Airbnb lost nearly $4 billion during holiday quarter, but sales held up better than online travel rivals

Airbnb Inc., the online-lodging booking platform that executed one of the largest initial public offerings of 2020 despite operating in a pandemic-whipped travel industry, continued to hold up better than other online-travel companies in the holiday season.

Airbnb ABNB, shares gained about 2% in after-hours trading Thursday, after falling 9.1% in the regular session to close at $182.06 — the stock’s worst day since its IPO. Shares in Airbnb have at times more than tripled their IPO price of $68 since debuting in December, making it worth more than $100 billion.

The San Francisco-based company reported fourth-quarter net income of $3.89 billion, or $11.24 a share, compared with a loss of $1.34 a share in the year-ago period. The giant loss is mostly a function of the IPO forcing the company to account for years of stock grants at once; Airbnb said stock-based compensation totaled $2.9 billion. Revenue fell 22% to $859 million from $1.11 billion in the year-ago quarter.

Analysts surveyed by FactSet had forecast a loss of $8.40 a share on revenue of $739.4 million.

The company said gross bookings fell 31% in the quarter to $5.9 billion. Analysts had expected $5.19 billion, an overall decline of 35% year over year, with an even steeper drop of about 68% in the region that includes Europe. For the year, Airbnb reported gross bookings of $23.9 billion, while analysts had expected $23.14 billion.

While Airbnb suffered from the pandemic, it held up better than rival online travel sites: Booking Holdings Inc. BKNG, on Wednesday reported a fourth-quarter sales decline of 63% year over year, while Expedia Group Inc. EXPE, earlier this month reported a 67% year-over-year drop in revenue for the same quarter.

“Our performance in 2020 showed that Airbnb is resilient and inherently adaptable,” Chief Executive Brian Chesky said in the announcement. “Travel is coming back and we are laser-focused on preparing for the travel rebound.”

Airbnb posted a loss of $4.58 billion, or $16.12 a share, on revenue of $3.38 billion in 2020. Analysts had expected a full-year loss of $13.40 a share on $3.27 billion in revenue.

“At the depth of the pandemic, we forecasted our 2020 revenue could be less than half of what it was in 2019. Yet in the end, total revenue of $3.4 billion for 2020 decreased only 30% compared with $4.8 billion in 2019,” executives wrote in a letter to shareholders.

Sucharita Kodali, an analyst with Forrester, said Airbnb is well-positioned once this current wave of COVID-19 cases is over: “Most people will resume a significant part of their normalcy. You already see in a lot of other states. Even as the pandemic rages they’re moving on with their lives. You’re only going to see more of that in months to come.”

Because of the uncertainty around the travel industry and COVID-19, Airbnb executives did not offer a full 2021 forecast, and gave only slight hints at what is expected in the first quarter.

“In the near term, we anticipate that year-over-year comparisons for Nights and Experiences Booked (net of cancellations and alterations), as well as for Gross Booking Value (net of cancellations and alterations), will be volatile and unreliable measures of the steady-state growth of our business,” they wrote in the letter to shareholders. “This is due to the significant increase in cancellations that we experienced in Q1 and Q2 of 2020. For both of these metrics, we anticipate that levels in Q1 2021 will be higher than those of Q1 2020, but lower than Q1 2019.

For revenue, the year-over-year decline in Q1 2021 is expected to be less than that of Q4 2020, as we continue to see gradual improvements in guests’ willingness to book stays,” Airbnb said.

In a conference call Thursday afternoon, Chesky also made a case that a change in the normal state of travel could benefit Airbnb, as more people travel while continuing to work.

“When travel comes back, we believe it’s going to look different than before — we don’t think we’re ever going back to the world of travel in 2019, it’s going to change, it’s going to be different. And probably the biggest difference we’ve seen is flexibility,” the CEO said, while noting Airbnb was not a home for business travel in the past but could be a figure in a new form of business travel. “A world of Zoom ZM, is a world where more people can work from home, and in a world where more people have the flexibility to work from home, we’re seeing more people say they can work from any home on Airbnb.”

Shares of Airbnb have gained 43% since the company went public in December, while the S&P 500 Index SPX, has climbed 3.6% year to date.