Airbnb shares on track for positive 2021 as travel sector bounces back

• Airbnb Q1 results released 13 May beat analyst expectations
• Airbnb share price rises after 5% earnings growth reported
• However, Airbnb share price still down 37% compared to February records
• Ready to trade the Airbnb share price? Open an account today

A unexpected win for Airbnb

It has certainly been a troublesome year for the San Francisco-based vacation letting platform Airbnb. With the pandemic shutting down virtually all leisure tourism for the foreseeable future, at the time, bookings on the platform collapsed and the company found itself scrambling for funds to keep itself afloat.

However, as lockdowns in the US and Europe ease up and travel bookings start to increase, it looks like Airbnb might be set for a recovery. Despite the surge in travel bookings that have come in the wake of mass vaccination campaigns in the US and Europe, investors were still feeling uneasy ahead of the highly anticipated Q1 earnings reports for the company.

However, it seems that any fears that Airbnb had failed to retain its prime market position were unfounded; the company confounded all expectations, reporting a near-record 5% earnings growth in the first quarter, alongside a mammoth spike in high-value bookings, with 52% of users opting for large, secluded properties away from urban centres.

Markets reacted positively to the news and the Airbnb share price jumped immediately upon the release of the reports. It now sits at around $141, or 9% higher than last week. As such, Airbnb has significantly outperformed some other major players within the travel and tourism sector, with competitors such as Booking.com and Expedia seeing much more modest share price gains in recent weeks.

Fundamental problems and uncertainties remain

Whether Airbnb will be able to keep the momentum going remains to be seen. Despite recent optimism in the sector, a summer full of business-as-usual remains far from certain. Although Airbnb bookings were partly fuelled by the announcement from the European Commission that vaccinated American travellers would be welcome in Europe this summer, there is currently no process in place to facilitate this.

Meanwhile, vaccine rollouts in some of Airbnb's top markets have faltered in recent weeks, while new virus variants are causing policymakers on both sides of the Atlantic to re-assess plans for reopening. Meanwhile, Airbnb still carries a lot of the same baggage it has been saddled with for the past 12 months.

The same earnings report also revealed that Airbnb's new YOY losses have tripled, largely as a result of debt repayments. Meanwhile, the Airbnb share price remains down 37% from its record high back in February, even after their seemingly successful IPO beginning mid-2020. Meanwhile, Wall Street analysts continue to remain alert and have reduced their price targets for the company, to reflect the new volatile environment the industry finds itself in post-pandemic. It seems that, for Airbnb, a lot is hinging on summer 2021.

Trade Airbnb stocks today

Take your position on US shares for just a small initial deposit with spread bets or CFDs. Spread bets are completely tax-free, while CFDs are free from stamp duty.¹ You can also buy and take ownership of US shares commission-free with us.²

Whether you trade or invest, you’ll get access to pre-market and after-hours trading on 70 US stocks.

Open an account to get started.

¹ Tax laws are subject to change and depend on individual circumstances. Tax law may differ in a jurisdiction other than the UK.

² Deal three times or more in the previous month to qualify for our best rate.