Dec 2, 2021 3 min read

Airbnb stock setting the stage for the revival of travel

With the revival of travel and tourism, will Airbnb continue to deliver in 2022, or will the new covid strain hamper its growth?
Airbnb stock setting the stage for the revival of travel
Airbnb (NASDAQ: ABNB)

With a rise in the vaccination rate around the world, we are seeing lockdown restrictions loosening up, and there is optimism surrounding travel in the post-pandemic era. Airbnb (NASDAQ: ABNB) took a beating during the pandemic, but the company has bounced back. The ABNB stock is up since July and has rallied more than 9% in this quarter.

The rise in Covid cases in Europe and the US and the news of a new variant (Omicron) has some investors on edge. Last week the ABNB stock saw some declines. It went from $196 to $180. So, is ABNB stock still a buy?

Stellar Quarterly Results

Despite the impact of the pandemic, Airbnb reported a solid third quarter. It saw the highest revenue and net income ever. The sales saw a rise of 70% year over year and reached $2.23 billion. The net income increased by a whopping 280% and hit $834 million. The numbers show the strength of Airbnb and prove its worth in the travel industry.

Airbnb is a marketplace that owns no inventory; hence, the company does not have major capital expenses. It can see solid operating leverage at this stage. It is also generating positive net income and reported $1.8 billion in free cash flow in the last year.

It expects revenue in the range of $1.39 billion and $1.48 billion in the fourth quarter. Airbnb expects the high travel demand to continue in 2022, which will significantly benefit the business. The pandemic got nothing on Airbnb as it continues to grow exponentially and has become an indispensable part of the travel sector.

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Transition in the travel industry

The pandemic has led to a transformation in the travel and tourism industry. Keeping this in mind, Airbnb recently released more than 50 upgrades and innovations that make it convenient for the host to meet the current travel trends. The company has seen a rise in the number of hosts this quarter.

Plus, keeping the remote work trend in mind, the company offers longer stays of more than 28 days. It became the fastest-growing category of the company and made up 20% of the total nights booked this quarter.

The work from home phenomenal has allowed people to travel whenever they feel like it. They no longer need to wait for a long weekend to plan a holiday, and Airbnb fulfils all the needs. It offers a private space to stay with a workspace and kitchen, making it the first choice for many. Also, many travellers are not yet confident booking hotels, which is where Airbnb is winning.

International travel has now become possible, and I believe Airbnb has the right solution for travellers today. This will have an impact on the bottom line and take ABNB stock higher.

The Bottom Line on ABNB Stock

Airbnb is a solid company with massive growth potential. The fears of a new variant may add short term volatility to ABNB stock, but it is the one to own for the long term. Any dip in the stock is a solid chance to buy.

The company is already giving strong competition to hotels and has a strong presence across the globe. With unique product updates and the convenience of hosting, Airbnb has become the first choice for property owners and travellers. Revenge travel is picking up, and travellers are looking for unique stays where they can spend time with loved ones while making the most of their destination. Airbnb is present where hotels aren’t, and this gives the company an upper hand in the industry.

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Not Investment Advice
Note: Views expressed are those of the writer. The author does not own any stocks mentioned. The article is information, not advice. Share prices can rise and fall. Past returns are not a guide to the future. Please do your own research.

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