Q3 2024 Summary
Published Feb 7, 2025, 7:58 PM UTC- Airbnb is experiencing accelerating bookings growth, with guest demand increasing throughout the quarter and across all major regions. The growth rate of Nights booked in expansion markets more than doubled that of core markets.
- Airbnb's initiatives to improve affordability and reliability are driving increased bookings and supply growth. Features like total price display, weekly and monthly discounts, and the guest favorites program have improved guest experience, leading to higher rebooking rates and supply growth exceeding demand by a couple of points.
- Airbnb plans to expand beyond its core business by launching 1-2 new businesses annually, each expected to generate $1 billion or more in incremental revenue. Starting next May, they will reimagine Airbnb experiences, positioning the company for significant future growth.
- Airbnb's supply growth is slowing due to the removal of listings not meeting quality standards, with supply growth over 10% year-over-year but down several points because of the removal of over 300,000 listings in the past two years.
- Regulatory challenges in key markets like New York City are impacting Airbnb's business, as the company navigates bans and increased regulations, which have led to decreased availability and potentially higher costs for travelers.
- Investments in new services are expected to front-run revenue, indicating that expenses will increase without immediate revenue growth, which could impact profitability in the near term.
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenue | +10% | Strong guest demand continued across regions, supported by stable or slightly increased ADR and further recovery in cross-border travel, driving higher bookings and revenue growth. |
North America | +6% | Shorter lead times and a shift toward shorter stays tempered growth, but no major trade-down behavior and continued domestic travel kept revenues positive. Proposed regulatory changes in certain states remain a key watchpoint going forward. |
EMEA | +13% | Stable year-over-year bookings, aided by event-driven demand (e.g., Olympics in Paris) and ongoing preference for non-urban destinations, lifted revenues. Further recovery in cross-border travel also supports future growth potential. |
Latin America | +12% | Domestic travel remained robust, and the region continued to expand its active listings, leading to strong Nights and Experiences Booked. This momentum highlights underpenetrated markets that could drive further gains. |
Asia Pacific | +13% | Rebounding cross-border travel, alongside recovery in underpenetrated markets, fueled booking growth. Gradual reopening of key source countries signals upside potential if international travel accelerates. |
R&D | +25% | Increased payroll and stock-based compensation for product development drove these expenses higher, reflecting Airbnb’s commitment to innovation and new offerings. The company continues to balance cost discipline with strategic investments. |
Net Income | -69% | Higher income tax expense, including deferred tax adjustments, overshadowed revenue gains. While demand fundamentals remained positive, managing tax implications and expenses will be critical for sustained profitability. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
EBITDA margin | Q4 2024 | no prior guidance | 27%-28% | no prior guidance |
| Metric | Period | Guidance | Actual | Performance |
|---|---|---|---|---|
EBITDA Margin | Q3 2024 | Minimum of 35%(FY 2024 guidance) | 41% ((1,525 + 15) / 3,732) | Beat |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
International expansion into underpenetrated markets | Frequently discussed in prior quarters (Q2: localized playbook, high growth in expansion markets ; Q1: product localization and phased approach ; Q4 2023: phased expansion, strong LATAM/Asia growth ). | Continues to be a key focus. Emphasis on localized payment methods, brand campaigns, and market-specific strategies, with particular attention to Japan and Brazil. | Consistently highlighted as a medium-term growth driver. |
Focus on supply growth and quality improvements | Strong focus in all previous calls: Q2 emphasized 8M+ active listings and cleaning up low-quality supply ; Q1 highlighted 17% supply growth, removing poor listings ; Q4 2023 saw 7.7M active listings, 5M+ hosts, and continued quality efforts. | Over 10% supply growth, removal of 300,000+ low-quality listings, cohost network launch with 20,000+ applications. | Recurring emphasis on balancing supply expansion with maintaining quality. |
Regulatory challenges in key markets | Q2 mentioned California regulations impacting GBV. No direct mentions in Q1 or Q4 [—]. | Discussed the New York ban as a “cautionary tale” and highlighted collaboration in Paris. | Ongoing but with different geographies highlighted each quarter. |
Margin compression from increased investments | Q2 guided a minimum 35% EBITDA margin with planned growth investments ; Q1 signaled balancing profitability with investments ; Q4 2023 highlighted a 35% floor allowing flexibility for international expansion and product dev. | Expected EBITDA margin of ~27–28% in Q4 2024 due to investments in product development and marketing. Some spend shifted from Q3 to Q4. | Consistently addressed, reflecting a trade-off between growth investments and profitability. |
Shortening booking lead times and demand uncertainty | Q2 saw shortened lead times particularly in July, causing uncertainty in holiday bookings. Q1 reported stable lead times. Q4 2023 noted mostly stable windows with brief softness in October. | Softness in longer lead-time bookings at the start of Q3, but normalized later. Demand accelerated through Q3. | Repeated topic; lead times tightened in Q2, then normalized by Q3. |
Expanding beyond core accommodations | Q2 detailed a co-host marketplace and a relaunch of Experiences ; Q1 introduced Icons and an AI-powered roadmap ; Q4 2023 discussed building a multi-category platform, leveraging AI. | Plans to launch 1–2 new $1B+ businesses annually, starting with adjacencies in travel. Set to relaunch Experiences in May 2025, focusing on scalability and uniqueness. | Consistent expansion theme, with a more ambitious pipeline revealed in Q3. |
Potential ADR declines from lower-priced markets | Q2 noted ADR could decrease with expansion into Latin America and Asia but remains accretive. Q1 reiterated that lower ADRs are not a concern due to strong underlying economics. No mention in Q4. | No mention in current period. | Previously mentioned, not addressed in Q3. |
Competition in core markets (especially North America) | Q2 highlighted continued market share gains and shorter booking windows. Q1 had no direct mention. In Q4 2023, Airbnb discussed taking share from hotels by leveraging unique supply. | No direct mention in Q3 about competitive pressures in North America. | Intermittently mentioned, with less emphasis in Q3. |
Leveraging AI for customer experience and efficiency | Not mentioned in Q2. Q1 detailed using generative AI for customer service, computer vision for host tools, and quick replies. Q4 2023 focused on an AI “concierge” approach and an acquisition to boost AI capabilities. | Outlined a three-phase AI strategy for customer service (handling basic FAQs, personalized help, and proactive actions). Aims to reduce phone calls in favor of AI-driven support. | Rapidly evolving topic since Q1, with deeper detail in Q3. |
Mobile app engagement as a growth driver | Q2 recorded 19% growth, 55% share. Q1 was 21% growth, 54% share. Q4 2023 saw 55% share. | Nights booked on the app increased 18% YoY, now 58% of total nights booked. | Consistent rise in app usage each quarter. |
Adding hotels to the platform to capture hotel share | Q2 acknowledged hotels could help capture share from the broader hotel market, though not top priority. No mention in Q1 or Q4. | Airbnb reiterated plans to add hotels as an alternative in tightly regulated markets like NYC. | Occasional focus; more remarks in Q2 and Q3. |
Launching 1-2 new billion-dollar businesses annually | No mention in prior calls (Q2, Q1, Q4). | Announced intention to introduce 1–2 new businesses each year that could each generate $1B+ in revenue. | Newly introduced in Q3 as a long-term expansion strategy. |
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Q4 Margin Outlook
Q: Why is Q4 EBITDA margin lower, and what's next year's investment plan?
A: The Q4 guidance implies an EBITDA margin of about 27%, down several points from last year due to increased investments in product development and marketing. For 2025, we'll continue to invest in growth initiatives like core optimizations, global market expansions, and new products. While our core business becomes more efficient, we'll invest in greater service levels and launch new offerings with our spring release. -
Supply Growth and Quality
Q: How are supply growth and quality initiatives impacting the business?
A: Our supply continues to grow strongly, with over 10% year-over-year increase in Q3, although down several points due to removals. We're focused on raising the quality bar by introducing Guest Favorites and removing over 300,000 listings that didn't meet expectations. These initiatives have led to higher ratings, lower incident rates, and fewer customer service contacts. -
Long-Term Growth Algorithm
Q: What's the long-term growth plan for the core business and new verticals?
A: We're focusing on core optimizations, global market expansions, and launching new products and services to drive long-term growth. Our core business could get to 1 billion nights a year by improving quality, affordability, and usability. We'll also expand into new areas beyond travel, launching one to two new businesses each year that could generate over $1 billion in revenue. -
Attracting Next Billion Guests
Q: What investments will attract the next billion guests?
A: We'll invest in enhancing our core business by increasing quality, affordability, and usability. Expanding into global markets like Mexico, Brazil, Germany, Italy, Spain, Korea, Japan, India, and China presents huge opportunities. We'll also expand beyond accommodations into new products and services, aiming to launch one to two new businesses annually. -
Expansion Markets
Q: Which are the key expansion markets, and what's their growth impact?
A: Our core markets represent about 75% of gross booking value. Expansion markets like Brazil and Japan are significant opportunities. In Brazil, our initiatives tripled destination nights compared to pre-pandemic levels. We'll continue to scale these markets, which currently account for about 15% of the remainder, to contribute more significantly to global growth. -
Affordability and Quality Initiatives
Q: How are affordability and quality initiatives driving bookings?
A: We've implemented total price display, leading to over 300,000 listings reducing or removing cleaning fees. Introduced discounts, with two-thirds of hosts offering them. We've highlighted 2 million Guest Favorites listings, leading to 200 million nights booked. Removed over 300,000 listings not meeting quality standards. These efforts have kept Airbnb prices stable while hotel prices have risen. -
New Services Revenue Impact
Q: Will new services drive revenue growth next year?
A: We'll be aggressive in launching new offerings in over 100 cities. There will be some incremental revenue next year, but we see these as multi-year journeys with a five-year horizon to reach scale. Investments will precede revenue, with expenses appearing at the beginning of the year. -
Experiences Offering
Q: What's the plan for expanding and scaling the Experiences offering?
A: We can offer something unique and scalable without significant capital investment. We'll position Experiences first to travelers but also for locals, increasing engagement and frequency of use. Investments in technology are mostly already made, and we'll market all offerings under one brand. -
Regulatory Challenges and Hotels
Q: How are regulatory challenges like NYC impacting strategy, and will you lean into hotels?
A: In cities with strict regulations like New York City, we're focused on working with authorities to find solutions. We've seen positive outcomes in Paris, where Airbnb helped accommodate 700,000 guests during the Olympics. We're optimistic about a path forward in NYC and are adding more hotels to Airbnb, as hotels don't have to lose for Airbnb to win.