It’s official. People can travel again. The US lifted its travel ban on Nov. 8, and this will likely lead to a slew of travelers into the country. The ban which lasted for 19 months is gone and visitors from 33 countries can now visit the US again. Hotels and travel companies like Airbnb (ABNB) are likely to see a massive surge in bookings.

Hyatt CEO Mark Hoplamazian on Yahoo Finance Live said, “The day the Nov. 8 date was announced, we saw an instant surge in bookings. By the way, this week was up 50% overnight in terms of bookings. It just demonstrates what we have seen in virtually every segment of our industry, which is there is tremendous pent-up demand for people to get back on the road.”

For Airbnb, this means a lot of stays getting booked in the US to complement its stays getting booked in the rest of the world. The company is all geared up to take on the new arrivals.

Not Just a Competitor to Hotels

A Nov. 9 report by Airbnb detailed how travel is changing in the post-pandemic world. The report surveyed 7,500 people across five countries. The two biggest takeaways the travel company garnered from the report were:

1. Around “38% of self-identified hybrid/remote employees say they would rather quit their jobs than go back to work in-person full-time.”  
2. Nearly half (45%) of nights booked on Airbnb were for at least one week, compared to 38% two years ago.

The report also said, “From July to September, 20% of our nights booked were for stays of one month or longer. Guests this year are spending more on these longer stays now than at any point in Airbnb history.” Older adults aged 60-90, (most likely retirees) are using long-term stays on Airbnb more than any other age group. What this means is that Airbnb isn’t just competing with hotels anymore. It is competing with landlords for long-term rentals.

The last year saw over 100,000 guests staying on Airbnb for at least three months. At least 50% stays in a dozen destinations including, Bangkok and Phuket in Southeast Asia, Buenos Aires in South America, and San Francisco and Arlington, Virginia in the USA were for long-term.

The company has launched a slew of tools to make it easier for both travelers and hosts as people seem to be undergoing a fundamental change in their habits. One of the tools is a translation tool that will be capable of translations in 60 languages. This will help in listing descriptions and reviews, especially in Europe and South Asia where there is a high demand for cross-border travel.

The company also launched “AirCover” insurance that covers pet damage as guests are increasingly traveling with pets. 

Stellar Q3 2021 Numbers

The fact that Airbnb had shrugged off the effects of the pandemic earlier was evident in its Q3 2021 numbers. This quarter has typically been the company’s largest quarter due to the summer travel peak.

At $2.2 billion, Q3 2021 revenue was the company's highest ever. It was "up nearly 70% year-over-year and surpassed Q3 2019 levels by 36%—demonstrating the strength of the travel rebound on Airbnb."

At $834 million, Q3 2021 net income was its highest ever. It said the number was "driven by our significant top-line recovery, our continued expense discipline, and travel seasonality. Relative to the same prior-year period, net income increased 280%." Compared to the same period in 2019, the number was up 213%.

Adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) came in at $1.1 billion, another record for Airbnb, 120% higher than the corresponding period in 2020 and 251% higher than the same period in 2019.

These high numbers over the summer were possible because Airbnb reached a major milestone of 1 billion cumulative guest arrivals. Clearly, as more people have got vaccinated and travel restrictions began lifting up in the rest of the world, more travelers are choosing Airbnb homes. The Q3 shareholders’ letter said, “Host earnings reached a record $12.8 billion in the quarter, and active listings continued to grow.”

If Q3 numbers are any indication, the holiday quarter should not slow down Airbnb a lot. People are not traveling in the traditional way anymore. The work from home revolution has caused people to change the way they travel. Families aren’t looking at traditional weekend trips. 

Airbnb introduced a new tool called Flexible earlier in 2021. This is “a whole new way to search on Airbnb when guests are flexible about when or where they travel.” In such a short time, guests have used Flexible more than 500 million times.

“Over 40% of gross nights booked in Q3 2021 were within 300 miles of home, up from 32% in Q3 2019, while gross nights booked to rural destinations increased more than 40% in Q3 2021 from Q3 2019,” said the shareholders’ letter.

Experts have already revised their share price target numbers upwards for the stock. According to an Investing.com report, “Piper Sandler increased Airbnb's price target to $215 from $175, Susquehanna increased the price target to $235 from $200, Loop Capital lifted it to $250 from $205, Wells Fargo increased it to $225 from $210 and DA Davidson boosted it by $56 to $230.”

The stock closed on Nov. 12 at $206.54. All analyst targets indicate a potential upside of at least 13% from its closing price. Chances are just like pent-up travel demand, Airbnb stock can surge too.