8/3/20222: Travel is Back to Pre-Covid Levels
AirBnb reported record revenue and profits in Q2 2022.
AirBnb reported record revenue and profits in the second quarter. They also mentioned in the shareholder letter that the current period would produce another all-time high. On July 4th, they recorded our highest single day revenue ever, signaling the strong summer season ahead.
However, ABNB 0.00%↑ slumped after the earnings report. Despite the revenue and profits beat, nights and experiences booked in the second quarter only rose 25% to 103.7 million, missing an analyst estimate of 106 million. I thought that was very interesting and I looked into it a bit more. It seems like North America, Europe and Latin America have largely snapped back to pre-covid travel levels but Asia Pacific remained depressed due to COVID restrictions. AirBnB also closed down their China business unit in Q2 because of COVID lockdowns and operational challenges.
Overall, AirBnB had a great quarter. Most other hospitality stocks like Uber and Marriott also had a great Q2. Hospitality business is basically snapping back to their pre-covid levels . I am currently traveling and I see so much energy and crowd everywhere I go. It seems like investors remain cautious about the travel stocks though. Compared to SPY’s 7% drop, UBER 0.00%↑ and ABNB 0.00%↑ are down about 35% YTD,BKNG 0.00%↑ is down 20% YTD. Investors have been burned by the pandemic stocks and I suppose they are questioning the sustainability of this travel rebound. People did a lot of online shopping during the lockdowns but there’s only so many things people can buy. I don’t believe people can ever have too many experiences though. It’s great to be out, explore different places and gain first hand knowledge about a place. Sans another deadly COVID variant, I believe this travel rebound will last longer than investors expected.