Airbnb Posts Its First Profitable First Quarter and Expects Average Rate to Dip (May 2023)

From the record. This is a look back at May 2023. The desk wrote it on 11 October 2026 from sources published at the time; Stay Gazette opened in July 2026 and did not report this as it happened.

On 9 May 2023, Airbnb reported the first profitable first quarter in its history, and in the same letter told investors that it expected its average nightly rate to slip. Revenue for the three months to 31 March was $1.8 billion, up 20% from a year earlier. Net income was $117 million, against a net loss of $19 million in the first quarter of 2022.

Airbnb forecast second-quarter revenue of $2.35 billion to $2.45 billion, said it expected nights and experiences booked to grow more slowly than revenue, and said it anticipated a slightly lower average daily rate than a year earlier. The Associated Press reported that the shares fell nearly 12% in extended trading after the forecast was posted. CNBC reported that they fell 10% on Wednesday 10 May.

The quarter in figures

Nights and Experiences Booked: 121 million, up 19%, the highest quarter the company had recorded.
Gross booking value: $20.4 billion, up 19%.
Adjusted EBITDA: $262 million, up 14% from $229 million. The margin was 14%, against 15% a year earlier.
Free cash flow: $1.6 billion in the quarter and $3.8 billion over the trailing twelve months.
Average daily rate: $168, flat against the first quarter of 2022 and up 3% excluding foreign exchange.
Active listings: up 18%, against growth of 16% in the fourth quarter of 2022, excluding China.

Airbnb put the swing to profit down primarily to revenue growth, expense discipline and interest income. Its board approved a new authorization to repurchase up to $2.5 billion of Class A common stock, after $2 billion of buybacks over the trailing twelve months.

The Associated Press put revenue at $1.82 billion against a Wall Street forecast of $1.79 billion in a FactSet survey, and profit at 18 cents per share. Revenue earned in the United States rose 13% and was 48% of the global total.

What Airbnb said about the second quarter

Airbnb said the range represented year-over-year growth of 12% to 16%. CNBC reported that analysts polled by Refinitiv had expected $2.42 billion.

Airbnb said the comparison was a hard one. The second quarter of 2022 had been lifted by pent-up demand after the Omicron variant, and against that base Airbnb expected nights and experiences booked to grow more slowly than revenue.

On rates, the letter gave two causes for the expected dip: a shift in the mix of bookings, and the new host pricing tools in the 2023 Summer Release of 3 May. Those tools let a host see how other Airbnbs in the area were priced, including the ones getting booked and the ones that were not. Airbnb also expected second-quarter Adjusted EBITDA to be similar to a year earlier in dollars and lower as a margin, because it was spending on marketing earlier in the year.

Dave Stephenson, the chief financial officer, told analysts that average daily rates in North America had been persistently high. For the full year, he said he thought the year-over-year change in the average daily rate would probably still be down in the mid-single-digit range, and that Airbnb's expectations had not changed.

Supply, price and the host

Brian Chesky, the co-founder and chief executive, tied supply to price on the earnings call. Demand had grown faster than supply in 2020 and 2021, he said, and prices had gone up. Airbnb had since seen 900,000 incremental listings, he said. “And I think what's going to happen is all the supply coming on the market will keep prices from going up,” he said.

Airbnb said supply grew by double digits in every region and market type, fastest in North America and Latin America. It said approximately 90% of its hosts were individual hosts, and that they accounted for the majority of active listings and of nights and experiences booked.

Chesky said guests were most price-sensitive in North America, and in the United States above all. “And in the United States, the lowest-priced listings have the highest occupancy,” he told analysts. He expected occupancy to keep rising for more listings as Airbnb's rates continued to normalize.

On 10 May, CNBC reported, he told the network that pressure on affordability in North America was the reason for Airbnb's caution about the second quarter. “We're really focused on trying to make sure prices are modulated in North America,” he said.

On the total price display, opened to every guest that month, Stephenson said the effect on the business overall had been neutral. Chesky said guests who turned on the price toggle were booking listings with lower cleaning fees or none.

Where the guests were

The mix of stays was moving back toward its shape before the pandemic. Gross nights booked in high-density urban areas were 48% of the total, up from 46% a year earlier and below 58% in the first quarter of 2019. Cross-border nights were 45% of gross nights booked, up from 39%. Stays of 28 days or more were 18% of gross nights booked, down from 21% in the fourth quarter of 2022.

Airbnb named Brazil and Germany as two of its fastest-growing markets. Gross nights booked on an origin basis were up 114% for Brazil and 70% for Germany on the first quarter of 2019. The company said its backlog of nights was approximately 25% stronger than a year earlier.

How Wall Street took it

The Associated Press called the outlook weak and wrote that it had overshadowed the first-quarter profit. CNBC reported that analysts at Bernstein judged the quarter good enough, kept their outperform rating and saw the headwinds as a matter of timing. Baird's analysts found the results sound in general but overshadowed by worry about the second quarter. Short Term Rentalz, the trade site, wrote on 14 May 2023 that Airbnb had restated its focus on affordability, supply growth and expansion.

A Bernstein analyst raised the gap between supply and demand on the call. The analyst noted that supply was growing at about 18% while Airbnb pointed to second-quarter demand growing perhaps 10% to 12%, and asked which figure to extrapolate. Chesky replied that he thought the new supply would keep prices from going up, and said later in the call that more supply would produce good-value listings that attracted more demand.

The Associated Press noted that Chesky expected total prices to bring down cleaning fees, and that nothing in the company's disclosures showed if that was happening.

The Gazette Verdict, looking back

Airbnb's best first quarter was a warning to hosts about their own rates, and the company put it in plain figures. It reported $1.8 billion of revenue, $117 million of profit and $1.6 billion of free cash flow, then forecast a slightly lower average daily rate and named its new host pricing tools as one cause. Chesky said new listings would keep prices from going up and that the cheapest listings in the United States had the highest occupancy. Airbnb's revenue grew 20% in a quarter when its average daily rate did not move, so the company had shown it could grow on volume, and it had $2.5 billion authorized for buybacks. The host with one home had one calendar and would carry a lower rate alone. The lesson of May 2023 was to plan the summer on occupancy, at a rate that could stand beside 18% more listings.

The other side

Airbnb's case was that cheaper nights were the cure for empty ones. Chesky said the lowest-priced listings in the United States had the highest occupancy, and that more listings would fill as rates returned to normal. The average daily rate had not fallen: it was $168, flat on a year earlier and up 3% excluding foreign exchange, and the backlog of nights was approximately 25% stronger than a year before. Analysts at Bernstein saw the second-quarter headwinds as a matter of timing. And the supply was, for the most part, hosts like any other: approximately 90% of Airbnb's hosts were individual hosts, and they held the majority of active listings.

What it meant for hosts

A host reading the letter in May 2023 learned three things about the summer ahead. The first was competition. Active listings were up 18%, and the fastest supply growth was in North America and Latin America.

The second was price. Airbnb expected its own average daily rate to dip in the second quarter, and its finance chief said he thought it would probably be down for the year. A host who set summer rates from the figures of summer 2022 was pricing against a market in which the platform itself expected a slightly lower average rate. The pricing tools Airbnb had released on 3 May showed how other listings in the area were priced, booked or not.

The third was where demand was coming from. Guests were returning to cities and crossing borders again, and stays of 28 days or more had slipped from 21% of gross nights booked to 18% in one quarter. A host who had leaned on long stays had reason to look again at shorter ones.

Fees were part of the same sum. A host in the United States, where Chesky said the lowest-priced listings had the highest occupancy, had reason to check the full price of a stay, cleaning fee included.

Sources

Airbnb Newsroom, Airbnb Q1 2023 financial results (9 May 2023).
Airbnb, Inc., furnished to the US Securities and Exchange Commission, Q1 2023 Shareholder Letter (Exhibit 99.1 to Form 8-K) (9 May 2023).
Associated Press, as carried by News4JAX, Airbnb posts $117 million profit, but 2Q outlook disappoints (9 May 2023).
CNBC, Airbnb drops on cautious outlook as CEO says customers want 'affordability' (10 May 2023).
The Motley Fool, Airbnb (ABNB) Q1 2023 Earnings Call Transcript (9 May 2023).
Short Term Rentalz, Airbnb highlights affordability and market expansion in Q1 report (14 May 2023).

Airbnb Posts Its First Profitable First Quarter and Expects Average Rate to Dip