This article analyzes the prosperous third quarter (Q3) of 2022 Airbnb garnered, in terms of revenue. Q3 was the most profitable quarterly era in the platform’s entire history. Through a series of research, data mining, and charts, brought to light are:
- Airbnb’s Q3 performance in 2022
- How Airbnb has boosted its performance by looking after hosts and guests
- The pieces of the revenue puzzle: Occupancy & ADR
- Global and industry growth: RevPAR increase good news for all!
- Implications for Airbnb and PMs
First, we break down a portion of Airbnb’s Q3 in 2022 performance and identify the highlights of its achievements in comparison to previous quarters. We then dive into Airbnbs two pillars of business, a subtle increase in average review score, and Airbnb’s host churn.
Subsequently, we explore how an industry-wide growth in short-term rental (STR) revenues is manifesting, how this growth fuels property manager growth, and last, answer: What does this mean for property managers?
Airbnb’s Q3 performance in 2022
Airbnb’s Q3 in 2021 was one where it experienced its highest revenue ever at $2.1 billion, surpassing Q3 levels of 2019 by 36%. Reliving its glory, its Q3 revenue of 2022 experienced a 29% increase in revenue since the previous year’s quarter with a sum of $2.9 billion. The chart below observes the course of Airbnb’s revenue quarter by quarter from Q1 of 2021 to Q3 in 2022.
In Q3 of 2022, Airbnb observed a 25% increase from the prior year in Nights and Experiences Booked, totaling 99.7 million. The company's gross booking value (GBV) amassed $15.6 billion, a 31% increase from Q3 in 2021. Finally, Airbnb's net income further supports how profitable Q3 in 2022 amounted to, having a 46% increase since the previous year's Q3. That added up to $1.2 billion. You can read more on Airbnb's quarterly financial results year over year here.
All of this success solidifies Airbnbs robust position in the STR industry and demonstrates the recovery of the industry as a whole. However, how is Airbnb continuously progressing in the past several years?
How Airbnb has boosted its performance by looking after guests and hosts
Airbnb's business relies on two promises: one made to the guest that this is where they will find the best inventory, and one made to the host that this is where they will find demand in great quantity for their properties. These keystones are at the heart of Airbnb's value proposition and ultimately justify the fees the company charges.
On the guest front, Airbnb's average review score slowly inches upward and has risen from 4.7 in 2019 to 4.8 stars in 2022.
In addition to happier guests, Airbnb is making headway on host churn. Historically, they have been trying to address a higher host churn rate than they would like. In the blue graph below, we see how Airbnb is steadily reversing this and achieving a lower rate.
Evidently, fewer Airbnb hosts are churning year on year, and guests are more satisfied.
The pieces of the revenue puzzle: Occupancy & ADR
Airbnb revenues are a percentage of all the bookings booked on the platform, so more trips fuel its growth. Furthermore, a higher daily rate for those trips also increases overall booking revenue for Airbnb and improves their profit.
Luckily for them, the monthly average for global reservations from 2019 to 2022 is gradually improving and accumulating higher and steadier numbers.
And looking at booking value, in the below graph, the majority of worldwide 2-bedroom vacation rental ADRs have increased, and have been hitting higher US Dollars in 2022 than in the previous three years.
Global and industry growth: RevPAR increase good news for all!
The above evidenced increase in demand and trip spending isn't just great news for Airbnb, but the industry as a whole. Vacation rental managers are reaping the benefits of unleashed STR demand with Revenue Per Available Rental (RevPAR) hitting new heights this summer.
Interestingly, RevPar in Italy, Greece, Great Britain, the United States, Spain, France, and Mexico have all seen significant increases in their third quarters since 2019. This means these countries' ADR and/or occupancy rates are improving.
Implications for Airbnb and PMs
“...Airbnb continues to drive growth and profitability at scale, and even with the macroeconomic certainty, we believe that we’re well positioned for the road ahead,” Airbnb co-founder and CEO Brian Chesky says in his statement regarding the Q3 success. With the coming of a softening economy, people turning to Airbnb as a supplemental income. With rise of satisfied hosts, there is an increasing number of hosts on Airbnb, he further states. You can read more on this topic here.
Ultimately, Airbnb has just witnessed the most profit it has garnered since its existence. The escalation in global reservations and higher summer RevPars reflect how the STR industry is enjoying a wave of growth and success for property managers to capitalize on. If you would like to read more about Airbnb's standing in the industry, check out articles like this one on our blog.
Moreover, exploring global trends, market evolution, and top-performing property segments by company or country is crucial. In this way, you can prioritize investments, growth, prospects, or optimize your strategy.
This kind of data can help you too! You can start free here, or book a demo to discover what Transparent can do for you.