Airbnb, not just rentals: more revenue from services pending advertising
The group invests to diversify the offer and counteract competition. The risk of mass tourism in several cities
Key points
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On the one hand - also in the wake of the post-Cvid long wave - investments of up to 250 million to push the business forward. On the other, the expanding business. All this with - despite the company's optimism - the risks of the possible slowdown in global tourism and restrictive regulations in various cities. This is how, broadly speaking, one can describe the activity - and the context in which it is embedded - of Airbnb.
The Profit and Loss Account
The digital marketplace platform, which connects hosts (people offering accommodation or experiences) with guests (people seeking accommodation or experiences), recently released its fourth-quarter and full-year figures for 2024. The US-based group was characterised by rising revenues and profitability in the last quarter. Revenues stood at USD 2.48 billion, up 12 per cent year-on-year. Adjusted EBITDA, for its part, came in at EUR 765 million (it had been EUR 738 million a year earlier). Finally, net profit came in at 461 million, compared to a loss of 349 million in the fourth quarter of 2023 (in the latter case, however, the company had accounted for the one-off tax of around one billion). Overall, both the top line of the income statement and profitability beat consensus estimates. This was also, and above all, the consequence of the increase in bookings of nights and so-called 'experiences' (from guided tours to local cooking lessons): these - again between last October and the end of December - reached 111 million (+12% over 2023). The growth positively surprised the market, so much so that in the session following the publication of the accounts Airbnb grew by 14.2%;
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The past exercise
On closer inspection, the trend for the entire year is more articulated. 2024 turnover increased to EUR 11.2 billion (+12% year-on-year). Profitability, on the other hand, was characterised by a twofold dynamic: on the one hand, annual operating profits increased to 2.5 billion; but, on the other hand, net profit slowed to 2.7 billion (full-year 2023 had been 4.8 billion). This more 'controversial' trend was reflected in the share prices themselves. In 2024, Airbnb's stock, according to the Bloomberg terminal, reached - in March - an annual high of 168.18 dollars, only to slip to a low of 113 at the start of August. Subsequently, the shares recovered, but the result - still in 2024 - remains negative (-2.2%). Finally: since the beginning of the year - thanks to the jump following the publication of the latest quarterly report - Airbnb has risen 20.2%.
Investments
So far, some considerations regarding profit and loss figures and stock market prices. The saver's attention, however, has turned to the company's own statements on future strategies. On this front, Airbnb has indicated that it is ready to invest, in 2025, 200 - 250 million dollars for new features and services related to the social object. These are moves in respect of which, in order to better understand them, it is useful to recall the group's business model. The company, precisely, is a peer-to-peer digital marketplace and acts as an intermediary, without directly owning the accommodations or experiences offered on the platform. The group earns money, primarily, through commissions charged to both hosts and guests for each completed transaction. In addition, additional services (e.g. AirCover insurance protection) and so-called 'experiences' are offered. Finally: Airbnb manages the cash acquired through bookings, including by making financial investments.
Well: the intention is to create new services and products. In the conference call on the last quarter, the company - pointing out that the first market releases will take place in May - did not want to offer any particular indications. However, among other things, there is talk of expanding the experience sector on the one hand; and, on the other hand, of offering new services. Thus, one could think of professional flat cleaning, which can be booked on the platform; or, of establishing partnerships with local supermarkets, in order to realise general food deliveries. Not only that. Beyond the described topics, on the table - more generally - is also the possibility of introducing advertising on the platform. Precisely on this last topic, the company said that it is not a question of 'if', but of 'when'. An opportunity that could easily - is the indication - be worth a billion dollars and which, however, is not on the calendar for 2025.
Brand connect
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