Airbnb Inc (NASDAQ: ABNB), an online platform that helps tourists find temporary accommodations, grew by roughly 10% in the first weeks of trading in 2021. There is a rush among investors to buy Airbnb shares at a discount, as Airbnb is expected to be one of the primary beneficiaries of the global economic recovery and the return of mobility.
COVID-19 has made a serious impact on the global tourism industry. The cancellation of many vacations and business trips has pushed down demand for short-term rentals in hotels and apartments. However, positive news regarding the vaccine suggests that the tourism industry will recover by the summer of 2021, if not completely.
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The entertainment industry is experiencing a slowdown. For instance, Australia received 7.85 million visitors to Airbnb’s Australian website in December, double the number expected for August 2020. Google reports that demand for housing has increased by 20-30% over the last three months.
Based on Hilton’s survey in 2020, 95% of US residents are now postponing travel due to the pandemic, but it is expected that 94% will travel again once the restrictions are lifted.
Therefore, Airbnb Inc (ABNB) benefits from high deferred demand. Airbnb is among the leaders in the online booking of accommodations and managed to sustain its revenue stream during the pandemic.
On revenue of $219 million, sales for the third quarter account for $1.3 billion, which is down 18% year-on-year. Airbnb’s business may become even more active after the pandemic ends. That explains the interest investors have shown in the company, who believe it is a potential beneficiary of world tourism’s long-term revival.
Tigress Financial analysts recommended a buy recommendation for Airbnb stock on Monday, January 11. Airbnb, a company that has grown rapidly in its category and is the most recognized brand in the industry, is widely considered the best company. In the long run, analysts expect this to boost shareholder value.
Airbnb Inc (ABNB) launched a cost-cutting program in May of last year. Particularly, nearly 1,900 employees were laid off, about a quarter of the total, which will result in savings of $400 – $500 million annually. The company has also employed other ways of cutting costs. When demand returns, these steps will boost profitability.
