Airbnb prices are surging as Americans flock to larger homes outside of cities
- Airbnb's average daily rates grew 35% in the first quarter of 2021 compared to 2020.
- Executives said more bookings for larger homes within US borders helped fuel the growth.
- The home-sharing firm's overall business still remains muted due to the pandemic.
If you're hunting for the perfect Airbnb after a year of not traveling, be prepared to shell out more than you may have planned: average daily rates are up 35% compared to the same time last year.
While gross bookings this quarter are still 21% below pre-pandemic levels, the company said Thursday it expects brighter days ahead. Airbnb has been seeing growing interest in summer travel, signaling an impending travel boom as pandemic restrictions lift and COVID-19 vaccine rollout continues.
But as travel ramps up, so too have Airbnb prices. Nightly costs averaged at about $160 a day in the first quarter of 2021, a 35% increase compared to the first quarter of 2020. Average rates were also up 13% during Q4 2020 compared to the same period in 2019 - good news as the company attempts a return to profitability.
Executives said the rise in daily rates is attributable to increasing bookings in the US, and more interest in larger homes in non-urban destinations. These are categories that already often have a higher average rate, David Stephenson, Airbnb's CFO, said at a conference call. More people also began traveling in large groups during COVID-19, which naturally lends itself to booking larger properties, and as a result, a higher average daily rate.
The platform has also seen "modest evidence" of its hosts increasing prices in segments that have been in higher demand, such as these larger homes in non-city destinations, the company said.
Thursday's pricing comments came as Airbnb reported first-quarter 2021 financials of a $1.95 loss per share, greater than Wall Street's expectation of $1.10, on $886.93 million in revenue, topping the expected $719.8 million. Airbnb also saw $10.28 billion in gross booking value during its first-quarter, a 52% increase year-over-year.
Shares rose as much as 3% in trading Friday following the release.