After the year most travel companies have endured, having to deal with too much demand sounds like a good problem to be facing but for Airbnb it has created an interesting challenge.
The Covid-19 pandemic is still having a residual impact on where travellers want to go. Understandably, urban locations are less popular than rural ones.
“I mean on supply and demand, really, what we're seeing, because cross-border and urban travel has not yet fully rebounded, the places that we're seeing surpluses or deficits in demand or a surplus of supply would be more urban markets,” Dave Stephenson, Airbnb chief financial offer, said on a recent earnings call.
“And where we can see some tightening of it, especially U.S. non-urban for the peak in the summer is clearly going to be the most constrained of our markets.”
One way to help with supply issues in certain markets would be to encourage more hotels or professional hosts to use the platform. While Airbnb has not necessarily been shy about this side of the business, it understandably likes to focus on the individual hosts.
Airbnb estimates that the vast majority of its hosts — 3.5 out of 4 million — are individuals but this still leaves 12.5% that aren’t and it’ll be interesting to watch this mix evolve if and when there is a leisure travel boom.
“The way we think about it is when a guest comes to Airbnb, they're looking for a place to stay. And so we don't want them to leave without having found something they want,” Brian Chesky, Airbnb CEO said on the same call.
“Typically, they come to look for individual hosts, that's what we're known for. But we want to make sure that we have professional hosts and hotels to serve those customers and to fill in our network gaps.
“So we're continuing to develop new tools and services over the coming years to continue to welcome these providers onto our platform. And I think they're going to obviously benefit from all the demand that we have.”
Airbnb Q1 2021 financial results
Airbnb saw revenue increase 5% year-over-year to $887 million a figure that exceeded its Q1 2019 levels. However, it made a $1.2 billion net loss, thanks in part to a $377 million loss related to the repayment of debt.