Airbnb

As a global facilitator of travel,

Airbnb (NASDAQ:ABNB) was devastated by the onset of the pandemic. Understandably, one of the last things people wanted to do was get on board a crowded airplane and remain there for several hours. 

Fortunately, effective vaccines against COVID-19 have been developed and are being administered at a rate of millions of doses per day. That's giving people the confidence to travel again and governments the confidence to loosen their rules. Recently, the U.S., England, and Singapore, among others, have eased restrictions for travelers who are fully vaccinated against the novel coronavirus.

A family walking into a house with their luggage.

Airbnb sees higher travel activity in areas with high vaccine availability. Image source: Getty Images.

Easing restrictions will make it more convenient for cross-border travel

Already, Airbnb's bookings for people traveling to nearby destinations has recovered above 2019 levels, which was before the outbreak. People are likely less hesitant about going somewhere they can reach by car. They don't have to get on an airplane and sit close to other people outside of their family. Additionally, going somewhere you can reach in your car usually means it's within your government's jurisdiction, so you don't have to expose yourself to the myriad restrictions often accompanying cross-border travel.

Now, with the easing of travel restrictions, folks are more likely to book international trips. Indeed, here is what Airbnb management said about the easing of travel restrictions in its most recent report to investors: "In Q2, we saw increased bookings in regions where travel restrictions lifted and vaccine availability expanded. In particular, North America remained strong, while [Europe, the Middle East, and Africa] benefited from reduced travel restrictions."

Despite an easing of restrictions, one of the standard requirements for cross-border travel is proof of vaccination against COVID. In that regard, it will help that nearly 7 billion vaccines doses have now been administered -- thus, increasing the group of people eligible to travel across borders.

Airbnb is preparing for the unleashing of pent-up demand in travel

Airbnb is preparing for this potential boost in bookings by encouraging more hosts to sign up and existing hosts to list more often. The company does not own or operate vacation rentals of its own. Instead, it relies on hosts who sign up on its platform and list rooms, homes, guest houses, and other accommodations for folks to rent. 

In anticipation of a travel rebound, Airbnb launched an ad campaign in February to attract more hosts. An increase in demand cannot turn into revenue for its business unless it has the supply to fulfill it. The campaign has been effective so far. The company noted that in regions where it ran the ad campaign, traffic to its platform increased by 25%. And Airbnb is seeing an increasing supply of listings in areas with the highest demand for rentals.

Airbnb's results are moving in the right direction. Second-quarter revenue of $1.3 billion was above the $1.2 billion the company saw in the same time period two years ago. Investors can look for that trend to continue as the world progresses in its battle against the coronavirus. Still, investors should not expect the path to be linear. A rise of a new COVID variant that is resistant to existing vaccines could reverse or pause the progress in eradicating the virus.

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Source : https://www.fool.com/investing/2021/10/22/airbnb-revenue-growth-could-continue/

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