Q1 2021 Airbnb Inc Earnings Call
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And therefore.
[music].
Good afternoon, and thank you for joining Airbnb earnings conference call for the first quarter of 2021 as a reminder, this conference call is being recorded and will be available for replay from the Investor Relations section of Airbnb website. Following this call.
I will now hand, the call over to Ian Lee Airbnb type of Investor Relations. Please go ahead.
Good afternoon, and welcome to Airbnb third quarter of 2020 one's earnings call. Thank.
Thank you for joining us today on the call today, we have moving these co founder and CEO and Brian Chesty, and our Chief Financial Officer, David Stevenson.
Earlier today, we issued a shareholder letter with our financial results and commentary for our first quarter of 2021.
These items and also posted on the Investor Relations section of our ABB operating these websites.
During the call, we'll make brief opening remarks, and and spend the remainder of the time on Q&A.
Before I turn it over to Brian I'd like to remind everyone that we'll be making forward looking statements on this call that involve a number of risks and uncertainties and.
Actual results may differ materially from those expressed or implied in the forward looking statements due to a variety of factors.
These factors are described under forward looking statements and our shareholder letter and in our form 10-K filed with SEC on February 26th 2021.
We urge you to consider these factors and remind you that we undertake no obligation to update the information contained on this call terrific subsequent events or circumstances.
You should be aware that these statements should be considered estimates only and are not a guarantee of future performance.
Also during this call we will discuss some non-GAAP financial measures. We've provided reconciliations for the most directly comparable GAAP financial measures and the shareholder letter posted to our Investor Relations website.
These non-GAAP measures can be a substitute for our GAAP results.
And with that are possible for Brian.
Alright, Thank you very much and and thank you everyone for joining us today.
I want to start by acknowledging the state of the pandemic.
COVID-19 cases continue to surge and parts of the world such as India.
And our thoughts go out to our hosts and guests and employees in India. During this difficult time.
There is much more work to do to limit the spread of the pandemic and many people are still hurting and we know how lucky we are to be and the position we're in today.
Yeah.
2020 was a year that none of us will ever forget.
There was also a year when travel fundamentally changed forever.
Airbnb changed as well, we sharpened our focus on our core business of hosting and we got back to our roots.
Back to what is truly special by Airbnb, the everyday people, who host their homes and offer experiences and.
And we emerged as a stronger and more efficient company.
Our business rebounded faster than anyone expected and it showed that as the world changes, we are able to adapt.
Now turning to our Q1 results our business dramatically improved with the rollout of vaccine and the easing of some travel restrictions.
While conditions arent, yet normal they are improving people's desire to travel combined with our tightly managed expenses drove a return to a positive top line growth and materially improved adjusted EBITDA.
In Q1 our.
Our revenue was $887 million.
This was an increase of 5% year over year and.
Ceded Q1 2019 levels as well.
But here's the most important fact.
Our business improved without the recovery of two of our strongest historical segment urban travel and cross border travel.
We expect the return of urban and cross border travel to be significant tailwind over the coming quarters.
Now as our topline recovers, we are maintaining our focus and our financial discipline to improve our profitability.
Our adjusted EBITDA loss was $59 million.
This was approximately $190 million better and the same period, and 2019, and it was $275 million better than a year ago.
And on essentially the same revenue.
Now these results show that we are improving our variable costs were being disciplined with our marketing and our fixed cost.
Our strong performance also indicate the beginning of the travel rebounds.
A few hours ago.
Director of the centers for disease control said quote if you are fully vaccinated.
Can start doing the things that you had stopped doing because of the pandemic and club.
We think this mean is that more people will be comfortable traveling and.
And it further strengthens our view that we are going to see a significant travel rebound.
In fact, we expect this rebound PV, unlike anything that we have ever seen before.
And we expect travel to be very different than before.
People are discovering that they don't have to be tethered to one location to live and work.
And what <unk>.
Is that people are more flexible about where and when they travel.
People can now travel anytime.
People are also traveling everywhere they are.
Not just going to say 20, or 30 cities, they're visiting smaller cities towns and rural communities.
And when people do travel they're staying longer.
24% of our nights booked.
And Q1.
We're for sales of 28 nicer longer.
People are not just traveling on airbnb.
They are now living on Airbnb.
And these trends are not going away.
The World is never going back to the way it was and that means that travel is never going back to the way it was either.
So let me tell you about what we're doing to prepare for what's ahead.
Our single priority in 2021.
As to prepare for the coming travel rebound.
To do this we're perfecting the end to end experience of our core service.
This includes educating the world about hosting recruiting more host simplifying the guest experience and delivering a world class service now.
And I'm going to briefly share how we're executing against each of these areas.
First we are educating the world about what makes airbnb different.
Hosting.
In late February we launched our first large scale marketing campaign and five years made possible by host we're educating guests about the benefits of being hosted and were expiring more people to become hosts.
Now while it's still early day campaign is being well received.
And markets, we're running the campaign overall traffic is up first time bookers are up traffic from prospective host is up and our brand favorability is up.
Second.
We are recruiting more hosts and we're setting them up for success.
To build on the momentum of our marketing campaign, we launched and accompanying digital campaign, that's focused on recruiting new hubs.
And we've completely redesigned the and and experience of being a host on Airbnb, we're making it easier for anyone to start hosting.
Third we are simplifying every part of the guest experience.
In February.
We launched a flexible data feature.
It allows guests to browse options, while being flexible on the exact dates of their trip.
Now since the feature launched there have been more than 90 million and flexible based searches on Airbnb 90 million searches since just February with flexible date for this new feature we created and guests to use this feature have converted at a higher rate and and guests who do not know.
And now this is just one of many improvements that we're making to the guest experience.
And finally whenever our guests for host Nita, we must deliver world class service.
So to prepare for the travel rebound, we're improving our community support product enhancing our safety protocols and we are scaling our operations by ramping our third party support.
Now I want to rack.
By highlighting a major announcement that we have coming up and less than two weeks.
On may 24th.
We will announce the.
And the most comprehensive update to the Airbnb service and.
And 12 years.
As part of the special announcement.
We're going to share insight on how travel is fundamentally changing.
Along with the updates we've made to prepare for what's ahead.
We're going on and deal a simpler and more expiring and guest experience.
And we are going to show you upgrades that make it even easier to be a host on airbnb.
So to watch the announcement it was the Airbnb dot com on Monday May 24.
So to summarize we're pleased with the strong Q1 results. We are encouraged by the trends that we're seeing driving these results and we are executing against our 2021 plan to prepare for the travel rebound and we think this travel rebound will be like unlike anything we've seen before we think this is a travel rebound and the country. So.
Travel is coming back and Airbnb is ready and with that David and I look forward to answering your questions.
At this time I would like to remind everyone will know that you're asking the question.
And the number one on your telephone keypad.
And your first question comes from Justin Post with Bank of America.
Great. Thanks, so much for taking my question I guess I really want to focus on behavior change, which could benefit the company first host and also guests and I think and the letter. It said post listings were stable with Q4, but it seems like Youre really encouraged on what Youre seeing so maybe you could dive in there and tell us.
And is encouraging about what youre seeing with ocean, whether you see expect a lot of new issues to hit the market over the next year and then similarly on the gas side.
How do you think this pandemic is going to increase and willingness to use alternative accommodations or you're seeing some positive signs there. Thank you.
Thank you very much Jeff and so why don't I start and Dave feel free to.
And after I go so let's start with host and that will go to guests. So adjusted and let's just start with we have 4 million hosts on Airbnb.
And I think if you ask people a year ago would we have had such a stable host community. They probably wouldn't have expected that but what we have today, our host that offer $5 6 million lifting at least $5 6 million listings are about a million more than we had this time and 2019 and what we've actually seen is a large growth and non.
<unk> and lifting and so we actually have a 30% growth and non urban and vacation rental listings as well now it's important to note that 90% of our host our everyday people their individual and the reason why is as we've made hosting on airbnb easier and more and more hosts are coming to airbnb as well.
Now specific to what we're doing we launched our first global campaign and five years made possible by host as I said, we also have and accompanying host campaign. Both of these campaigns, we are seeing significantly larger traffic of prospective host to the platform.
The next thing we're doing is we're making it even easier to become a host by reducing the number of steps to become a host and as we reduce the number of step conversion rate for host guests even easier. We now are allowing host to be paired with other super hosts to help them get started and we have webinars as well and and finally, we have new tools and services.
And make it even easier for host to lift and be successful I'll just and this first thing by saying on May 24th we will and deal a number of new tools and services I think theyre going to make it much easier for host to get started and I want to point out that new host that joining airbnb 50 per cent of them get a booking within four days of activation and.
I think hosting is coming at the perfect time for many people and the world because Airbnb, we started actually after the great recession in 2008 and at that time. There were many hosts and many people that were looking at Airbnb as a financial lifeline.
I think if you think about the number of host on Airbnb, the top occupations of our host our health care workers educators and people and food and hospitality. These are industries have been hit really really hard. So our job is to tell the story of hosting the fact on Airbnb, you can make $8000 and United States on average if you have one less day was.
Five times you can make.
And on average American dot and the stimulus checks. So these are some of the things we're getting going and we're just getting started and ramping and I expect us to get millions of more host and the coming years on Airbnb.
Now as far as trends for guests just and I'll also cover this as well.
As I've said before I think two things are true number one this is a travel rebound that and starting that is unlike anything we've ever seen before and I think for Q1 results demonstrate that.
But the other thing that we're seeing is that travel is going to be very different than before.
Probably the biggest changes are the following.
Number one I don't think business travel is ever coming back the way it was before the pandemic, it's at least not going to look like it did.
I do think a new kind of business travel may emerge. Many employees are working remotely and they're going to need to go back to headquarters occasionally you're going to see longer phase going and city and so we're seeing elevated bookings and urban markets for phase of longer than 28 day.
But the bigger trend is going to be flexibility.
I think that all of us working around the world and most of US if we're privileged enough to themis are more flexible than we were before the pandemic.
Because of the world of their means a world where we can work anywhere is a world where many people are also choosing to live anywhere and this has created three travel trends number one people can travel anytime.
This is why we have a flexible day feature where instead of saying I want to travel from July 5th of July 10, you can say I want to go somewhere for a weekend a week or a month anytime. This summer we have over 90 million people use this feature and as more people use. This feature conversion rate goes up the second thing. We're seeing is length of stay is increasing.
In 2019 at this period of time.
14% of our night, where longer than 28 days now.
Now, 24% of our nights or longer than 28 day, what that basically means is a quarter of our business isn't travel and living after 28 days you are probably not traveling.
And I think what this is a trend up is that traveling and living are going to begin to blur together. So this is the second trend we are seeing and the third is people are now traveling everywhere. If you look at the concentration of our revenue is much more distributed and it was a couple of years ago and this is because people arent just go into the same 20 or 30 cities they are getting and <unk>.
Cars, and they're traveling a small towns and rural communities, many of which don't even have a hotel.
So again, the big trend and flexibility people are traveling anytime anywhere and they're staying longer and we thank all of these trends are here to stay and I'll, just and by giving one more thought.
I think there is a mass shift from mass travel to meaningful travel because people Miss traveling effect and many surveys people say the thing they missed the most.
And we've taken away from the pandemic at.
And at least from outdoor activities as travel, but they don't Miss business travel and they don't Miss standing in line in front of a museum or itself.
And marketing itself is getting a photo with the southeast there with a really miss is spending time with the people they care about and we call. This meaningful travel we are friends and family think Airbnb is really a great way to do that so those are the trends that we're seeing the two trends I do think youre going to inverse or we are going to see a recovery of urban travel and a recovery of crop.
Border. This has been our bread and butter before the pandemic and I think those are significant tailwind for growth.
Yes.
Great. Thanks for that very detailed answer I appreciate it.
Okay.
And your next question comes from Mario Lu with Barclays.
Great. Thanks for taking the questions.
Personal lines on listings accounts. So you said you have similar levels for last quarter around $5 6 million.
But let's just hold on campaign that you guys are running is there is there like a timeline that we should expect to drive that number up or you mentioned in the past on a quarter of gas eventually become close when should we expect.
And that number and its increase.
Yes, Dave why don't I give you. This question and it's a great question Mario and I'll also say that in Q1, 28% of our hosts.
Now prior guest as well for that number is increasing but Dave I'll hand, it over to you yes.
Yes to be clear on the stat is that of on guest.
Guests, 25% or up 24% were former new hosts were former cash so just curious on the percentage.
It's early we are seeing strong lift and count $5 6 million has been very stable I think actually one of the things that's been really impressive. During this time is that our host churn in Q1, 'twenty, one and it's actually lower than our host churn and the same period and 2019 and actually our churn in 2020 with even more than one from 2019.
So I just figured all of this shows the resiliency and the stability of our supply and were optimistic that as things continue to rebound as we continue to educate people about the benefits from hosting and all of the tailwind for that Brian just outlined.
We will continue to see strong host growth going forward.
Great and then just one follow up on domestic versus international.
And so I'm not sure if you can see this and your data yet, but just curious to hear and if <unk> seen from substitution and turns domestic bookings versus international as the vaccine rates increase and do you think for domestic rates.
Main above 2019 levels, even after quarters open up thanks, David and I think the clinical.
Yes, and some clear exactly where everything will settle out for domestic versus international clearly right now 80% of our nights and Q1, where domestic so we've seen domestic travel being consistent and really the.
Strength all around the world.
Historically, our strength there has obviously been and urban areas for cross border. So prior to kind of pin debit contribute about 50% of our nights, we're actually cross border nights, and obviously with that not occurring clearly you'll see some substitution where people are going to stay domestically, where they might have taken a cross border trade.
And our urban and cross borders and our strength.
Know that many of these trips will be on our incremental and such that when travel rebound for more typical stake will have growth and overall travel just due to the hesitancy right people are hesitant to travel right now.
They are and vaccinated or maybe they can't travel due to some of the Lockdowns and border. So we know that many of the troops.
And b coming back and will be incremental to what we're seeing today.
Okay. Thank you.
And your next question comes from Colin Sebastian with Baird.
Yeah.
Thanks, Good afternoon, I have a couple of questions on on.
And the investments and spending I guess first off what gives you the confidence that you can moderated sales and marketing spend and the second half without impacting bookings or listing levels, if thats simple plan and.
And then in terms of product development, obviously, primarily making some announcements soon but.
Hi.
How are you thinking about the pace of R&D or product development spend now that business appears to be returning to normal or whatever normal means now is it perhaps time to look at re accelerating hiring or what are your thoughts on that thank you.
Yes. Thank you very much calling on Dave why don't I take that at a high level and you can obviously go into more detailed analysis.
And I am calling a couple of things let me just first start and talk about our marketing strategy and then I'll answer your very specific question about <unk> marketing first of all we take a very different approach to sales and marketing I think and our competition, but we have a full funnel integrated approach to marketing and when we integrate is PR.
Brand marketing and performance marketing.
And really PR. In addition to word of mouth is the thing that really built our brand over the last 10 years and because of that Airbnb is a now and and the verb used all over the world and this has led to 90% of our traffic being unpaid or direct even as recently as Q1 and.
And even and this this past quarter with elevated marketing we have similar traffic levels for 2019, but we've spent 50% less on marketing.
And we think that if you have a product that is unique and different that the role of marketing isn't too by customers and the role of marketing is not physical and the role of marketing and education and so what we have done and we're doing our first brand and we did our first brand marketing campaign on a global level and five years. It was a campaign called made possible by home.
And it's really just taking real photos from real guests on real trip to highlight what makes airbnb different which is hoped we want our host to be as mainstream as the homes and spaces on Airbnb now while the results are still early as I said, we have seen elevated traffic levels and to answer your question on each one versus <unk>, we decided to.
Road spending we were prepared for a travel rebound. Unlike any other that we didn't want to spread the money over the course of the year. So we disproportionately put the spending in each one to really capture as much of this demand as possible and I think what we're seeing is that timing is going to bear out to be the right timing and then as far as one and I also answer.
<unk> product on a high level and then Dave you can you can also go in and so at a high level for product development, Here's what I, here's here's what we've learned.
Before the pandemic, we were a divisional structure, we had our core business of homes to be outside of business travel. We had we were working on a number of other divisions. We had many divisions and because we have many divisions, we had multiple product development groups and what we did is when we became a functional organization and we got much more focused.
And on hosting we realized that we could be much much more efficient. It's one of the reasons our product development group is much smaller than it was two years ago and that's allowed us to move for really really fast and I hope that you see on May 20 for the even despite the team being smaller and more nimble we've been able to increase the pace of development I think people can be really impressed by we're able.
To deliver so that's at a high level, but Dave I know, if you want to jump in and talk more specifically about the numbers.
Our product development spend will increase and the lower rate and revenue, we're not going to have to add back significant number of fixed resources in order to accommodate the business gets back to the size for 2019 and beyond so we're just going to be very disciplined and any additions to our expenses and then as Brian said, we're just seeing great success with our marketing strategy, which we are.
Actually started modifying prior to COVID-19.
Solidified during COVID-19 and we're continuing to see strength here in Q1, so marketing as a percentage of revenue will be higher in early.
First half of the year that will be and the second half year, but we're very encouraged by the results.
Great. Thank you.
And your next question comes from Mohit <unk> with <unk> Securities.
Yes.
Yes, I think not.
Brian maybe give us some thoughts about the reopening of urban triangle.
In terms of timing on where you can think about it is that something that you think might comment on the back half.
This year or you think thats.
For that out.
Yes. Thank you very much maybe for the question.
Well, let me preface.
And my answer with two comment number one.
And I'll be try to be careful.
<unk> and anyone that has been making predictions last year to Campbell's.
I will say is no matter what happens with travel I think one of the things we showed last year and <unk>.
Model is inherently adaptable and so we are adaptable to any travel changes.
But that being said I do think we have quite a bit of data and so with the data we have and we're seeing I think I can give you some indications, although it's going to be a little hard to pinpoint we are seeing that as restrictions lift and cross border begin.
More people travel the city.
We're also seeing that the nature of travel to cities this changing for.
For example, more and more people are booking and longer term state and city for the length of stay is going up and one of the things. We know is that the longer you states and where the mowry and acquiring to fan at home. So I think that as restrictions lift and countries as vaccine vaccinations rise. We think this is a significant tailwind to both urban and travel.
And cross border travel and so we're very very bullish it's a little hard to pinpoint, but I think the comments from the head of CDP today, the lifting of restrictions across Europe. These are all really really good signs and Theres no reason that wouldn't be a huge tailwind to other big travel and cross border.
Our urban travel growth rate has increased every month this year and continues to do so on through.
April and early day. So we're just seeing continued positive momentum.
That's very helpful and maybe a quick quick funnel with prime and so from Brian you talked about business travel and maybe just on here.
And the difference and there are.
People might be.
And just.
Travel during the quarter and maybe rent.
Yes.
Is that a is there.
We see a good opportunity for maybe fix share and that's in the segment versus previously.
And that's targeting and business travelers and moving into cities.
Yes.
And in New York City, and Los Angeles and number of these cities.
And we almost have as many nights booked for stays longer than 28 days as we do states under 28 days and New York City actually the majority of over 28 days now.
I think that is a huge opportunity if you think about where business travel is going and the future it seems and gluten.
<unk> to me that as companies offer more flexibility more people on live around the world, but theyre not all going to want to liver mode, they're going to have to come back to visit and so I think youre going to start to see longer stays I think and additional longer stage. You may also see traveler business travelers traveling together, so let's say.
Three different employees work and three different cities and they have to come back and headquarters. They may not all get three different hotel rooms to airbnb they might get one house. They can split the cost it could be around the dinner and breakfast table on the morning. So I think the things that benefit Airbnb business travel is group travel and longer stay travel those two things I think are disproportionately.
Initial to do and home and these are general tailwind for business travel and I want to be clear I mean people will of course travel for business again, I just think the bar to get on a plane to go to a meeting will be higher than before.
Thank you.
Okay.
Your next question comes from James Lee with Mizuho.
Yes.
Great. Thanks for taking my question here a couple of question regarding the supply side and can you guys talk about maybe and supply and demand balance.
And by reaching a little bit here, where do you see surpluses would you.
You see deficits and are you also looking to increase the supply by tapping into professional hosts and on 90% on individual or even the hotel supply and also secondly, and and what is what are the key friction that you are seeing right now for your host signing up and now you're looking to address with this new tools you're about to introduce.
Thanks.
Yes, Dave do you want to take a supply and demand and I can probably take the increase in per host and key friction.
Sounds good.
On the supply and demand.
What we're seeing because cross border and urban travel is not yet fully rebounded places that we're seeing and surpluses or deficits and demand moving a surplus of supply will be more urban markets and where we can see some tightening of and especially U S. Non urban for.
For the peak of the summer is clearly going to be some of the most constrained from a market. So we're actively working against each of those areas on east <unk>.
On the supply side, and making sure that we are doing our best to recruit hosts and bring on more supply as possible for two periods.
Periods and constrained markets and then we will also use and go back to our marketing expenses for where we use search engine marketing news and targeted approach, especially in markets, where we have we'd be surplus.
Supply and not maybe enough demand and so you can kind of point and adopt so we look at every individual market is different and we will use different levers to try to manage that balance over time.
Yes, and James why don't I want to jump in and say that.
One of the things that Dave just said I want to put on underlying under highlights.
Before the pandemic most people can't Airbnb and they knew exactly where they are going and they knew when they were going so we asked the question on search bar, where you gummy and we asked I Wonder you go and you put in days.
The Holy Grail for matching supply and demand is to be able to also control where you can point demand, but we can't point demand for where we have supply if guests arent flexible if they're predisposed to where the amount of travel now that guests are telling us that they are much more flexible about where they travel we can point demand for where we have supply. This is probably one of them and most.
And things, we have and it explains why when 90 million searches for use with approximate eight feature conversion rate went up so that is just another thing I wanted to underlying now regarding your net next two questions, let's talk about provost and hotels.
And obviously airbnb created a new category and travel because we created tools that allowed everyday people and individuals to become host and yes at a $4 million.
$3 5 million or individuals that being said, we welcome all hospitality providers on Airbnb and we have hundreds of thousands of professional health and professional hospitality providers. The way we think about it is when the guests come to Airbnb Theyre looking for a place to stay and so we don't want them to leave without having found something they want.
Typically they come to look for individual host, that's where we're known for but we want and make sure that we have professional host and hotels to serve those customers and to fill and our network GAAP. So we're continuing to develop new tools and services over the coming years to continue to welcome. These these providers onto our platform and I think theyre going on obviously benefit from all other.
And all of the demand that we have now is for key friction to becoming a host.
One of the things we've seen probably the main learning we've had and as we make it easier more people do it that's the name of the game and make it easier and more people do it before Airbnb and it was really hard to rent your home on the Internet people did it which is hard and we made it easier and on May 24, we are going to show a number of tools a number of offerings and innovations.
We have that I can make hosting EBIT easier, we're reducing the number of steps to become host, we're making it even easier by providing more tools and support and we're going to offer some better tools and services for our host once they become quotes and so I think all of these things will reduce the number of frictions as well.
Okay, if I can ask a follow up questions.
Also on the whole site two are you seeing increased competition for.
For acquiring close and maybe potentially pressure on your take rate. Thanks.
Dave do you want take for them.
Sure.
Right now what we're seeing is number and kind of step back to what our history. We have 4 million hosted around the world. The vast majority of those are individuals for $3 5 million of those for individuals and I think thats very different than what we see kind of competitive platforms are doing and so what we end up seeing with growth.
4 million hosted and we have is on.
Okay.
Give me the last part of the question sorry on last night.
And whilst per trip on.
Yeah, and increased competition for <unk>, and me and maybe potentially pressure on take rates yes.
Question on the take rate right now, we're not seeing the preference for free we think that we have a really great value to the take rate that we give will be charge rates.
Good day to go from guests and our hosts and what we see on particularly side is making sure that when we give value back to our hosts but then we were able to take the kind of appropriate revenue from that so we're not really seeing and pressure about driving for increasing or decreasing the number of hosts and we have on airbnb.
Okay. Thank you.
Okay.
Sure.
As a reminder, please ask only one question so that we can accommodate as many analysts as possible.
And your next question comes from Brian Nowak with Morgan Stanley.
Thanks for taking my questions I have two the first one on the on the 2020, new users that you added it was a great year or just sort of analog and new users for the platform, but curious to hear about what youre seeing from those new users from a retention or booking perspective now as you are into 2021, and how that compares to what you've seen and the user cohort.
And the past.
And then the second one just to go a little bit more on the monetization of the take rate can you just talk.
And so it was about any of the any other tests or experiments you've been doing around insurance or ancillary service sales are tiered take rates or sponsored listings and ways. We can think about that take rate potentially adjusting over time for more services to your hosts or guests. Thanks.
Yes. Thank you very branch, Brian Dave why don't I take the second question months initial hey, great, but why don't you take the question on new users. What are you seeing from new users from attention and booking.
Yes, so the what we're seeing for new users.
Early on but all the early data for the new users that we've acquired here during 2020 is that the.
Retention is very consistent with what we have for users and 2019 and before so I think on one of the benefits and we've seen in 2020 and since we've actually taken and lowered the barrier for entry for new guests to kind of come to Airbnb and trials on for the first time, you don't have to hop on a plane and then have to go across the border and she said you're over 50% of our mates historically been cross border.
And you have to do that to try Airbnb now you can kind of drive just a couple of hours down the road and go check us out and what we're seeing from the earlier.
Early results is that the retention rates are very consumer portion and the past.
And then on <unk>.
Brian to your question on monetization and take rate.
We absolutely see lots of opportunity to increase our monetization and take rate for both GAAP and host.
For example, one of the things. We've said is that many of the tools and services and we've offered and the last five years to incremental and we haven't we haven't charged for for example, unlike our competitors we offer free.
And protection of $1 million against the property damage and personal liability and countries all over the world and as we added these services and we do not charge incrementally for these are generally principles and we always want to give away more value and we're taking but we do think there's opportunities for us to do to offer some more tools and services I think we'd take rate now that being said.
Our focus is critical and we are focused on the most perishable opportunity. The most parish opportunity right now is to capture as much travel demand as possible and be ready before anyone else is for the travel rebound and we are making sure that we have enough hosts for the travel season, we simplified the guest experience and we are providing world class support and so thats.
We're focused on this year, but make no mistake, we have many opportunities and the year ahead.
Great. Thank you both.
And your next question comes from Mark Mahaney from ISI.
Okay I'll stick with one question just on the supply side will you address the issue of whether increasing local restrictions is a factor that is limiting your supply.
And especially in new city, and some of the larger cities and I realize that travel hasn't really recovered theyre fully but just just address the issue of whether how much of a constraint new local regulations on rentals et cetera is on your ability to expand supply. Thanks a lot.
Yes, I can I can take that for the high level data you can feel free to jump in as well.
And thank you for the question.
What we saw with COVID-19 was actually a positive and reset and our relationship with cities all over the World now first let me just start by saying, we know for Quaker and net taxes and 30000 jurisdictions, we used quite a bit and remitted to date to $6 billion from transient occupancy taxes, what happened with <unk>.
It is two things number one travel went from being concentrated and very few top cities to distributing everywhere thousands and cities around the world, though we do see and urban recovery, we don't see that trend completely reversing because I think and a sense you could say that changed on the bottle and other people have realized that there's all these really cool small towns where else can be.
And small cities, many of which don't even have hotels and so they are really important destination.
Other thing that we've noticed though is that a lot of cities have been hit really hard by the devastating economic effects of the pandemic.
So you will see major cities have had major tours and charcoal major tax shortfalls and because of this what do we have actually seen is a lot of cities, reaching out to us and fact, we struck over 100 partnerships over the course of just the pandemic with destination marketing organizations, which as you know are basically tourism bureaus and tourism iron from Scott.
And the Portland, we've been doing partnerships with cities all over the world and to scale our partnership to thousands of cities, we launched last year the city portal as well. So this is and what we're saying I don't take do you want to add anything to that.
And I think that's key and we also have added this new capability last year the city portal, which is another tool to enable cities to understand and what goes on.
Our business in each of their communities and we think thats been another positive tool.
And for cities to feel like they can work with airbnb to help their economies rebound.
Okay, Thanks, Brian and thanks, David.
Thanks, Mark and.
And your next question comes from Jed Kelly with Oppenheimer.
Hey, great. Thanks for taking my question.
I guess, Brian going back to business travel I guess, it's kind of like a two part question I guess number one would be.
Where are you in terms of talking to companies talking to businesses and sort of making the ability to work from anywhere through Airbnb and benefit and then as a follow up you mentioned work from anywhere you are on your company and of course based on San Francisco. So how do you see basically potentially using to work from anywhere and trends for sort of.
Save cost and make your business more efficient if you can.
And more employees working outside the Bay area. Thank you.
Yes. These are.
And two really good questions.
And we start with the first line so.
And.
And as you point out and as I said, one of the kind of one of the trends that has been pretty pretty remarkable over the last year is as more people have more flexibility. They can work from home and that means they can work for and any home often on Airbnb and so one of the things. We're doing is we're continually.
New tools and new ways to make the experience of searching on Airbnb, especially allowing you to search with more flexibility even easier again the type of flexibility. We're looking at is people staying longer booking anytime and and.
And and be on the go anywhere not just for the same stock up destination. So we are going to continue to look at innovation that area and I think the other thing I'll just point out is again in 2019, only 14% of our nights booked were longer than 28 days, that's now 24% and so we think that is a huge growth area for us we think basically a quarter of our business does not.
And even travel anymore. There is a lot of innovation opportunities for us, whereas the die and led company and our Hearts and I think we're going to offer a lot of really interesting opportunities now specific to our San Francisco employee base and let me talk a little bit about what I told our employees a couple of weeks ago.
I told them Theres, two guiding principles number one and we want to model the live anywhere lifestyle. So my model and liver anywhere lifestyle, we're going to allow more flexibility for our employees. So I told our employees and they.
I don't have to come back for the office until next September and we are going to allow a lot of flexibility and even and will you ask people to come back theyre going to have a lot more flexibly before other people arent and we expected to come back the other five days a week every week, we think that is really not how most workplaces and 20 <unk> century are going to operate that being said and the creativity led company. We also do think.
And that in person and collaboration is important and we want to find some balance between modeling the live anywhere lifestyle and allowing for in person and creative collaboration and Thats, where design and we want to get it right. We don't want to rush into that so that's very and Youre working on over the course and next year.
Thank you.
Okay.
And your next question comes from Justin Patterson with Keybanc.
Okay.
And.
Great. Thank you very much.
And just extending on that.
And the question.
And on the platform experience.
It was really designed around and inspiration and discovery.
Spoiler on your announcement on the 24th I'm curious about how you think about the opportunity.
And the funnel a lot of Airbnb for.
<unk> inspiration for travelers.
Places.
And things to do on such that.
Caribbean being really for us to drive and then.
Alright.
For a much broader and stuff.
And before.
Okay.
Thank you Jeff It was a little bit hard for me to hear you, but I think the question was what are we doing to drive more inspiration and discovery.
On Airbnb, inspiring and where you can go and what you can do correct I'd want to make sure and I couldn't hear the last ended on last question.
Okay I'll answer that so.
Yes. So inspiration is something that we're really focused on and actually if you go to Airbnb Dot com right now if you tightened and every dot com you're going to notice on our top of our homepage. There is a big piece of art and assess the greatest outdoors. So we just launched wish lists that are curated by Airbnb and if you close on getting inspired youre going to see none.
<unk> of wish list. So this is just the beginning of a number of things we're doing to try to inspire more travel on the homepage below that youre going to see that we are now merchandising places you can go nearby so between wishlist nearby travel and some of the updates we have on May 24th I think thats going to continue to drive more and more inspiration on may 20 for it.
We're going to showcase the new exciting feature that I think are going to inspire people around flexibility because one of the things. We've seen is a fewer and more flexible about where your travel and when you travel and what that means for some people is the home becomes a destination suddenly where you go with less important than the pay per home you stay on and so.
This is how we're thinking about it and hopefully if we can do and and we can show you. Some other things we're working on.
And your next question comes from like one for <unk> with Deutsche Bank.
Thanks, two questions. If I can first can you talk about how you think about occupancy rates are kind of room nights per active lifting.
For the medium term it seems like it's been pretty stable over the past few years, but I'm wondering if this this notion of like blending on travel and living is kind of increasing shoulder season demand and <unk>.
Way, where you can grow room nights and access of listings are getting more out of your your existing listings.
And then the second one.
Average booking value per night looked really high and <unk>.
If you Peel back the onion and look within the same region and our same property type are you seeing pricing up or is most of that is just mix shift and how do you think about this and <unk>.
Maybe as travel normalizes a bit.
How would that impact <unk> going forward.
Great. So I'll take the first question on occupancy rates stays you can take the second one credit.
The answer to your question is yes.
Occupancy rates, we think average on a global level will go up as we get better at matching supply and demand for.
The basic name of the game is a classic travel a lot of people trying to go to the same place on the same day, that's why I kind of on yourself to Paris, and the center and there is a whole bunch of people and line at a land market because rogue one and same same time so for.
Q increased occupancy rates and theirs.
One or two things we can do we can add more host to the same places that everyone's going to or we can point demand to other places and as length of stay increases as people shift from going to 20 to 30 cities to thousands of communities and as people become more flexible when they travel week and then show them deal we can show them for <unk>.
Example, I know you want to go too we will make up the place France and July but if you went in September you could get you could save a lot of money because there's fewer people there already can point you instead of.
And Paris, we can pull either britney or some other some other community. So theres a lot of opportunities for us I think to point demand for where they have available supply, which will allow us to steadily increase occupancy. So what it means is we don't need to increase supply it linearly with increasing revenue we can get more productivity on the supply we have and Dave I don't want.
Take the ADR.
Yeah on our ADR.
And Q1 were up 35% year over year that was after being up 14% year over year and Q4, the significant majority driver of the Edr and increases driven by mix. The rebound has been earlier in the U S, which on average daily rate, it's been and non urban whole home and the margin homes and each one.
And of those and it's just on average and a higher ADR, so, but the majority of the ADR and we're seeing is from mix.
And actually look at some highly constrained markets and a highly constrained time period, and we'll see some pricing pressure within there that will drive the lease up.
Majority of and it's just driven by mix.
And the other thing on RSA and again is yes. The other thing I'd just say is on.
As that as demand increases on Airbnb that can also correspondingly increased supply. So again one of the things we published on our S. One was 23% of our of our new available host in 2019 were GAAP net increase of 28% in.
Our new available host and starting out with guests and there can be a 2020. So we also think there's a really interesting flywheel, where we can point demand and perhaps supply we have a muscle to continue to add post, but we got to convert guest to host and as that number keeps increasing and that's another big lever for us.
Got it thank you.
And your next question comes from Brent Thill with Jefferies.
David I don't know if any color you can add around the final and locked it comes over the next week is close to 500 million shares non.
All of those are eligible but is there any way you could just frame that theres been since here of this on lock and.
And what it means can you just any any color on that you should get would be helpful.
Yeah, David and I think that sure. So we clearly are a lot comes on Monday.
And there is and the key thing that we're doing to try and make sure that we're ready for that market, what we vendor, which will deliver outstanding results and deliver outsized kind of gross booking volume revenue and driving for profitability.
On a lot more color and give you on the unlock on Monday beyond that.
Okay.
Thank you.
And your next question comes from Brian.
And with Wells Fargo.
Thank you guys.
Wanted to ask if you could tell us what youre seeing with respect to experiences supply dynamics, there online versus offline.
Linkages to travel.
<unk> rates, there and anything with experience.
Yes. Thank you very much for the question, so here's what I'd say about experiences.
When we when we came back in the beginning of the 2020 I really thought.
Expenses would be a breakout year and last year and turns out of pandemic was a very difficult year for experiences we had the per product and our hope and we remain very very bullish about experience over the long term one of the reasons. We remained bullish is because the percent of guests that leave a five star review his experiences is higher and remains higher than percent of gasoline for five star reviews.
And for home, but the pandemic was a difficult time for experiences we launched online experiences what's the way to have and experience without leaving your living room, and I am thinking that in the coming year experiences will be successful because there are fewer alternatives there are fewer.
And tour operators bars lounges, and restaurants are going to be operating at full capacity. So we do think there is a window for claim a long game on this one.
Thanks, Brian.
As a reminder to ask a question price star and the number one on your telephone keypad.
And our next question comes from Stephen Ju with Credit Suisse.
Okay. Thanks, So Brian and I asked the same question to one of your competitors last week. So I'd be interested in your opinion and what is probably a more of a macro considerations.
And so.
The consumer savings rate and at least the United States is probably at the highest level of expense and square for two.
It will take some time for all of us to widened down to I guess normalized levels, which brings up the scenario of consumer spend probably accelerating for the next several years and hopefully.
What are the likelihood estimation is for all of these dollars is going to be a travel so.
And I know, it's early days of the recovery, but what are you seeing and tours and so I guess, a greater willingness to maybe upgrade to the more expensive therapy.
Or just in general stepping up and the frequency as we recover here.
Very good question, Steven Let me tell you what we're seeing so far one other things as we did travel surveys and the beginning of the year.
And we surveyed people in United States. We also surveyed people around the world and and our survey what we found is that the out of out of home activity people Miss the most more than restaurants more than bar more than sporting events more of the concert with travel.
And kind of travel people missed was that business travel was not mass travel going to crowd a destination. It was really just spending time with people that they have not been on the seat during the pandemic I think that we generally just year and for what was taken away from us and travel and spending time with people with something that was taken away from US now with regards to your question about RBC and <unk>.
People upgrading we have seen as we mentioned a material increase and the average daily rate and the United States and this does give us a sense of consumer willingness to spend maybe another way of saying it is maybe before the pandemic people were bookings studio apartments in cities now what we're seeing is a pretty big.
And of people booking entire hone typically even more bedrooms. The number of guests per reservation has increased considerably and so correspondingly people are spending more money I think that trend of course will get normalized over some period of time when other geographies recover and urban recovers, but I do think that we are going to see sustained confidence.
No question.
Thank you.
And your next question comes from Deepak Macfadyen shelf resets.
Hey, guys. Thanks for taking the question on just a couple quick ones. So first can you talk about the implications of booking windows planned on.
Our second quarter and second half on feels like there is a lot of summer bookings summer bookings happening right now already and markets like Europe and even in North America is that is that earlier than usual or does that mean that the recovery is being pulled forward by some capacity. Just wondering if you can now provide some insights on that and then second question.
I'm not sure. If this was asked already how are you thinking about the ROI on the.
Targeted digital marketing programs aimed at host.
These on performance channels any color that you can add there would be great.
Yeah, Dave why don't you take these two questions sure. So regarding the booking window, we're seeing the booking window. Obviously in 2020 shrank dramatically right people were hesitant to travel they only started booking and they have high confidence and we're going to travel or we've seen here early in Q1 of 'twenty one.
The booking windows have expanded and in March we actually saw booking windows consistent with those from March of 2019. So the windows are expanding I think that what youre seeing historically, even more confidence in the U S.
Willingness of travel and the booking window and the U S was expanded further than it has in Europe, but we're starting to see some greater acceleration of our European business, we're seeing.
And European nights, increasing the rate of.
Year over year growth every month and the year since the beginning of the year, including through April and May and.
And we're seeing that as things like the Lockdowns and France.
On our removed and after the UK Prime Minister announced plans for ex Lockdown in February we started seeing more acceleration in Europe. So on the booking window trends are positive and give us encouragement for what we're going to see and the back half of the year, but we'll just have to see what the lockdowns and other kind of true.
Other restrictions look like for Europe for the back half.
And then regarding the ROI and targeted digital marketing for host and this is one of the levers that we have when we do do targeted digital marketing for hosts it would be in specific areas that we know are more supply constrained and.
Where we want to.
On it.
Stablish and a return on net investment for the value of the whole suite, we acquired through that channel and and it's one channel, but it's not the only one and its not the primary one again the most important thing and just kind of step back and educate people about the benefits of posting.
And then make it easier for them to host once they start considering it.
Got it okay. Thanks, Dave.
Yeah.
And your next question comes from Kevin Kopelman with Cowen.
Great. Thanks, a quick one.
Can you give us an update on the cancellation rate trends.
This year compared to 2019 with.
And I think the average.
Listing and being a little bit more flexible and less in the past. Thanks.
Youre welcome day.
And if you want to take us on for Kevin sure. So the cancellation rates, obviously, we're substantially elevated in 2020 versus 2019.
<unk> begun to moderate so that they are substantially below where they were at a 2020 other store moderately elevated versus the 2019 reached so we're seeing a bit more return to normal and it's not quite to historical normal rates.
Perfect. Thanks, guys. Thanks, Brian.
Thank you.
And your next question comes from Tom White from D. A Davidson.
Thanks for taking my question just one for me to follow up on on <unk> and specifically your expectations for the second half I know, there's some color on the letter, but can you maybe unpack your thoughts on kind of all the different moving pieces there.
And the recovery and some other kind of structurally lower ADR markets.
And our recovery and urban and cross border just curious to hear your thoughts on how it all kind of nets out you think on the back half.
So thanks, Tom Dave I'll give you this and I'm sure.
I think the for Buffalo, We do is actually kind of look at some of the guidance for.
And we gave in the earnings call itself, where we're basically expecting.
It's hard to have visibility and the back half for the year, we're highly confident and the rebound, but it is going to be coming all the early indications are that it's there, but I think it's hard to precisely pinned on what Q3 and Q4, we're going to do so what we did do is give some perspective on what we expect out of Q2 and that is that our gross booking value and Q2 of this year will be.
And higher than in Q2, and 2019 and.
Our revenue rate in Q2 will be similar to that of 2019 and that our EBITDA will be our adjusted EBITDA will be breakeven to slightly positive in Q2 of this year. So I think those are kind of the key things.
He said as rebound comes back the pace at which it comes back and the geographies and come back we'll all affect the mix on those <unk> and we do expect to edr's to moderate, but it's hard to perfectly pinpoint down.
And the specific of that mix.
Okay. Thanks, guys.
Yeah.
I will now turn the call back over to the management team for closing remarks.
Alright, well. Thank you everyone for joining us today I just wanted to recap we are really proud of our strong Q1 results. We believe they are a testament to our focus and adaptability.
<unk> of our model and we've shown over the past year that as the world changes Airbnb and adapt.
I think we're now well positioned for the travel rebound ahead as travel return Airbnb will be ready and our host will be ready as well so.
So I hope you'll join us on May 24th where we will share insights on how travel is fundamentally changing and announce the most comprehensive update to Airbnb service and 12 years. Thank you and we'll see you then.
This concludes today's conference call you may now disconnect.
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