Airbnb plans $6bn in new share buybacks as it looks to ‘reinvent’ itself

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Holiday rental platform Airbnb launched a $6bn share buyback programme on Tuesday as it said 2024 would be an “inflection point” for its business.

After having spent three years fine-tuning its holiday rentals and experiences business, Airbnb said it would push into new areas as part of a “multiyear journey” that would help drive growth.

Asked by an analyst whether the company plans to build its offerings in a similar way to Amazon —which started in online retail and moved into a number of other markets including logistics and cloud computing — chief executive Brian Chesky said that the company’s initial new products would focus on its core business.

“I think that Airbnb can go far beyond travel in the coming years, but I think we’re going to start with our core. We’ll start with travel, and then down the road we can move beyond travel,” Chesky said.

The company is focused on building its offering in countries such as Germany, Brazil and Korea. A new “Guest Favorites” feature, which directs users to the 2mn best-reviewed properties on the platform, was launched in November and is aimed at luring more customers away from hotels with its quality guarantee.

The share-buyback scheme comes on top of an existing programme under which Airbnb purchased $2.25bn of its own stock in 2023, the company said as part of its earnings report.

Buybacks have allowed Airbnb to offset the impact of employee share awards vesting. At the end of December, Airbnb’s fully diluted share count had fallen to 676mn from 694mn at the end of the previous year.

Airbnb shares, up about 25 per cent in the past 12 months, rose almost 7 per cent in after-hours trading.

Airbnb has faced increased scrutiny from regulators as its popularity has grown, including in New York, which imposed a de facto ban on short-term rentals in September. Airbnb has not quantified the impact of the ban on its financials.

Its revenue growth is still healthy but has been slowing in recent quarters after getting a boost from the pent-up travel demand that was unleashed as the coronavirus pandemic receded.

Fourth-quarter revenue of $2.2bn was up 17 per cent from the year before, the slowest pace of growth for any quarter in 2023 and largely in line with analyst expectations. Revenue growth is expected to dip to between 12 per cent and 14 per cent in the current quarter.

Airbnb registered a surprise net loss of $349mn in the fourth quarter, largely the result of about $1bn in one-off tax charges related to a long- running dispute with the Italian authorities that it settled last year.

Stripping out the impact of the charges, adjusted net income was $489mn, ahead of analyst forecasts for $450mn.

The number of nights and experiences booked rose 12 per cent to a record for the final quarter of 98.8mn, with guest demand strong in all regions, “especially among first-time bookers”, Airbnb said. 

The number of long-term stays of 28 days or more also continued to grow, and the number of trips lasting three months or longer rose almost 20 per cent compared with the same period last year, the company said.

Adjusted earnings before interest, taxes, depreciation and amortisation of $738mn beat forecasts for $646mn, helped by “discipline in managing our cost structure”, Airbnb said.

With strong free cash flow, acquisitions are also part of the company’s longer-term strategy, but “we are going to be very, very thoughtful, and it’s always going to be build, then partner, then buy, probably in that order of prioritisation”, Chesky told investors.

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