn’t necessarily think so for Booking or Expedia expected.
For more: Airbnb earnings show strong sales and booking growth
Kodali agrees with this stance on Airbnb and calls the company “absolutely well positioned”.
Fogel, CEO of Booking, said his company has a wide range of alternative accommodation options in Europe, which he plans to increase in the US. “We have been doing this for a long time,” he said. “We had that before there was an Airbnb.”
He also pointed out what he sees as an advantage of Booking over Airbnb: “We don’t believe in going back and forth with the host. Once you hit Book, you’re done. You don’t have to talk about it any further. “
See: Booking revenue halved as the COVID-19 pandemic continues to affect travel
Booking and Expedia try to make sure they cover all of the basics. Expedia According to reports tries to recruit Airbnb superhosts for its Vrbo business. Expedia’s “Signs of Life” prompted Susquehanna Financial Group to increase its revenue estimate for the company by 41% in 2021 and 26% in 2022, analyst Shyam Patil wrote in a recent statement.
Read: Expedia shares rise as a result of up Street View
The next step for Airbnb and its competitors is to prepare for the surge in travel. Right now, most analysts believe that this will continue to mean mostly domestic travel as people continue to take short breaks near their home. That will change as international travel and city breaks return. The European Union announced on Thursday that it was easing restrictions on vaccinated foreigners.
“Since the city trips are coming back to life between 2021 and 2022, [Airbnb] benefits from a pretty good inventory in urban destinationss“Said Khan.
As for business travel, according to a recent American Hotel & Lodging Association survey Airbnb is not expected to recover to pre-pandemic levels until 2023 or 2024. In this regard, Airbnb could have an advantage over hotels. The company said on its call-to-win statement that in the first quarter, more than 24% of stays were longer than 28 days – meaning people may book Airbnbs and work remotely from home.
On the flip side, Khan pointed out the potential advantage hotels have over Airbnb when people travel in their free time: “Maybe you’re going to a place where you want the resort or an all-inclusive package.”
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Whatever the travel recovery, a challenge for alternative accommodation – one that primarily affects Airbnb – is regulation.
“When cities put the kibosh on the number of tenants or regulate the number of tenants to strengthen their hotel industry, that’s the bigger problem,” Kodali said.
Khan agreed, pointing out limits on short-term home rentals in places like San Francisco and New York.
“If cities, on the other hand, are looking for revenue streams, could Airbnb convince them that they are a good partner? , “he added.” May be [the pandemic and its effects on the economy] will open doors that have been partially closed. “
Despite analyst optimism about Airbnb, the company’s stock is worse than its competition as of Thursday, and its market cap is lower than Booking’s. Airbnb stock is down more than 6% since the start of the year and is down 31.9% over the past three months. (It went public in December.)
Expedia shares are up 26.6% since the start of the year and have increased 5.5% in the last three months, while Booking shares have so far increased by more than 3% this year and by 0 in the last three months .3% have risen.
