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Yahoo Finance reporter Melody Hahm joins the Yahoo Finance Live panel to discuss what Airbnb CEO, Brian Chesky had to say about their recent earnings call.
AKIKO FUJITA: Shares of Airbnb up about 2 and 1/2% in the session on the back of a strong quarter. Revenue in Q1 increased 5%, with gross booking value, which, of course, tracks hosts' earnings and additional fees, gained 52% year on year. Melody Hahm here to break the numbers down for us, as well as to bring your conversation, with CEO Brian Chesky. And Melody, this was an interesting quarter that really sort of seemed to crystallize these trends that we have seen on Airbnb, which no longer is just about travel, but a lot more people spending longer periods at an Airbnb because of the way they're using these spaces.
MELODY HAHM: Exactly, Akiko. And to your point, the travel industry kind of reemerging from this hiatus of COVID has been a boon to the business. But at the same time during COVID, if you think about its counterparts like booking.com, like Expedia, which owns VRBO, they were down 44%, 50% year over year when it came to revenue. So any sort of gain that can be eked out during the pandemic is pretty impressive. And about 24% of Airbnb stays in Q1 were actually 28 days or longer. So exactly to that point, people are staying for about a month.
Brian Chesky did call out a trifecta of one-offs. And that added up to a $1.2 billion loss when it came to Q1. And I did ask him if he expects any sort of profitable quarter for the rest of this year.
BRIAN CHESKY: Gross booking values up 50%. Most of our net losses are one-time expenses, including paying off debt. Actually, we only lost $59 million in the quarter on an adjusted EBITDA basis. And we lost around a quarter of a billion dollars this time last year. In fact, we were more profitable this year than we were this time two years ago before the pandemic. So I think that what we're demonstrating is we're making metronomic improvements in our operating cost. For example, we have about the same trap that you did two years ago, 50% less marketing. So we'll continue to make progress each quarter.
MELODY HAHM: And when we think about this structural seismic shift in travel, right, some of the stats are pretty interesting. 24% of Airbnb stays are 28 days or over, which essentially means people are staying for a month at least at a home. Nights booked for domestic travel were about 80% of all stays. And half of stays booked for at least a week long. Tell me what that means and as we head into the second half of this year, if those kinds of metrics will continue to be in play.
BRIAN CHESKY: I guess, in one sense, what it means is Airbnb is no longer just a travel company. I mean, 24% of our business is not travel. Most people define travel as 28 days or less. That's almost every city defines. That's the threshold for them to collect a lot of tourist occupancy taxes. So I think that what it really means is that people are more flexible.
And I think as people are more flexible about where they travel, when they travel, I think that what it really means is that they're less tethered to any one location. And they can work, live, and travel anywhere. And if they can do that, then they can go for longer. So I think this trend, it was actually, Melody, 14% of our nights booked two years ago was longer 28 days. It's now 24%. That's a pretty big shift in two years, considering it took us about 11 or 12 years to get to the first 14%.
MELODY HAHM: Yeah, that's fascinating. You know, talking about longer stays, driveable destinations, bigger groups, and traveling with families and perhaps extended families, Airbnb had to crack down on parties last year. I remember that vividly. But as the vaccine rollout continues and restrictions do lighten up a bit, will you decide to extend that max occupancy beyond 16 people? How are you envisioning that?
BRIAN CHESKY: Not for the foreseeable future. I mean, health and safety is the most important thing. We know that we're not out of the clear. We are optimistic, though. The head of the CDC said today that if you're vaccinated, you can resume activities you were doing before the pandemic, activities like freely traveling. So we're very optimistic. But we also know that parties aren't just a health risk. They also are a neighborhood nuisance. So we want to be really good community players are all over the world.
MELODY HAHM: Neighborhood nuisance, as we know, it's been quite a headache for Airbnb to sort of clamp down on parties even before the pandemic I did ask that question because that's why VRBO, which is owned by Expedia, does have a leg up, because they do offer more capacity. So as we see these bachelor, bachelorette parties, gatherings back in full force, I think Airbnb will have to contend with that max occupancy question.
We also touched upon a couple other things, including the fact that New York is going to be coming back. He does see more activity in New York City. But he did point out that in Q1, at the very least, Hudson and the Catskills actually had more nights booked than New York City proper, again, showing the trends of going to more rural and open destinations. I want you all to catch the full interview with Airbnb CEO Brian Chesky on YahooFinance.com/presents. Thanks.