Airbnb CEO: China’s Outbound Tourism Will Surpass 2019 Levels by the End of 2024

On February 14th, Airbnb, the homestay booking platform, announced its financial performance for the fourth quarter and full year of 2023. In the fourth quarter, Airbnb’s total bookings for accommodations and experiences reached 99 million, a year-on-year increase of 12%, setting a new record high for any fourth quarter in history.

Due to stable growth in bookings and ADR (average daily rate), as well as the impact of foreign exchange factors, this company, headquartered in San Francisco, USA, achieved a fourth-quarter revenue of $2.2 billion, representing a year-on-year increase of 17%. Its net loss was $349 million, but after excluding non-recurring taxes, the adjusted net profit was $489 million.

Affected by the recovery of tourism economy after the epidemic, the growth rate of first-time bookings on this platform in the fourth quarter reached its highest level of the year. The number of downloads for Airbnb app also maintained a growing momentum, with a total number of nights booked through the app reaching 55%, an increase of 5 percentage points compared to the fourth quarter of 2022.

Not only have there been more tourists, but also an increase in the number of hosts. In this quarter, Airbnb’s global host count has exceeded 5 million. By the end of 2023, active listings will surpass 7.7 million, with a year-on-year growth of 18%. The supply in all regions is maintaining double-digit growth.

The Asia-Pacific region and Latin America saw the largest increase, with the highest growth in accommodation and experience bookings in both regions. In 2023 alone, host income on the platform exceeded $57 billion. Compared to the same period in 2022, host cancellation rates decreased by 36% in the fourth quarter of 2023.

In fact, all regions achieved year-on-year continuous growth in the fourth quarter, with accommodation and experience bookings in Latin America increasing by 22%. Mexico and Brazil continued to maintain strong momentum. In addition, Chile, Ecuador, and Peru saw more than a doubling of total booked room nights as source markets compared to the fourth quarter of 2019.

In the Asia-Pacific region specifically, there has been a 22% year-on-year increase in accommodation and experience bookings, and a nearly 30% year-on-year increase in total cross-border travel volume. Particularly driven by the recovery of Chinese outbound tourism, the number of nights booked by Chinese outbound travelers has increased by almost 90% compared to the previous year.

In the earnings conference call, Airbnb co-founder and CEO Brian Chesky mentioned that in the Asia-Pacific region, China’s outbound tourism is growing rapidly. It is expected that by the end of this year, Chinese outbound tourism (volume) will surpass the level of 2019.

Urban tourism is an important source of revenue for Airbnb. In the fourth quarter of 2023, the total number of booked nights in high-density urban destinations increased by 11% compared to the same period last year, accounting for 51% of the total booked nights, which remained stable compared to 2022 but still lower than 59% in 2019.

The platform is looking forward to the upcoming 2024 Paris Olympics, mentioning in its financial report that it has already seen growth in housing supply and demand. Currently, the booking volume for summer in Paris is more than double compared to a year ago.

But in Airbnb’s headquarters in the United States, a tightening of housing short-term rental policies implemented since September last year in New York City may have some impact on the platform.

For a long time, the New York City government has prohibited homeowners from renting their houses for less than 30 days unless the homeowner is present during the guest’s stay. Additionally, the number of guests per stay must not exceed two people. With the implementation of the new policy, the previous requirements of ‘homeowner presence’ and ‘no more than two people’ remain in effect. Landlords who repeatedly violate these rules may face fines up to $5,000. Platforms that publish related rental advertisements may face fines up to $1,500.

This also means that non-compliant listings may face delisting.

Airbnb mentioned in its financial report that since the implementation of the new regulations, more hosts have been offering accommodations for 30 days or longer, and there has been an increase in booked nights in surrounding areas compared to previous years. As of September 2023, New York City accounted for approximately 1% of Airbnb’s global revenue. Currently, no city accounts for more than 2% of Airbnb’s global revenue.

In order to seek more growth opportunities, this company is investing in untapped international markets and plans to further expand into other countries in the Latin American market. In Europe, the Middle East, and Africa regions, apart from focusing on Germany, it has also started investing in several medium-sized markets such as Switzerland, Belgium, and the Netherlands.

SEE ALSO: Airbnb to Shift Data to Chinese Competitors Ahead of Withdrawal

The expansion of Airbnb’s actions is not only limited to accommodations, but also extends to the field of artificial intelligence applications.

In November 2023, the platform acquired an AI startup called GamePlanner.AI. The latter had only 12 employees and was co-founded by Adam Cheyer, one of the developers of Apple’s voice assistant Siri. Informed sources said that the value of this transaction was slightly less than $200 million. This is also Airbnb’s first acquisition since 2019.

Regarding the reason for the acquisition, Brian Chesky has stated that generative artificial intelligence will fundamentally change the platform. He hopes to invest it in travel and hospitality services, understanding and enhancing users’ travel experiences, such as matching suitable rooms or accommodations for them.

On the day of the financial report release, Airbnb also announced a new stock repurchase plan authorizing the purchase of up to $6 billion worth of Class A common stock. In the fourth quarter, it has already repurchased $750 million worth of Class A common stock, bringing the total stock repurchases for 2023 to $2.25 billion. Since announcing its first stock repurchase plan in 2022, the company has cumulatively repurchased $3.75 billion worth of Class A common stock.

According to the data released by Airbnb, over 6 million guests made bookings on the platform during the New Year in 2024. It is expected to generate revenue of $2.03 billion to $2.07 billion in the first quarter of 2024, with a year-on-year growth of 12% to 14%.