Airbnb (NASDAQ:ABNB) has forecasted upbeat revenue for the third quarter, surpassing market expectations. Despite this positive outlook, concerns over softening U.S. domestic demand have caused the vacation rental firm’s shares to decline by 1.2% during after-hours trading.
The San Francisco-based company projects its quarterly revenue to be between $3.3 billion and $3.4 billion, outpacing analysts’ average estimate of $3.22 billion, as reported by Refinitiv data.
Airbnb anticipates benefiting from a rebound in both urban and international travel. However, firms heavily reliant on U.S. exposure are witnessing a decline in domestic business as more consumers opt for vacations abroad.
A majority of Airbnb’s revenue comes from outside the United States, and the company observed a 16% rise in global cross-border bookings in the second quarter compared to the previous year. Furthermore, the number of guests returning to cities increased, with urban nights booked experiencing a 13% year-on-year growth.
“We continue to see signs of travelers returning to cities, historically one of the strongest areas of our business,” said the company in a statement.
Despite these positive trends, the average daily rate (ADR) worldwide only saw a marginal 1% increase, reaching $166. Airbnb acknowledges this and aims to moderate price hikes for consumers, particularly as daily rates in North America declined by 1%.
According to analysts, the demand for domestic hotels in the United States has remained flat as pandemic restrictions ease, and a strong U.S. dollar encourages consumers to book international flights and stays.
However, Airbnb, which has a significant presence in cities, reported an acceleration in the total growth of nights booked from the first to the second quarter in North America.
“I think that was telling, just the strength and resiliency of the North American consumer, and we’re continuing to see that strength lead into Q3,” stated Airbnb CFO David Stephenson during an investor call.
For the second quarter, Airbnb’s (NASDAQ:ABNB) revenue rose by 18.1% to $2.48 billion, surpassing analysts’ estimates of $2.42 billion. Gross bookings also saw a 13% increase, reaching $19.1 billion, aligning with expectations.
The short-term rental company’s profit per share was reported to be 98 cents, exceeding estimates of 78 cents.
Concurrently, Booking Holdings (NASDAQ:BKNG) shares experienced a 10.25% surge in extended trading after the company raised its annual forecast, benefiting from the increasing demand for international travel to Europe.
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Author Faith Yakubu 
