Airbnb expects a drop in bookings due to the delta strain: what will happen to the company’s shares

Airbnb expects a drop in bookings due to the delta strain

Airbnb, a rental company, expects the number of bookings on the site to decrease in the third quarter compared to the same period in 2019. Following this announcement, the company’s shares fell 4%. Investors can make money on Airbnb in the long term, analysts say

What happened?

Airbnb, an international rental service, has warned investors about a possible drop in bookings in Q3 2021 compared to the same period in 2019 due to the spread of a new strain of coronavirus.

What does it mean?

Despite the fact that in the second quarter of 2021, Airbnb’s revenue grew by almost 300% year-on-year, to $ 1.34 billion, the company management fears that the delta strain of coronavirus could negatively affect the business. Revenue in the second quarter rose thanks to a rebound in tourist traffic, according to a letter to shareholders, which Airbnb released along with its quarterly financials. Over the past few weeks, the company has set the record for the number of concurrent guests staying in Airbnb-rented apartments in the United States since the start of the pandemic. But there will be fewer bookings in Q3 2021 than in the same period in 2019, although Airbnb expects to see record quarterly revenue. The impact of COVID-19, as well as the emergence and spread of new variants of the virus, including the delta strain, will continue to influence travel behavior – how often they book and cancel, according to Airbnb.

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The company is already seeing the negative impact of the new restrictions due to the spread of virus variants and the slowdown in vaccination rates on the number of booking cancellations. For example, due to a sharp increase in the number of diseases after the spread of the delta strain, the Ministry of Health of Israel at the end of June again obliged residents of the country to wear masks indoors, and also recommended wearing them outdoors during public events. France in mid-July imposed restrictions on unvaccinated citizens due to a new strain of coronavirus – they were banned from visiting cafes, restaurants and other public places without a “health passport.”

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