Airbnb is signaling a strong third quarter ahead, buoyed by sustained demand for summer travel — but the company is also preparing for a slowdown in growth as it faces tougher year-over-year comparisons in the final months of 2025.
In its latest update to shareholders, the vacation rental giant projected third-quarter revenue between $4.02 billion and $4.1 billion, with the midpoint surpassing analyst expectations. The company also expects the growth rate of nights and experiences booked to remain consistent with the 7.4% increase it saw in Q2 — closely aligned with Wall Street’s forecast of 7%.
Travel Demand Remains Strong, But Momentum May Soften
Airbnb said it saw encouraging signs in July, particularly in North America, where travel activity accelerated. However, the company acknowledged that the second half of last year saw an unusual surge in bookings due to pent-up demand, which will make maintaining growth more challenging as 2025 progresses.
Despite the solid outlook, Airbnb shares fell 6.3% in after-hours trading, as investors reacted to the company’s note of caution about year-end growth rates.
$6 Billion Share Buyback and Strong Cash Flow
To bolster shareholder confidence, Airbnb announced a $6 billion share repurchase program, following a second quarter that delivered $1 billion in free cash flow. Revenue reached $3.1 billion, outpacing estimates of $3.03 billion, while net income hit $642 million, exceeding forecasts of $599.3 million.
Global Expansion Paying Off
Geographically, Airbnb saw double-digit growth in Latin America and the Asia Pacific. Notably, Brazil and Japandelivered strong performance, fueled by localized marketing and product adjustments that attracted first-time users.
In contrast, North America saw more modest gains, with low single-digit growth in nights booked. The company noted that domestic travel continued to dominate bookings in the region.
Without the drag from North American softness, Airbnb says total nights booked would have grown by double digits globally.
Diversifying Beyond Stays: Experiences and Services
Airbnb is betting big on its new verticals — including Experiences and à la carte Services like chef bookings, fitness trainers, and photographers. Since launching in May, the platform has received more than 60,000 host applications for these offerings.
CEO Brian Chesky has previously indicated that these verticals could contribute $1 billion or more annually once fully scaled. The company reaffirmed plans to invest $200 million into developing these new business areas — consistent with earlier projections.
Loyalty Program in the Pipeline
Airbnb is also exploring ways to enhance customer loyalty through a membership-based offering. While the company ruled out traditional points-based programs, executives hinted at a more innovative and experience-driven solution.
“There is a lot of upside if we were to have a program,” said Chesky during the earnings call. “But it won’t look like anything you’ve seen from traditional hospitality players.”
Although there’s no immediate timeline, the company confirmed that a loyalty or membership offering is under active consideration.
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IMAGE: Reuters
