Airbnb’s net income in the second quarter saw a considerable growth to $650 million, from $379 million in Q2 2022, aided by robust bookings for summer vacation rentals. The net income margin for the quarter was 26%, up from 18% in Q2 2022 and the highest Q2 ever, the home rental company said in a statement.
ADR rose only 1% from Q2 2022 to stand at $166. Shifts in ADR remained stable on a YOY basis, as increases in prices listed by hosts were offset by guests willing to pay and mix change into urban and some destinations that usually have lower ADR.
Demonstrating a continued robust travel demand, revenue rose 18% to $2.5 billion, up from $2.1 billion in the corresponding quarter last year. Gross bookings increased 13% to $19.1 billion.
The adjusted EBITDA rose to $819 million from $711 million in Q2 2022. Compared to 34% in Q2 2022, the adjusted EBITDA margin during the quarter under review was 33%.
A total of 115.1 million nights were booked using the platform in Q2, rising 11% from the previous year, but the slowest pace of growth since the shutdowns during the pandemic, the San Francisco-based company said.
The company saw improved YOY nights and experienced booked growth, from 10% in April to 15% in June. Nights booked across North America saw better YOY comparisons during the quarter, while EMEA saw a recovery in June following “challenging holiday comparisons in May.”
There were more first-time bookers in this quarter compared to last year, Airbnb said, adding that there had been over 1.5 arrivals since founding the company.
Cities and urban destinations have historically been Airbnb’s strongest areas of business. Travelers have been returning to cities, as seen in the previous quarters. Gross nights booked in high-density urban areas accounted for 45% of total gross nights booked, up from 43% in Q2 2022 but still below 50% in Q2 2019.
Active listings in the second quarter saw a 19% increase YOY, growing strongly across all regions, market types and price points. The company said it added more net active listings than in any other quarter in its history to stand at a total of more than 7 million active listings.
Cross-border nights booked improved by 16% in Q2 2023 relative to last year. Cross-border travel to Asia Pacific surged more than 80% this quarter from the same period last year, while cross-border travel to North America increased by 20%.
More number of guests returned to cities, with high-density urban nights booked witnessing a 13% increase this quarter.
As part of its international expansion strategy, Airbnb prioritized several markets, like Germany and Brazil, where its presence was not as strong. In Q2 2023, both these markets continued their growth, with gross nights booked on an origin basis skyrocketing 110% in Brazil and 63% in Germany compared to the same period in 2019.
Supply exceeds demand in the Asia Pacific (except China), the company noted, which is still below the 2019 levels. Despite significantly expanding its footprint in South Korea and Japan since 2019, Airbnb still constitutes a small portion of the overall lodging industry in these two countries.
In the third quarter, Airbnb expects revenue to stand at $3.3 billion to $3.4 billion, representing a YOY growth of around 14-18%. The company also expects a modest, sequential increase in the YOY growth rate of nights and experiences booked from Q2 2023 to Q3 2023.
The company anticipates record adjusted EBITDA in the third quarter on a nominal basis and an adjusted EBITDA margin surpassing Q3 2022. For the full year 2023, Airbnb estimates adjusted EBITDA margin to be modestly higher than the full year 2022.