-Written by Fernando-
Traveling is going back to normal from the rough 2 years of cautious travel and quarantine. I know $ABNB has been on a slight downwards trend when it comes to their stock price but I am very confident in this company’s potential. Airbnb is one of those companies that seems like it has just an amazing business model that both renters and guests love. The short term rentals of entire homes and other lodging options, made easy to find on their platform is a great alternative to the classic hotels. In addition, Airbnb seems like it will always be price competitive with hotels with the supply of rentals growing worldwide. Surveys suggest that price is one of the main reasons why travelers who have used both hotels and Airbnb have found better prices with Airbnb. I’ve also experienced this personally where an Airbnb is just the cheaper option despite it being much bigger and comfortable than a hotel room.
Despite them being competitive on price, hotels are still favorites in many different ways. Hotels provide loyalty programs with credit cards or memberships that provide rewards and benefits that Airbnb has not incorporated. Business traveling is where hotels still cannot be beat with 68% of business travelers saying they prefer hotels. That comes down to the convenience, amenities, provided services and easier bookings with the travelers knowing what to expect. Hotels show that about 53% of their profits come from business travel. Once Airbnb begins to focus more on bringing over business travelers, they could really skyrocket. The most likely scenario is more hotel listings on the website and some sort of loyalty program to attract frequent travelers. For online bookings, $BKNG is still the leader of the industry bringing in more revenue and more online traffic than Airbnb.
However, earnings for Airbnb have also been impressive given that they had to withstand a global pandemic that basically shut down all non-business travel. Despite a 30% drop in the stock this past year, $ABNB has seen great performance financially with revenue from bookings up 27% which is 73% higher than the bookings revenue before the pandemic. Even though the numbers are slightly short of analysts’ expectations; it is still hard to say what has affected this with countries like Japan or Australia still not fully open to tourists.
Looking past the numbers, Airbnb is still a great company. They offer a unique option for lodging any number of guests and are great at updating safety for guests and hosts. In recent news, Airbnb has been looking to incorporate some new screening tools that would help prevent unwanted parties. From what I know this has always been a major concern for many hosts and this would likely help. This is what makes them attractive to so many investors, their showing of resilience and quick adaptations to issues. The resilience during the pandemic probably comes down to the variety Airbnb has when it comes to travel accommodations and local options for people to have more simple, yet still fun, vacations.
In conclusion: Personal experience should say a lot, and with my long history of using Airbnb I have always been satisfied with my stays. I’m sure there are plenty of negative experiences but I cannot say that from my end. A long-term investment for $ABNB is definitely a comfortable move. They show great potential for the future when travel returns to its completely normal state and they are free to grow again. I feel very comfortable with Airbnb as an investment for steady long-term growth. But, as you should already know, that’s just my opinion. Please do your own DD before making any investment decisions.