Airbnb is expected to report its first year of positive net income this year. Photo / AP
Lex OPINION:
Airbnb's decision to allow its employees to work from anywhere is not just a way to lure talent. The room rental platform wants users to book increasingly long stays in Airbnb homes. Permitting its workforce to move around freely is a high-profile advertisement for that lifestyle.
Focusing on
domestic travel and long-term stays — now a fifth of all nights booked — is the right decision. International business trips remain below 2019 levels. Corporate travel is still under 50 per cent of pre-pandemic spend, according to a report by Deloitte. A new Covid variant could push it down further.
Pent up demand for holidays is more resilient. After a terrible few months in 2020 when travel collapsed and Airbnb was forced to cut jobs, raise US$2 billion ($3.1b) and focus on its core business, bookings have returned in full force.
The San Francisco-based company is expected to report its first year of positive net income this year. Keeping a grip on spending has already led to impressive free cash flow. In the first three months of the year it reported free cash flow of US$1.2b on US$1.5b of revenue. The first quarter figure is boosted by fees on bookings not yet recognised as revenue. But Airbnb's price to free cash flow ratio over the past four quarters is 32 — close to Microsoft's. That should support the share price for a company reporting faster revenue growth.
