Airbnb is the latest travel-related company to reveal that the Delta variant of the COVID-19 virus has impacted their business. According to the vacation rentals business, bookings have slowed down for the third quarter as a result of the rise of COVID-19 cases. After this warning, Airbnb Inc shares dropped more than 4%.
During the second quarter, Airbnb did very well and ended up posting a $13.4 billion profit in bookings after being hit quite hard early on in the pandemic in 2020. While they struggled earlier in the pandemic, Airbnb did turn around and pivot their business successfully, pushing long-term rentals and rentals to people to go to without taking a flight. As a result, Airbnb favored better than most hotels or other travel-related companies did.
However, the business — like so many other businesses in various industries — still struggled during the pandemic. Now, with news that the Delta variant has affected bookings, the company has revealed that they expect bookings and profits to slow for the third quarter and even remain below what they were making in 2019.
Airbnb also references seasonality and how, as we move into fall, it’s to be expected that bookings may drop. Many travel during the summer, and bookings can thrive during these months. However, once fall hits, travel does often slow down, whether we’re in a pandemic or not. With the Delta variant currently causing cases to surge, however, bookings may drop more than is average during this time of year.
With all this said, Airbnb does still expect their third quarter to be very strong — and possibly even the strongest on record. Even with the Delta variant now causing some cancellations and a slowing of bookings, the company still believes that their third-quarter will show a large profit.
Airbnb isn’t the only travel-related company to warn investors of a slow down in profits and bookings. Recently, airlines (such as Southwest and Frontier) have revealed that the Delta variant of the COVID-19 virus has caused cancellations and a slowing of booking. As a result, they have warned their company and investors of a slower quarter — and have adjusted their quarter three forecast. Airbnb differs in that it doesn’t appear they will adjust their quarter three forecast, as they still estimate that they will do quite well.
Airbnb has been able to thrive in ways that hotels could not during the pandemic. Active listings on the site and app have been relatively stable for the past few months, allowing consumers to safely book lodging, as well as have a range to choose from. Plus, listings that weren’t in urban areas became very popular during the pandemic, and remain to be.
As the weeks continue and economists receive more data, analysts will better understand what to expect in the Delta variant. So far, not too much has been affected by the variant, other than some travel-related companies. However, if cases continue to surge across the nation, we may see the variant affect businesses in different ways.