Q2 2021 Airbnb Inc Earnings Call
Benefited from our adaptable business model, which is able to meet the changing needs of our guests.
But we haven't just been sitting passively around bidding for travel to return.
For the past year, we've been relentlessly driving product innovation to meet this historic moment in.
As a result airbnb.
Airbnb has emerged from this crisis faster than others, and we're better positioned for the future of travel.
Now, while we recognize the persistence of Covid and the Delta variant.
We expect Q3 to be our strongest revenue quarter ever.
The fact that we expect Q3 revenue to be our highest revenue quarter ever speaks to the inherent resiliency of our business.
So now turning to our Q2 results.
At vaccination rates increased and travel restrictions lifted in Q2, we saw consistent strength in North America, followed by significant recovery in Europe.
One year ago in Q2, our business was significantly impacted with the onset of Covid.
Now like many others our year over year comparison to 2020 does show a dramatic improvement.
But.
What is most notable are our results relative to pre COVID-19 levels.
Across all key metrics, we nearly met or exceeded our Q2.2019 performance.
Q2 nights that experiences booked nearly tripled from a year ago.
More importantly, Q2 nights and experiences booked nearly matched pre COVID-19 levels in 2019.
Gross booking value of $13.4 billion.
More than quadrupled from a year ago.
And also shot up.
Above 2019 levels.
By 37% based on the recovery of nights combined with the strength of our ADR.
Meanwhile, Q2 revenue of 133.5 billion.
Also nearly quadrupled from a year ago.
And it exceeded 2019 levels by 10%.
What this demonstrates is an acceleration and a recovery from Q1.
Our Q2 results not only demonstrate our leadership in the travel rebound, but also our continued operating discipline.
Our adjusted EBITDA profit was $217 million.
Now this represents a 16% EBITDA margin.
This was more than $600 million of improvement in EBITDA from a year ago.
And it represents 20%.
Our 2000 basis points of margin expansion from 2019, and this is on a similar level of revenue.
Now over the past year as our topline recovered we consistently focused on improving our profitability.
For example.
Over the last four quarters.
We've improved EBITDA margins on average more than 20% every quarter as competitive periods in 2019.
Now that is a 2000 basis point improvement on average every single quarter.
And we've done this by improving our variable cost by driving up marketing efficiency and by very tightly managing our fixed cost that I'm really proud of these results.
What they demonstrate is that we are emerging from this crisis as a stronger <unk>.
And more efficient company.
Now turning to business highlights and travel trends.
Despite the continued impact of Covid around the world, we have seen clear evidence that travels recovery.
We're incredibly encouraged by what we've seen in Q2.
And what we've seen.
He is an accelerating pace of global travel, particularly in Europe.
As well as continued popularity of non urban a domestic destinations.
In Q2, we had the highest number of gross nights booked of any quarter in our history and.
And we just had the biggest night on Airbnb since the pandemic began.
Last Saturday night.
More than 4 million guests from around the world, we're staying in an airbnb.
That is more people in the entire population of Los Angeles.
And we're also seeing travelers once again cross borders and visit cities.
These two categories of travel have been historic strengths of Airbnb, and we're really excited to see them begin to recover.
But at the same time.
The way that people travel and live continues to change.
We believe that many of the new booking trends that emerge over the past year are here to stay.
People are traveling to many more destinations than before.
And when they travel they are staying longer.
We believe these two categories of travel are in fact year to date and as a result, what we focused on our product innovations that support these new ways that people travel.
You see many people have a greater freedom about where and when they travel.
And we've improved our product to better meet their needs are.
Our new search products offer guests the flexibility they want when planning and booking trips.
And finally, we're seeing more people around the world consider hosting.
We ended Q2 with the largest number of active listings in Airbnb history.
Now there are a couple of reasons for this.
First our.
Our demand is driving supply.
This is what's so powerful banner model.
For example in Q2.
Our highest supply growth was actually in high demand destinations.
And second our marketing and product initiatives.
Been really accelerating to support hosted recruitment and they are working.
So now let me go into a little more detail, what we've been doing to prepare for and support its travel recovery.
As a reminder.
Our single priority in 2021 has.
<unk> has been to prepare for the travel rebound to do this.
We've been perfecting the end to end experience of our core service and this includes four themes.
Educating the world about hosting.
Second recruiting more hosts third simplifying the guest journey and finally, delivering the world class delivering world Class service.
So let me just briefly give you an update on how were executing on each of these four areas.
So first retrofitting the world about what makes airbnb different and that is hosting.
In Q1.
We launched our first large scale marketing campaign at five years made possible by host and.
And we expanded this campaign to Q2.
We're educating guests about the benefits of being hosted and we're also inspiring more people to become host now.
Now we continue to be really encouraged by the results of this campaign in terms of traffic first time bookers interested in hosting and brand favorability.
Second.
We are recruiting more host and we're setting them up for success.
On may 24th just a few months ago, we launched a completely redesigned host onboarding flow that makes it simpler for anyone to start hosting.
This new flow has made it faster to become a host which has helped drive our listings growth in Q2.
Third.
We are simplifying every part of the guest experience.
On may 24th we expanded the tools for guests to offer more flexibility when they're searching for a place to stay.
We announced flexible dates flexible destinations and flexible matching and all three of these features are to support the new ways that guests are looking to plan and book trips.
And finally.
Whenever our host or GAAP need us.
We must deliver world class service. So we recently launched a redesign help center, we've more than tripled our supported languages and we've updated our safety resources.
All of this is to ensure that we are supporting our guests and hosts whenever they need us.
So.
To summarize <unk>.
Travel is recovering.
And our Q2 results show they are leading the way for.
For the past year, we've been preparing for this rebound was driven product innovation support changes to the way people are traveling and living all over the world and as a result, we've emerged from this crisis faster than others and as a stronger more efficient company.
So with that.
Prior to answering your questions.
As a reminder to ask a question you need to press star one on your telephone to withdraw your question press. The pound key your first question remind how mark mahaney with Evercore ISI.
Okay. Thanks.
Talked about having this record day I think there is I think you said last Saturday and yet I think.
Youre also.
Maybe appropriately cautioning about third quarter trends in variance in Delta. So just kind of put those things together record days sounds like things are good but I'm sure. There are some warnings out there can you be more specific about what youre seeing thats, causing them to be just a little more cautious about Q3 in the back half of the year. Thanks.
Yes, Mark. Thank you for the question before I hand, it over to Dave Let me just say that yes, we had a record it was more than 4 million guests staying with host all over the world and we're really encouraged that this is the biggest night we've had since the pandemic began and the only other thing I'll. Just say is that we have an incredibly adaptable model. So.
However, travel changes, we'll be able to meet that demand, but Dave why don't we talk about what we're seeing right now.
A lot of the trends we're seeing in Q2 are consistent with some of the trends. We saw in Q1, and Q4, where people continue to be flexible with while we built all these flexible tools, where it because 40% of searchers are showing flexibility and these are the data location and people are traveling to more destinations and people are staying longer and one of the elements as it were.
Seeing the trends of long term stays which we highlighted as a key strength in Q1 stays at 28 days longer remain being one of the largest and strongest growing parts of our business. So that was 19% of our nights booked in Q2. Following the 24% in Q1, just as the mix of short term stays kind of rebounded strongly.
In Q2.
We've seen a strong increase in month over month performance across Q2. So April to May to June nights booked all were strong leading in anticipation of the summer peak travel in July we've seen some of the pullback in demand, but it's likely due to summer peak and possibly parts of the delta bearing but.
All of those lead to still being the Q3 revenue the nights that people stay in the revenue that we recognize will be the strongest ever can.
Currently our profit in Q3 will be the strongest stomach.
Okay. Thanks, Brian Thanks, David.
Thank you Mike.
Your next question the line of Stephen Ju with Credit Suisse.
Okay. Thank you so much.
So Brian.
A follow up to the product announcements that you had and I think that's fair.
When you close to that session in.
It seemed like to me youre, giving consumers broader recommendations and if this is really successful and hopefully something that they really didn't know that they even really want to it so.
It's probably really early.
Anything you can share in terms of what their response has been are they delighted with what youre showing more or do you still think you have some.
Congrats you need to do.
Thanks Steven.
Yes, Steven Thanks, It's a great question.
Let me preface this by saying the following there had been a major paradigm shift in how people search for travel on the Internet.
Before the pandemic the waste search was on the Internet for travel was the vast vast majority of people came to our website travel website typically on otas and at what type and location. They had a location in mind and they go to date to meet checking type of gate to check in and indeed to checkout. So this is really fixed search people know.
Where theyre going to go with the pandemic I think it's safe to say the world is never going back to the way. It wasn't that meets travel isn't going back to the way it was and the way travel is evolving is that people because they're able to work more remotely for more flexible and what we are seeing Stephen it's up 40% of our guest have flexibility about where.
Or when they travel and to give you. One example of one of the things. We've done flexible dates we have a couple of flexible data features we have a feature that you can tap on flexible and you can say I am looking for a place for a weekend a week or a month sometime in the next few months and what we have seen.
And sort of flexible these feature its being used more than 500 million times. This is a feature has been used a half a billion times simply since we launched these features in the beginning of the year.
You've also seen a very.
Big uptake in use in use of flexible destinations as well where people if their flex about where they travel we can recommend them to where to go now. This feature. These features are really important the reason, they're really important isn't just because this is a paradigm shift in how people are searching for travel but it is also important because this means.
That we can point demand to where we have supply and this is a major major shift for our business and so we are going to continue to tweak the products. When you have hundreds of millions of data points on the feature you learn and we're continually innovating, but I'll also just say that this is just the very beginning because we werent. Our team is not going to rest on our laurels.
We are working really really hard to continue to offer more flexibility to GAAP and continue to be able to inspire them and point them to where we have available supply.
Thank you.
Okay.
Next question, Michael Jed Kelly with Oppenheimer.
Hey, great. Thanks for taking my questions just on your work from anywhere trends you were just mentioning Brian can you provide anything youre seeing in sort of the shoulder season that kind of gives you confidence or are you seeing any improvement there and then on the yield management capabilities to providing the host of new dwarf any of that.
Providing the ADR uplift.
Yes, Dave actually you want to take these questions.
Sure maybe I'll start with the yield management the majority of the ADR uplift that we're seeing is being driven by mix continues to be mix. The strength of our rebound has been in North America and Europe. Those have higher ADR is it's been a non urban which was higher ADR in urban and in larger accounts.
Larger homes. So the majority of the ADR has been driven by that.
To a lesser extent a newer trend that we saw in Q2 was.
Some pricing pressure in peak markets that are highly constrained for the summer, but that will still.
Minority relative to the overall mix. So ADR has not really been driven by futures will overtime, our ADR on a revenue to gross booking value adjusted basis, where you line them up at the same time of booking has been very consistent over time I think there are opportunities for us to increase our monetization revenue.
Opportunities whether that be discussed travel insurance may be promoted listings or other things that we could do.
Don't see those as a perishable opportunities, which are kind of evergreen opportunities and instead, what we're focusing on right now as Brian has talked about is the travel rebound and making sure that we are addressing the need to kind of orders today and their needs today are the additional flexibility that they have and where and when they travel so 40% of our searches in Q2.
To actually have flexible dates or flexible destinations, which is why we built those tools and capabilities and seeing that strength and so in terms of the work from anywhere trends.
I think that we're seeing that people are continuing to find Airbnb is the best place for them to be able to both live and work in one of the things that.
We launched in Q2 is directly in response to People's demand there it sounds small, but I think it's a really unique item, which is allows hosts to measure the speed of the Wi Fi and then actually posted on their listing and Thats because gas were wanting to know how easy will it be for me to how good the likelihood of it kind of worked in this location. So I think.
That's kind of a unique small element that can assure with how we're innovating in order to kind of support these are broader travel trends. So what we do know is that people are incrementally more flexible if we can take a one hour call on a Thursday.
<unk> to be able to do a longer weekend with the family that maybe historically, you've been kind of stuck in the office to kind of go do and so we believe that all of these kind of trends will just continue to creep to airbnb and be a tailwind for our business going forward.
And I'll just add one more really interesting fact.
Not long ago, we did a contest online.
On social contest that allowed people to apply to be able to live on airbnb and to be able to be part of this context, you have to fill out an application and it takes a while to fill out.
We got 315000 applications.
For people wanting to live on Airbnb stringent 15000.
What this says is that travel is never going to be the same again.
It's completely opened up now when we started airbnb.
Like stays a longer than a month really wasn't a major part of our business. It really wasn't a major use case for us to be able to serve.
But.
Flexibility is now a permanent part of travel.
Just a permanent partner because that's all we have to believe is that Jim is here to stay and we believe assume it's here to stay we believe that flexibility and remote living here to stay and therefore, it's pretty.
It's pretty obvious that what would happen is that we're going to continue to see more and more longer term stays.
I think this is going to help us smooth out our seasonality over the coming years to come.
Thank you very helpful.
Yes.
Next question the line of <unk> Khan with <unk> Securities.
Yeah, Thanks, a lot.
You guys mentioned some slowdown in the nights booked in the third quarter.
Just wanted to.
You had some color on how that looks like maybe can you talk about July and August compared to the second quarter.
And how does that look across the country with more pronounced in the U S versus Europe or.
Understand.
David I'll take this one.
Sure I mean again, what we saw in Q2 was very strong bookings growth in advance of the third quarter kind of peak travel season. We saw this kind of in the depth of Covid in 2020, as well people are wanting to travel they want to get out of their homes and they especially want to do that in the summer and so we saw a lot of peak travel demand coming in Q2. So.
As we exit Q2 income into Q3, we have a combination of fewer.
Fewer bookings for the fall just given given the nature of some of the seasonality and any kind of impact potentially on COVID-19 concerns going into early Q3. So we're not seeing a substantial deceleration always identified in the outlook is that our knights and experiences booked in Q3.
Will be lower than in Q2, given the extreme strength that we saw in the business in Q2, but we continue to be very bullish on the business as I said the the revenue that we're going to have in Q3 will be the highest ever along with the profit we're going to be the highest ever.
So the business remains very strong and what we're seeing is that people want to travel and they are really resilient and finding ways to travel one of the benefits that we see with Airbnb.
They have to hop on a plane or across the border in order to travel with Airbnb.
A big part of our strength has been and nights with less than 300 miles that continues to be one of the strongest parts of our business.
And then in Q2, we saw strengthening where when the faster parts of Boeing was drilling of 300 miles longer.
An increase of urban nights booked and so some of those trends have.
<unk> started to pick up to more kind of historic levels. So I'm very bullish on.
The long term view of our business for long.
Got it.
Clarification on this.
So Don with the Delta there in terms of spending.
Got it.
Possible that people are getting more cautious on the new oven.
One thing the Optionality to maybe canceling the last minute could bandwidth eroding some demand or is it maybe more like a traditional hotel types group was down for like literally they're neutral or something like that.
Again.
We feel like the ability for airbnb to provide the kinds of stays and experiences that people desire all around the world. It remains incredibly strong we've done the the best way for people to kind of travel and Lou through Airbnb throughout the pandemic and I think with the tailwind that we've talked about the penguins of flexibility tailwind.
People staying longer until an agreement of how people are traveling for business in the future are always that they will travel more likely with airbnb for the longer term with these travel trends.
Are directly supporting the strength of <unk>.
Airbnb business.
Got it.
Thank you.
Your next question the line of Brian Fitzgerald with Wells Fargo.
Thanks, guys. We wanted to ask you about the growth Youre seeing in house.
Maybe particularly.
Particular high demand locations any way to characterize the new hosts who are coming online maybe that the level of professionalism.
<unk>, maybe it's a better word versus the rest of your base and.
And how much of their calendar, they're making available to you or these pros or are these people who are looking at doing this seasonally or opportunistically, just trying to get a feel for that.
Thank you Brian for the question, Dave before I hand, it over to you let me just kind.
Kind of recap a couple of high level things about our host community number one we have more than 4 million host 90% of them are individuals and most of them couldn't have hosted if not for the tools, we provide and what we saw in Q2 was that we had the fastest listing growth where we had demand and the reason why is because we.
Individual host as they get book word of mouth, typically increases and they often tell their friends, but the other thing that we've often seen as more guests. If you become flexible we're able to point demand rehab supply now specific to your question about the nature of the hosted we did add in Q2 and whether they were individuals professionals gave you want take that.
Yes, we continue to see 90% of our hosts are individual hosts and that remains to be the case. So as we continue to add new individuals and this is where we focus on or do we focus our tools or capabilities to uniquely enable individual host to be successful in hosting and airbnb and when they come on Airbnb the vast majority of their list.
States are unique to Airbnb and that has remained the case in Q2, where the vast majority of our new hosts coming on or off.
Individuals Thats, our focus thats, where were going to build the tools and capabilities in those areas, we'll continue to see.
Thanks, Brian and thanks, David I appreciate it.
Thank you Brian.
Yes.
Your next question the line of Colin Sebastian with Baird.
Great. Thanks, guys and nice to see the progress on listings growth.
But first off just in terms of the trend in <unk> and the commentary in the letter is that something that is a moderation there is that something you're already seeing in terms of bookings or is this more of a seasonal trend you expect to happen as summer holidays giveaway too.
A different profile of travel and then secondly on the EBITDA margins.
Should we think about the sustainability of those in the context of a step function higher from this from this point or are there other investments in the quarters or you're ahead that will moderate some of that near term leverage we're seeing thanks.
David I'll take both of these.
Sure.
Trend in ADR again, the vast majority of the ADR has been driven by mix and so on.
As other parts of the mix towards urban and maybe towards Latin American Asia changes and reverts to more historic levels. We will see ADR is moderate but that will be purely as part of mix.
And.
The other parts of the business come back and they have that lower overall kind of edr right. So the strength of North America and Europe. We believe to continue to remain strong and then other parts of the business come back then the mix comes out in the AVR is moderate so that's what we're kind of indicating.
And in terms of the EBITDA margins I think we're all we're proud of the progress we're making EBITDA in accelerating towards our long term. We've stated that we can achieve 30% or more EBITDA margins over time, clearly we've accelerated our rate there I think that a piece of that is clearly the improvements we've done on <unk>.
<unk> costs marketing costs improvements are variable costs. We also see some benefits on the higher ADR rates as well and so overtime, we will see some.
Variation in our EBITDA margins kind of over time, but I think what we've demonstrated is.
The capability to dramatically expand those margins and I think it just proves the point that we've kind of talked about more globally, which is we can achieve the 30% margins more and now we're actually showing how we can do that.
And I think the one thing I'll just add on one thing I'll just add on the efficiency of our business and.
And we said this in the letter I also mentioned this in the opening comments, but.
No.
Covid was the Crystal ball moment for the company and in that moment. This company, we've gotten significantly more disciplined and much more efficient and I think that we've all seen the incredible benefits of protest because we've put our very best people on the most important problems in the company.
We see this not only have margins improved but actually we're able to move much more quickly we can pivot and I think this explains why we were able to announce and launch more than 100 upgrades on.
On the heels of our IPO in time for the travel season, and so I think that youre going to see continued acceleration of product innovation because of our disciplined and because of our focus these are lessons that.
And that we will never ever forget these are lessons that will leave in Delaware marks for this company.
Great color Thanks, Brian.
Thank you.
And your next question line of comparison with Keybanc capital market.
Yes.
Great. Thank you very much.
<unk> date is rolling out how is the booking window change are there more instances of last minute. They are coming into play and then the second question you provided a lot more value to host this year conceptually how are you thinking about the factors behind when the right bandwidth to increase take rate. Thank you.
Thank you for the question.
So why don't Jonathan why don't Dave I'll take the second question around take rate for host and then you can take the first question about flexible dates and how that's affected the booking window. So with regards to factors to be able to increase take rate.
And kind of see what Dave said before we think there is one of our guiding principle is that we wanted to make sure that every single year, we are providing incrementally more value to host and we're charging them.
The name of the game is to make sure that our really strong Bismarck continues to grow and that means that hosts feel like they have the very best opportunity to host on Airbnb, we want them to always feel like we're giving them more value than we're taking away. So taking so that's number one number two I do think there's a lot of opportunities for us to be able to increase take rate and if we do.
That I think the way we would think about that is by charging for some incremental services that we can provide for host and the more of that host really rely on airbnb to be able to.
Continue to grow their business the more we think theyre going to be willing to be held to.
Buyer.
Participate in new services and offerings, but the way we think about this is this is a non perishable opportunity. So as Dave said, we have a number of years in front of us where we can continue to look at offering new services, but we are focused on this year.
This unprecedented travel rebound that's upon us and so we've worked really really hard to simplify the guest experience to introduce more flexibility for guests to make it much easier for host to come on the platform. So that we get thousands of doubt more hosted in time for the travel season.
So with that I know, if Dave do you want to talk about the.
The booking window for flexible dates.
What we saw in Q2 is actually a fairly stable booking window in line with Q2 of 2019 was actually a little bit shorter booking window than Q1 of this year, but thats largely been due to seasonality. So yes, you're right, but during COVID-19, we've seen variations in booking windows, where.
Last year in Covid, the booking windows would shorten when people felt more only with Brooklyn, They felt more confident in Spain, but it's interesting Q2 bookings.
Booking windows being consistent with our historical numbers.
Thank you.
And your next question the line of Justin post with Bofa.
Great. Thanks, a couple of questions.
You mentioned a lot of positive trends for the company I Wonder if you have any thoughts on the market opportunity or the Tam for alternative accommodations versus hotel nights is that changing and do you think alternative accommodations.
It's growing.
Maybe any thoughts also on your opportunity within the hotel bookings and then second I'll take a swing at this.
Any updates on actual supply metrics lycos or.
Active listening tour is that something will get once a year. Thank you.
Dave.
Sure on the latter on display metrics I think we've highlighted what's really important to remember that we do not need to grow supply one to one for revenue growth and why is that just because we have millions of.
Listings all around the world and what we need to do is have the right listing for the right guest at the right time and as people continue to get more flexible on when and where they travel as we get better focusing those hosts on the flexible locations and dates that they have in mind, we're going to get better at utilizing the supply we have all around the world, but what we have highlight.
Is that when there is great demand in specific areas and that was in North America and Europe non urban we're very effective at growing up supply and that's what we saw in Q2.
The strongest growth in of our supply specifically in the areas of our strongest areas of demand and we do that both organically and inorganically through the all the actions that Brian talked about about making inspiring hosts and what the benefits are being being hosted arent being a host.
Talking to them about how they can make it easier for them to host and then having existing hosts help new posts be successful. So those are all the ways will be driving it. So I think we will be talking about lifting and <unk>.
Currently as it is helpful to guide the overall direction of the business.
But not as a routine neutral because it's not the primary driver of revenue growth.
In terms of Tam for alternative versus hotels.
If you really think about airbnb.
Not just a travel company, where is it's all about travel and living and really any kind of stay any kind of a combination really.
Sure.
Full year lease can be accommodated airbnb and Thats what were seeing with the fact that we're seeing such strong growth in stages of 28 days or longer and but that was 19% of nights in Q2, and we highlighted in the letter the fact that even the might of seven days or longer.
50%, 50% of our night and so.
That is not hotels hotels average much lower maybe two one to two nights on average we're going to be four plus and 50% of our nights were up seven days longer. So clearly during this time period, we have taken share from traditional.
Accommodations and I think that a lot of these changes that we've talked about on the call today. The increased flexibility of how people are traveling and living I think that just actually increases the overall Tam of what Airbnb is able to address because if youre going to be staying longer if youre going to have more flexibility you're much more likely to want to stay hosted airbnb.
The amenities that you have an airbnb versus being in a hotel room.
Great. Thank you and I'll just add.
And I'll just kind of.
Just add.
Add to that I was just a little bit in addition to long term stays which is essentially an entirely new category that is not even really traveling its living which has I think been significantly expanded by Covid do you have a number of other dynamics happening.
People are traveling to many more locations.
And oftentimes people are now traveling to places don't even have hotels, so that would explain some expansion of Tam. There Theres also a general shift from business travel leisure travel because we think that as fewer people traveling for business and their home, they're going to have a greater desire to travel for leisure and Airbnb, obviously has a disproportionately offerings in digital.
Travel and again over the course of the pandemic. Many people millions of people in fact have tried airbnb for the first time and the most important thing about growth Airbnb. It's just got to try it because our retention is really strong and I think of what this says is that Airbnb is no longer an alternative.
Way to travel I think the term alternative combinations might be a data term because maybe it was appropriate 10 years ago 10 years ago. The Tam was significantly smaller you'd see what it is today just imagine what it could be 10 years from now and that's what we're focused on is continually increasing the market by continually adding more categories of travel to beat.
Can offer and making sure that more people know about this new way of traveling.
Great. Thanks, a lot Brian.
Thank you.
Your next question the line of James.
James Lee with Mizuho.
Thanks for taking my questions on the wholesale acquisition side. Obviously, you guys did a lot of upgrades there and did a great job ramping up with things this quarter and just curious.
The areas of host acquisition or are you looking to improve kind of going forward and also secondly.
In April we are.
Where you are more dependent on cross border travel.
Are you, making any adjustments at the shipyard demand domestic states.
Hey, James Thanks, I'll answer the first question and Dave can answer the second question about APAC. So with regards to host acquisition Theres a number of things. We've done one of the things you mentioned is making it easier to host and so what we've done as I said is we've reduced the number of steps to turn really simple steps.
To become a host and this means that now the amount of time it takes to be able to lift on airbnb is reduced in half now. This is a really really big deal because the thing. We know is that the easier you make it conversion funnel the more people get through the funnel and we're talking about very small optimizations could deal thousands and thousands of new house, but in addition to that we've also been income.
And the top of funnel, we've been doing a brand marketing campaign. The company are made possible by house campaigns to target and recruit more host and will be seen in the five countries, where we've run this campaign traffic to the host.
Become a host page has more than doubled.
This has worked really really well and finally, one of the things that Dave mentioned is <unk>.
Number one we got to make sure we get hosting the funnel number two we have to reduce the number of steps, but three we wanted to make sure that we provide help is if anyone has any questions about hosting and so we've created is a host ambassador program.
We have many of our Super host who now.
Are able to provide assistance to our new house. So when they go through the funnel to go through the conversion flow to become a host if they have a question. We say hey would you like to talk to a super hubs and so we find that one of the strongest factors we've seen our host recruiting other host and this isn't a desk.
And the fact that the bigger be grow into bigger our guest space. The more that we get host because many of our guests also become host in fact, the number one source.
New host our prior guests over 30% of our hosted our guest and that number is continually increasing so these are some of the things we're doing to continue to increase the number of host around the world and obviously, we're going to continue to do a lot more in the coming years ahead Dave.
Yeah in regards to APAC I mean, it's amazing how resilient the domestic business has been all around the world. So we actually assume strength in domestic business in all regions I think the.
Issue has been in Asia, and Latin America have typically been more reliant on outbound and international travel to come back and so on.
But the domestic businesses within those countries that have actually been quite strong. So we're very happy with the performance of domestic we're just need more borders to open for those businesses to return to kind of pre pandemic levels.
Okay.
Great. Thank you.
And your next question will come from the line of Brent Thill with Jefferies.
Thank you I was curious if you could just talk a little about it.
Europe in more detail and kind of what youre seeing in that region and any any other observations you have as it relates to cross border. Thank you.
Hey, Dave.
Yes Europe.
<unk>.
What we've seen over the last several months.
The pent up demand that people have had to travel it kind of varies a bit by the travel restrictions within those countries.
Increasingly people's willingness to book in Q2, they are ready for their summer travel.
We saw particular strength in areas.
Areas of.
Spain, and France throughout the year throughout the quarter as people wanted to kind of travel for the summer season. So I don't have much more to say about Europe then.
And kind of what we've included in the water here.
Okay.
When you talk about like yourself did you did you see EMEA drop off more or less.
Consistent across regions when you start all over.
Bit of a pull back and you've been talking about.
So again the pullback we're seeing has been incredibly modest I really don't want to overstate I mean, what we're seeing is that Q2 was incredibly strong as people want to travel for Q3 and that our stage in Q3 are currently.
Strong, which is driving our strength in revenue and why we articulated in the Q3 revenue and profit will be the highest ever. So all that is it is incredibly strong.
It is kind of waiting and seem to see what the rest of the impact of.
Travel expectations are in Q3 for the back half of the year. So.
I don't know how much more that I can share.
Okay. Thank you.
Yeah.
And your next question line of Mario Lu with Barclays.
Great. Thanks for taking the question first one on the thing.
<unk> grew sequentially this quarter.
I'm, just trying to think through where the source of that growth will come over the next few quarters is there a component of urban and cross border listings that were deactivated during the pandemic that will be reactivated as pen will travel business any color there.
Hi, Dave.
If you think about it we have 4 million wholesale on the world, 90% of those individuals than the vast majority of those individual host based only on Airbnb and the most of their listings or their own personal property or maybe a second home that they have and so yes, I think one of the benefits. We have is that people don't get rid of their primary home or.
Not only is there a secondary home just because of the near term impacts of what we're seeing with Covid and so I think that fact that resilience of our individual hosts is what's leading to the fact that we have had stable.
Overall listings growth I think that's why we're quite proud about it in Q1, and then why we're seeing increases from Q1 to Q2 in the areas, where we have the most demand and so as people are ready to travel Bachelor urban locations.
And as people are going back to the kind of the historic strengths of Airbnb are hosts are ready to.
Bring them back.
I think thats been the power the inverse could easily been true where if you are more reliant on professional hosts.
They may be de listing not ready for the travel rebound and not ready to accept our desk. That's not the case with Airbnb or Airbnb hosts are ready to accept travelers whenever they are ready to travel.
And I think the key point again is that we've seen is as demanded markets increased supply in those markets correspondingly increase.
Got it and just a quick follow up in terms of the host campaign you guys mentioned.
Early signs of success.
Are there.
Anything to talk about in terms of existing closed and whether theres any any actions on your end to kind of retained prevent competitors.
Onboarding them to their platforms as well.
Yes, I can I can just share in data.
AD as well.
Number one we have seen is that the vast majority of host on your BBB because they are individual what they really just wanted to do is make sure they get enough bookings to fill their calendar and we found that we can get them enough bookings to fill their calendar that's not been a problem. This year and the other thing about our hosted they care about the quality of guest on Airbnb because these are mostly.
People.
Real homes their primary home or the secondary home they care a lot about what within their home and we provide a huge amount of traffic safety features and protocols to be able to give them.
And mind you. This is what they tell us and we really also work.
Providing best in class customer service for example on May 24th one of the things we announced as a dedicated Super hotline. This is something that our very best closed our super hubs have been asking for and I think the risk.
Section, but very very positive and so in addition to investing in our host one of the most important is you can do is to continue to invest in our super hubs and if we continue to invest in our superheroes there will be no reason for them to lyft anywhere else.
Yes. The <unk> program is really about is a loyalty program for host right.
And that's why we can tune vessels those are industrial city of over 800000 around the world I think that's really the key and then actually what we've seen with our host churn has actually decreased from what we saw pre COVID-19. So it was lower in 2020 than it was in 2019 is lower in 2021 than it was in 2020, so would be overall.
Right.
Continue to actually decline right now.
That's very helpful. Thank you.
And your next question line of Kevin Kopelman with Cowen <unk> Company.
Great. Thanks, a lot a quick one can you just give us an update on where your revenue take rate is today as a percentage of <unk> just given all the timing differences, it's hard to tell from the outside where that is.
Hey, Kevin.
Sure our take rate has actually been very consistent so if your time adjust our revenue to gross booking values. The take rate is approximately 15% and it's been very stable during <unk>.
So when you kind of adjustment.
Thanks, guys. Thanks, Brian.
Thank you.
Again, if you would like to ask a question. Please press Star then the number one on your telephone keypad. Your next question line of Deepak Matheson with work.
Hey, guys. Thanks for taking the questions.
I wanted to ask about how you think about the travel demand trends I know this COVID-19 uncertainty near term, but as you think about that.
Sustained benefit of pent up travel demand, there's still a lot of unspent dravo dollars out there even in markets, where we have seen good recovery like U S and parts of Europe. So as you think about second half and then even into 2022 do you think the incremental benefit that we're seeing near term from pent up travel demand likely to sustain our.
We'll go through a period, where the activity rebounds to normal travel levels and.
Recovery moderate to some extent not looking for any specific guidance, but curious to hear your thoughts on how you think about this.
Yeah. Thank you very much Deepak I think I can maybe take us a high level do you feel free to.
Chime in as well.
I think theres been a number of lessons from this pandemic and I think one of the general lesson as we tend to appreciate things more when they're taken away from us.
And I think that.
Not everything that was taken away from us during the pandemic did people appreciate but I think that travel was one of the things that people Miss the most from the pandemic in fact, we did surveys.
<unk> around the world.
And travel was the out of home activity that people Miss the most they missed it more than going to sport events more than going to restaurants out of home dining and other opportunities and we think that we have not even obviously capped into the pent up demand because obviously not everyone has been able to travel and also remember that before.
The pandemic about 50 persist about just almost 50% of our business was cross border travel and urban travel there hasnt been nearly the cross border travel recovery, yet that is possible in the coming year. So.
So I think what we're going to see it.
You can only imagine that as things get more under control.
In the coming travel seasons people will once again be more comfortable crossing borders but will be different. This time is that people will have flexibility. They didn't have before and so I think that we're very very bullish.
The future for cross border travel a lot of people haven't left the country, it's quite a long time and we think it's better to do so and this is in addition to many new opportunities to be able to travel in the city. So.
There's a lot of reason to be extremely optimistic in the coming years about what's going to happen to travel. There's many things that may not come back to levels before the pandemic, but one thing I think we know for certain is that travel well and I'll, probably bigger than ever Dave wants to add anything else.
Yes, I guess I'd just to add.
But remember that we're not really just a travel company we are about stays stays.
Stays at any time and I think we've talked about along the call today. The fact of the trends of 2008 days days longer.
Seven days and longer the flexibility that people have when they travel the fact that travel and living is blurring I think all of these are kind of incremental ways, which people will travel and travel on airbnb and so.
Clearly there is this pent up demand and people are yearning to travel again, but I just think all of these other tailwind of travel trends are really benefiting our business over the long term.
Got it thanks, Brian.
Thank you.
And your final question comes from line of Rob Sanderson with loop capital.
Oh, great. Thanks for squeezing me in question for Brian. So this year, you've been very clear in your focus in best of course to position for recovery for you'll basically be two years now.
Finally get through this where your priorities have been shifted in dislocated.
Would you expect to shift focus to shift as we get back to this new normal.
Development of experiences was really hamstrung and put a hole, but what are some of the more important focus areas that you would like to be spending time on or whats, maybe how the pandemic may have shifted those goals from what they may have been otherwise.
It's a great question, Rob I think there's four things number one.
What the pandemic has shown in this.
In this travel recovery that is upon us.
Is that I think the opportunity number one for acquired businesses pandemic and part of this is just speak.
Again more people are traveling to more locations many of which don't even have hotels.
Millions of people been introduced Airbnb.
And I think as cross border in urban travel recover youre going to see a huge amount of strength in our core so number one we have a lot of options.
Opportunity in our core and I want to make sure our team is really focused.
Two as we said long term stays as a huge boon to our business. This is this is the entire category of travel that really wasn't didn't really exist when joni and I started this company.
More than 13 years ago, but I think there's this entire new category of travel or travel and living it's blurring. So that would be number two three you mentioned experiences.
We saw it last year it could be a breakout year for experiences obviously the opposite happened we had to put the product on pause.
But I think that people are going to be yearning for experiences and the reason why it's a very simple one.
I think people are yearning to half.
A meaningful experience I think you can only sit at home and watch Netflix or.
Or.
Or streaming services for so many nights in a row before you actually want to get out of house and do something and be with other people and I think theres going to be a huge amount of pent up demand for people, having authentic experiences all over the world and then finally number four I think there is a huge number of opportunities to unlock more hosting.
We are now living in a world, where there is still great economic distress.
All over the world.
And so we think there's a huge opportunity to continue to unlock more hosting and we're going to take guidance from the creativity of our community.
The lifting entire homes and now.
Although they will start entire homes. They started lifting capsules on boats and treehouse that and so we're going to continue to take guidance from our host community as well and they will continue to point the way towards wherever you go.
That will really continue to innovate to unlock more hosting so those are some of our priorities. The good news is they're not really different it's what we've always been focused on I think it's just a renewed focus on our core that's amazing new opportunity around long term states, we're continuing to double down on experiences and will continue to unlock hosting.
We do all those things and I think we're going to look back on this is still the very early inning of a much much bigger business.
We're 13 years old, but I think that.
Yeah.
As a founder I. So you don't raise a 13 year old it would be great 14 year old you reason to be a great.
Adult many years from now and I think that Theres a lot of opportunities in this country is not good for us.
Excellent. Thanks, so much and enjoy Italy.
Thank you.
And I will now turn the call back over to Brian Cheskey for final remarks.
Well. Thank you everyone for joining us today I just wanted to say once again it was.
We're very very proud of the results for this quarter I think with this proves is that number one.
Our model is inherently adaptable.
Guest and Thats, because we have hosted in nearly every community offering nearly any type of space based at every price point and number two we're continuing to focus on product innovation, we're going to continue to build new products and these two things I think have demonstrated that this pandemic as hard as it has been for us and how it has been forever.
All around the world, it's made us a stronger more efficient and a better company and we are prepared for what's to come and for the future of travel in the future living so with that thank you all very much for joining US today, we'll talk to you next quarter.
This concludes today's conference call. Thank you for participating you may now disconnect.
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