Specialist
Former regional leader at Airbnb Inc
Agenda
- Airbnb (NASDAQ: ABNB) GBV (gross booking volume) outlook and ADR (average daily rate) trends
- Dynamics across rural vs urban properties and professional vs private listings
- Inventory acquisition and competitive dynamics vs Vrbo (NASDAQ: EXPE) and Booking.com (NASDAQ: BKNG)
- Marketing channel mix and cost per booking implications
Questions
1.
Regional GBV [gross booking value] is the headline metric Airbnb reports, and in Q1 2022, it was talking about just over USD 17bn, up 73% vs Q1 2019. What’s your GBV growth outlook for the company, when we think about Q2 and the rest of 2022?
2.
What GBV growth rate do you think is achievable?
3.
Looking at Airbnb’s full-year 2021 numbers, ADRs [average daily rates] in the US were north of USD 220. In EMEA, it was about USD 120 and APAC was just under USD 110. I think Q1 2022 ADRs were about USD 168, and that’s obviously blended across the three regions. What’s your outlook for inflation coming through in terms of higher ADRs? Is the rate we’re seeing sustainable for the rest of 2022?
4.
Is there a general rule of thumb as to what share of nights booked in Q1 of the year represents for a company such as Airbnb? You mentioned an element of seasonality. I think it was 100 million in Q1 2022.
5.
Airbnb spoke about tracking 30% above 2019 levels for summer 2022. Obviously, we’ve not seen any cancellations yet for that, but do you view inflation or high inflation as a risk to that number?
6.
How should we think about a normalised cancellation rate for bookings and what’s the typical lead time?
7.
If ADRs in the US track as high as they are currently, do you see USD 200-230-plus as a reasonable estimate for ADRs for the remainder of 2022? Obviously, inflation is expected to continue running hot for most of the year.
8.
What is the mix between urban and vacation rentals as a percentage of nights booked on the platform? Do you think ADRs maybe dilute as more people move back towards urban destinations? How do you see that impacting the business?
9.
What share of volume would you estimate is driven by vacation rentals, entire homes vs urban? Obviously, urban took a backseat during the pandemic. Would you imagine the majority of volume is coming from vacation rentals?
10.
How much lower is an urban ADR compared whole-home vacation or rural destinations?
11.
Are single rooms much of a feature in terms of the volume of bookings on Airbnb’s platform?
12.
How has Airbnb’s take rate evolved, especially as it relates to host vs guest fees?
13.
What’s the typical occupancy a listing can expect to achieve on Airbnb? I understand the supply side is pretty tight on the company’s platform and utilisation is reasonably high.
14.
Would you expect occupancy to move higher as listings are removed from the platform, listings are curated and search is improved? That’s something Airbnb has spoken about.
15.
The Airbnb platform doesn’t make anything on the cleaning fee, does it? That goes 100% to the host?
16.
How do you think about Airbnb’s cleaning fee more generally? How far do hosts use that to avoid paying commission on the actual rate? Because I’ve used the platform and you make a booking and then the cleaning fee seems a little bit crazy.
17.
What is the average cleaning fee an Airbnb guest will pay for a stay?
18.
Is there any evidence that privately managed properties have lower ADRs than professionally managed inventory?
19.
Do you generally view professionally managed inventories as being accretive to platform economics for Airbnb? Obviously, they bring a lot of inventory, but they’re probably at a lower percentage commission, but maybe utilisation is slightly higher. Maybe they command a premium in terms of ADRs, because they have folios. Do you view a professionally managed slot as being broadly accretive or dilutive to economics in terms of profitability vs a private house?
20.
As far as I’m aware, there’s no exclusivity, is there? You don’t negotiate exclusivity in return for a lower take rate or commission if you’re a property owner, or would you consider doing that?
21.
As far as it relates to the availability of a typical listing, professionally, presumably, they’re managed to be available 365 days in the year or as close as possible?
22.
If typical occupancy is 65-70%, what share of those would you expect to be driven by Airbnb, given professional hosts are very likely to be cross-listing on Vrbo and Booking and others, and perhaps their own channels?
23.
How much does it typically cost to acquire a listing? Presumably, that would depend on how many listings the property owner or the property management company has. Are there any sensible rules of thumb as to the cost of bringing on new inventory? People talk all the time about how competitive it is to get supply.
24.
Do you see any additional incentives being applied to get hosts to join the platform? Anecdotally we’ve discussed guaranteed rental income, or rental income up front, in previous Interviews. Do you see those incentives, at least in the very popular destinations?
25.
What share of new listings on the platform could be professionally managed or professional vs single-property, private hosts? Presumably, the host-management companies have done a decent job of inserting themselves between the individual hosts and the platforms.
26.
I don’t think historically Airbnb has ever struggled on the demand side, but how do you see its customer acquisition strategy evolving? In Q3 2021, the company was still talking about 90% of traffic being organic. How might you anticipate that split trending, as GMV continues to grow?
27.
If you thought about Airbnb at a GMV scale of Booking, would you still expect it to have the 90% organic characteristic? Or would you expect the company to be leaning into more paid channels to continuing driving GMV higher? How durable do you see that 90% organic share being?
28.
Booking’s total gross bookings for Q1 2022 were around USD 27bn, so an extra USD 10bn vs Airbnb’s. Could Airbnb generate that gross bookings number with the marketing mix it has today, or do you see it needing to go into other channels to continue driving that?
29.
How would you think about sales and marketing as a percentage of Airbnb’s revenue, GBV or something similar? Are there any rules of thumb or ranges you would expect the company to stick to? I believe it’s around 22% of revenue in Q1 2022.
30.
Do you view experiences as a major business line for Airbnb, going forwards? I think it’s been stop-start on the company’s side, and obviously, the pandemic didn’t help, but could it become a significant share over time?
31.
Do you think Airbnb has pricing power to increase commissions on hosts, or might average commission trend lower as the platform professionalises? Obviously, you’ve got competition from Vrbo and Booking.
32.
Do you think Airbnb’s platform can introduce featured listings, or would that run the risk of giving the whole platform to professional hosts who are willing to pay for those listings?
Gain access to Premium Content
Submit your details to access up to 5 Forum Transcripts or to request a complimentary 48 hour week trial
The information, material and content contained in this transcript (“Content”) is for information purposes only and does not constitute advice of any type or a trade recommendation and should not form the basis of any investment decision.This transcript has been edited by Third Bridge for ease of reading. Third Bridge Group Limited and its affiliates (together “Third Bridge”) make no representation and accept no liability for the Contentor for any errors, omissions or inaccuracies in respect of it. The views of the specialist expressed in the Content are those of the specialist and they are not endorsed by, nor do they represent the opinion of, Third Bridge. Third Bridge reserves all copyright, intellectual and other property rights in the Content. Any modification, reformatting, copying, displaying, distributing, transmitting, publishing, licensing, creating derivative works from, transferring or selling any Content is strictly prohibited
