Wednesday, May 22, 2024
28 C
Brunei Town

Italian tax clash costs Airbnb

(AP) — Airbnb said Tuesday that it lost USD349 million in the fourth quarter due to an income tax settlement with Italy, but bookings and revenue rose, and the short-term rental giant said demand remains strong.

The company forecast first-quarter revenue that would meet or beat Wall Street expectations.

However, the pace of bookings growth is likely to “moderate” from the fourth quarter into the first, and the early timing of Easter could hurt growth in the second quarter, Airbnb said.

CEO Brian Chesky said on a call with analysts that Airbnb is “perfecting” its business — making pricing more transparent, reining in exorbitant cleaning fees, and reducing cancellations by hosts. Now it plans to go beyond its core.

Chesky said the company will build out its rental platform in countries where it isn’t as strong as the United States. He said that is already underway in Germany, Brazil and South Korea, and will soon be tried in Switzerland, Belgium and the Netherlands.

“But this is only one piece of a much bigger strategy because we have always believed that Airbnb was destined to offer more than just a place to stay,” he said.

Chesky, however, gave no details about the “multiyear journey,” only promising news late this year. Rivals such as Vrbo parent Booking Holdings and Expedia Group also make money from things like flight and rental-car listings.

The fourth-quarter loss compared with a profit of USD319 million a year earlier. The recent results were dragged down by USD1 billion in one-time tax withholding expenses and lodging tax reserves.

The vacation-rental platform disclosed in December that it would pay Italy’s tax agency EUR576 million (USD621 million at the time) to a case involving withholding from property hosts in that country. Airbnb does not admit wrongdoing, and company officials say they don’t face any similar liability in other countries.

Excluding the special expenses, Airbnb said it would have earned USD489 million.

Revenue rose 17 per cent to USD2.22 billion, beating the USD2.17 billion forecast of analysts in a FactSet survey. Bookings rose 12 per cent, and the average daily rate gained 3 per cent.

Airbnb forecast first-quarter revenue of between USD2.03 billion and USD2.07 billion. Analysts were looking for USD2.03 billion.

The company said demand remains strong, especially among new users of the site. Bookings grew 12 per cent from a year earlier, and picked up after “volatility” in October, when economic uncertainty and the start of war in Israeli-occupied Gaza raised doubts about travel demand.

Airbnb said its growth is picking up in less mature or “under-penetrated markets” including Brazil, where bookings made inside the country have nearly doubled since late 2019.

The value of gross bookings, at USD15.5 billion, was slightly higher than the USD15.2 billion forecast among analysts.

The San Francisco company added nearly 1.2 million listings last year, pushing its total to more than 7.7 million, with the fastest growth rates in Asia Pacific and Latin America.

The company said its board approved a share-repurchase program of up to USD6 billion.

Shares of Airbnb Inc. initially jumped in after-hours trading Tuesday, but then drifted lower, falling five per cent two hours after the end of regular trading.


FILE – The Airbnb app icon is displayed on an iPad screen in Washington, D.C., on May 8, 2021. PHOTO: AP