Airbnb Inc. (NASDAQ:ABNB) shares fell after the company gave a disappointing outlook for bookings in the fourth quarter, suggesting that consumer preferences are shifting away from higher cost rentals that thrived during the pandemic and back to urban and cross-border destinations.
The San Francisco-based home-sharing platform said it expects the pace of nights and experiences booked will “moderate slightly” in the fourth quarter compared with the third quarter’s gain of 25%. Airbnb reported 99.7 million nights and experiences booked in the three months ended in September, falling short of analysts’ estimates of 99.9 million.
Airbnb also said it expects average daily rates to moderate this quarter due to a strong dollar and a shift in people heading back to cities, which tend to have lower rates based on smaller-sized accommodations.
The company forecast fourth-quarter revenue of $1.80 billion to $1.88 billion, with the low end of that range below Wall Street’s estimate of $1.86 billion.
The muted outlook comes after Airbnb recorded its highest revenue and most profitable quarter yet over the summer. Revenue jumped 29% in the third quarter to $2.88 billion and the company earned $1.2 billion in net income, topping analysts’ estimates.
The third quarter had been expected to be a blowout season, as CEO Brian Chesky and other industry executives banked on pent-up summer travel demand after two years of Covid-19 restrictions.
ABNB shares gave back $2.18, or 2.3%, to $92.23.