Airbnb financial report breaks new records in Q1 2023: Highlights

In addition to this, Airbnb laid out for us their blueprint for maintaining and expanding this growth with new priorities. In this article, Lighthouse reports on Airbnb’s key financial measures and highlights for the first quarter of 2023 using the Q1 Airbnb Shareholders Letter and earnings call  with VP of Finance Ellie Mertz and CEO Brian Chesky.

Airbnbs Q1 2023 performance highlights

Nights and experiences booked in Q1 broke the record this year at over 120 million nights and experiences. This aided in driving revenue which amounted to $1.8 billion (€1.65 bn), a growth of 20% over Q1 2022.

Another great feat is Net income. $117 million (€107 mil)– serves as Airbnb's first profitable Q1 on a GAAP basis. Last year, Q1 2022, Airbnb faced a net loss of $19 million (€17.5 mil). Through “revenue growth, expense discipline and interest income” they overcame this. Further, Airbnb states that since the pandemic they are double the size on both a GBV and revenue basis with considerably higher yields. 

Consequently, Q1 Free Cash Flow was Airbnbs highest this year and totaled $1.6 billion (€1.47 bn)– up $400 million (€367 mil) from last Q1. This was as a result of revenue &  bookings growth, and net margin expansion. On a trailing 12-month basis, this number totaled $3.8 billion (€3.5 bn).

How Airbnb has maintained growth and will continue to grow through 2023

Growth in these arenas is due to many factors according to Airbnb. Here we aggregated several influences from both the shareholder letter and interview with Airbnb leaders:

• Guests are travelling using the Airbnb platform more than ever. Airbnb is seeing their highest number of active bookers– with a current backlog of nights 25% stronger than a year ago.

• More guests are travelling overseas and repeating their travels. Cross-border nights booked are up by 36% since last year. Notably Asia Pacific regions are experiencing recovery in nights booked (up 40% YoY) and international travel (160% compared to Q1 2022). In North America cross-border nights booked experienced a 34% YoY growth. 

High-density urban nights were up by 20% as more guests are travelling to cities.  The Lighthouse Vacation Rental Data Tracker also suggests a slightly higher global proportion of guests booking in Urban areas.

The length of stay is increasing on the platform. Long term stays of 28+ days were 18% of the total gross nights booked this quarter– sparking new use cases in the industry.

• Urban and non-urban supply both grew by 18%. All regions and market types saw double-digit supply growth– North America and Latin America the fastest. 

Airbnb Rooms were introduced on May 3rd – being and continuing to be an affordable way to travel. On average, the price is $67 a night, with 80%+ being less than $100.

Taking into consideration the above, Airbnb clearly states they are focusing on three strategic priorities in order to maintain this growth.

• First is to make hosting mainstream by raising awareness around hosting, making the process easier, and developing better host tools. 

• Second is perfecting their core service by introducing new features and upgrades. As part of Airbnbs 2023 summer release, they have already launched 50 based on direct host and guest feedback. 

• Last, they are laying foundations for products and services they plan to launch in the years to come– some as soon as 2024. A part of this goal includes focusing on less mature markets where the platform is under-penetrated– and claim to see good results already at this point in time.

Revenue puzzle pieces: Occupancy & ADR

Airbnb revenues are a percentage of all the bookings booked on the platform. This means more trips fuel its growth. Encouragingly the monthly average for global reservations in 2023 is gradually improving over the last several years.

And looking at booking value, in the graph below, the majority of worldwide 2-bedroom vacation rental ADRs have steadily increased. In fact, they hit higher prices in 2023 than in the previous four years.

Implications for Airbnb & PMs

In response to a question in the earnings call on how Airbnb balances their efforts to continue to increase supply making it easier for supply to join while redistributing demand to available supply, Brian Chesky states:  

“I think part of our secret sauce is our ability to really try to elegantly balance supply and demand. One of the great things we've seen is the marketplace has a natural equilibrium that it finds in itself, for example, the fastest-growing markets of supply also turn out to be the fastest-growing markets for demand. So, demand creates supply.” 

Ultimately, Airbnb has achieved many milestones Q1 2023 continuing to drive growth and profitability at scale, making the right decisions to expand its success. Moreover, exploring global trends, market evolution, and top-performing property segments by company or country is crucial to your business decisions. In this way, you can prioritize investments, growth, prospects, or optimize your strategy. 

This kind of data can help you too! Book a demo to discover what Lighthouse can do for you.