After achieving record profits, Airbnb plans to reposition itself by entering new businesses. economy

The cover of Airbnb’s Q4 2023 earnings report is depicted with fireworks. The company has a lot to celebrate. Despite extraordinary losses in the last half of the year, the housing firm founded by Brian Chesky, Nathan Blecharski and Joe Gebbia in 2008 out of their home in San Francisco has become a very profitable giant. It closed 2023 with revenues of $9,917 million, up 18% from the previous year, and broke its profit record with a net result of $4,792 million, up 153% from 2022, which was its It was the first year. Absolute profitability. Nevertheless, the company announces plans to reposition itself by entering businesses that go beyond accommodation.

“We believe now is the time to move beyond our core business and reinvent Airbnb. Although this will be a gradual multi-year journey, we are excited to share more about it later in 2024,” the company cryptically notes in its letter to shareholders. “Airbnb is at a turning point. “We have spent the last three years improving our core service and now we are ready to begin our next chapter,” he says.

When asked about possible diversification plans, Airbnb’s slim director, Brian Chesky, already speculated in an interview with EL PAÍS a few months ago that they were analyzing it. “We are considering many new product and service opportunities. Right now we don’t have anything I can share. But my general view is that the more people like what you do, the more they want other things from you,” he said.

Head of the company at the conference with analysts. Brian Chesky has mentioned above all initiatives in the field of artificial intelligence. The company bought GamePlanner.AI, one of the companies that created Siri, late last year. Airbnb’s goal is not to create its own language and generative artificial intelligence models, but rather to improve the interface.

“Although the models are very powerful, the interface is not really an AI interface. It’s the same interface from the 2000s. This is the typical classic web interface. So we think the models, in some senses, are probably underutilized,” Chesky told analysts. “Pick up your phone and look at all its icons. “Most of these applications have not changed fundamentally since the advent of generative AI,” he said.

Chesky has thus indicated that the new initiative will include new integrations of artificial intelligence and third-party services into its products, allowing for more personalized travel recommendations for guests and a better user experience for hosts. “Imagine an app that feels like it knows you, like the ultimate assistant, with an interface that adapts, evolves and changes in real time, like you’ve never seen before. This will allow us to move from being a single vertical company to becoming a transversal company,” he explained.

“AI is going to be transformative for many companies, especially digital companies like Airbnb,” he told EL PAÍS in November. “Just like when the Internet was born or when smartphones came out, it’s a change of platform, the whole game changes again,” he explained.

geographical diversification

Apart from entering new businesses, Airbnb is also working on geographical diversification. “To unlock greater growth opportunities, we are investing in less-penetrated international markets, and we are seeing good results,” it said in its earnings report. “Following the success achieved in recent quarters in Germany, Brazil and Korea, we are expanding our strategy in countries such as Switzerland, Belgium and the Netherlands. Belgium and the Netherlands,” he adds.

In the fourth quarter of the year, Airbnb grew by a strong 17% to $2,218 million, but reported a loss of $349 million, which the company attributed to extraordinary tax items of nearly $1,000 million. Fourth quarter adjusted gross operating income of $738 million increased 46% compared to fourth quarter 2022, driven by business strength and discipline in cost structure management.

The company has indicated that this year has also been off to a strong start, with more than six million guests received on Airbnb for the year. For the first quarter, the company forecasts revenue of $2.03 billion to $2.07 billion, representing 12% to 14% growth, which will benefit from an early Easter, which will impact growth in the second quarter. These forecasts are somewhat above analysts’ expectations.

Airbnb wrote in its letter to shareholders that the company is “particularly excited about the upcoming Paris 2024 Olympic Games.” It has already seen a surge in supply and demand, and the current accumulation of nights in Paris during the summer is more than double what it was a year ago. The company has said that it hopes to host five lakh people in the city.

The company has successfully overcome the pandemic crisis. Revenue declined in 2020 and the company lost $4,585 million as the health crisis halted travel. But since that fateful year, Airbnb has come back stronger. It reduced the red number to $352 million in 2021 and in 2022 it achieved the first annual profit in its history to $1,892 million, after a 40% increase in revenue, to $8,399 million, more than double that of 2020. pandemic. Now, it achieves record revenues and profits and launches into new businesses.

Airbnb has announced a new share buyback program worth up to $6 billion. The company is worth approximately $96.5 billion in the stock market. Its shares have increased by about 25% in the last 12 months and trade at around $150. This week they marked their highest level in two years, although they are a far cry from levels above $212 three years ago.

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