Today we are issuing Airbnb’s first quarter 2021 financial results. You can read the details here. Airbnb Co-Founder and CEO Brian Chesky said:
“We are proud of our strong results. We surpassed 2019 revenue levels even though urban travel and cross-border travel, two of our strongest segments historically, have not yet recovered.
“We expect a travel rebound unlike anything we have seen before. Travel is coming back and Airbnb is ready.”
Q1 2021 financial results
With the rollout of vaccines and the easing of some travel restrictions, our business significantly improved in Q1 2021 compared with the same period a year ago. People’s desire to travel, combined with our tightly managed expenses, drove a return to positive topline growth with materially improved Adjusted EBITDA. Here is a snapshot of our Q1 2021 financial performance:
- Q1 2021 revenue increased by 5% year-over-year and exceeded Q1 2019 levels. Despite still being in a pandemic, revenue in Q1 2021 was higher than revenue in Q1 2020 and Q1 2019. This revenue increase was driven by strength in North America and higher Average Daily Rates (“ADR”) during the quarter. In comparison, revenue in Q1 2020 was significantly impacted by amounts paid to customers due to our extenuating circumstances policy to allow Hosts and guests to cancel reservations disrupted by COVID-19.
- Several significant items impacted Q1 2021 net loss. We recorded significant items totaling $782 million, most of which were not related to our day-to-day operations. They consisted of a $377 million loss related to the repayment of term loans, $292 million for a mark-to-market adjustment for warrants associated with a term loan, and a $113 million impairment related to office space in San Francisco. We also recorded $229 million of stock-based compensation expense during the quarter. Total Q1 2021 net loss was $1.2 billion.
- Q1 2021 Adjusted EBITDA materially improved due to a reduction in operating expenses. In Q1 2021, our Adjusted EBITDA was $(59) million, compared to $(334) million in Q1 2020. Due to variable cost improvements, increased marketing efficiency, and disciplined fixed cost management, all operating expense line items were down from Q1 2020 (excluding stock-based compensation expense and a reduction in our reserve for lodging taxes in Q1 2020).
Our strong financial results in Q1 2021 were driven by a number of positive business trends that we believe will sustain as travel recovers. Here are some of the key highlights from the quarter:
- People are ready to travel. As vaccines become more widely available, and restrictions ease, there are signs that people are ready and willing to travel. For example, we saw a sharp increase in bookings in the U.K. immediately after British Prime Minister Boris Johnson announced plans to exit lockdown in February, as well as a sharp increase in bookings in France following the easing of travel restrictions in May. And for guests aged 60 and above in the U.S., who were amongst the first groups to benefit from vaccine rollouts, searches on our platform for summer travel increased by more than 60% between February and March 2021.
- Airbnb supports the new ways that people want to travel. The adaptability of our model has enabled us to serve emerging travel trends throughout the pandemic. Areas of strength included North America, domestic travel, nearby stays, long-term stays, and stays in less-densely populated areas. We’ve also seen growth in family and group travel, especially outside of cities. These areas of strength were reflected in our Q4 2020 results and continued in Q1 2021.
- Guests aren’t just traveling on Airbnb, they are living on Airbnb. Nearly a quarter (24%) of our nights booked (prior to cancellations and alterations) in Q1 were not for traditional travel, but for long-term stays (defined as stays of 28 days or more). This was up from 14% in 2019, as an increasing number of guests are discovering that they do not need to be tethered to one location to live and work. In addition, during Q1 2021, 50% of nights booked (prior to cancellations and alterations) were from stays of at least seven nights.
- Guests are confident in booking travel further in advance. The time between when guests make their bookings on Airbnb and when they expect to complete their stays has increased. We typically see booking lead times sequentially lengthen from Q4 to Q1 when guests start to book travel for later in the year. Even taking normal seasonal patterns into consideration, we have seen lead times lengthen during Q1 2021. In March 2021, lead times were almost on par with those of March 2019. Overall global lead times averaged over 40 days in Q1 2021.
Our millions of Hosts are ready to welcome guests. We have seen increases in supply in the regions that are most popular with guests today: active listings in non-urban areas in Q1 2021 increased almost 30% from the same period in 2019. Our global community of 4 million Hosts across nearly 100,000 cities around the world are ready to welcome guests as urban and cross-border travel recovers. Overall, the number of active listings and experiences was consistent with Q4 2020.