Airbnb raises revenue forecast, credits AI for cost cuts

Airbnb shares climbed 9% in premarket trading on Friday after the company raised its full-year revenue growth forecast, easing investor concerns about the impact of the Middle East conflict on global travel. The company now expects revenue growth of at least the mid-teens, up from its earlier projection of low- to mid-teens.

Despite the ongoing war in the region, which has entered its sixth month, Airbnb's finance chief Elinor Mertz said on Thursday that the company continues to see strong underlying demand globally and has not factored any significant disruption into its current-quarter outlook.

The upbeat guidance comes as hotel operators and online travel agencies lean on steady leisure demand and upcoming international sporting events to offset potential headwinds. Airbnb also highlighted its progress with artificial intelligence, a technology that had raised fears of disruption for traditional travel firms. CEO Brian Chesky called AI "the best thing to ever happen to Airbnb," noting that customer support costs per booking fell about 16% year-over-year, partly due to improvements in its AI assistant.

Analysts at Needham said Airbnb has been rebuilding itself to move faster with AI, while Wedbush noted that such initiatives are accelerating product launches and driving cost efficiencies. Morningstar analyst Dan Wasiolek pointed to Airbnb's expansion into hotels and experiences, with room nights growing at three times the rate of homes, potentially adding billions in incremental bookings by the end of the decade.

Airbnb reported second-quarter revenue of $3.61 billion, beating estimates of $3.57 billion. D.A. Davidson analysts called the company the "best-positioned online travel agency" to navigate regional geopolitical turmoil, inflation, and AI-related traffic risks, citing its strong U.S. revenue exposure and diverse lodging inventory.