Airbnb (NASDAQ:ABNB) stock has only been trading in the market for seven months, but has seen quite a ride.
I often used Airbnb to search for properties when planning a vacation and with the recent upgrades to their user agreements, I am certain to enjoy a better experience when I travel next. Airbnb has transformed the way we travel and has made it easier to book properties for long-term and short-term stays.
While the pandemic had a huge impact on the travel and tourism industry, Airbnb has come out of it as a strong winner.
ABNB stock opened at $146 in December and has witnessed the highs of $219 in 2021. The stock has shown volatility lately and was down even after the positive earnings results. It is currently trading close to $140. I am bullish on the stock and believe that it is a great long-term bet.
With that in mind, let’s take a look at the investment case for ABNB stock.
Pandemic Led Transition in Travel
There is a transition in the travel and tourism industry after the pandemic. The lines between work, travel and life have blurred and people are looking for long stays while they work remotely. The company saw a dip in sales in 2020 due to the pandemic but it made an impressive comeback in 2021.
The revenue has increased in the first quarter and the company has also introduced several updates to their service, making it convenient for hosts and travelers to book a property.
The main advantage that Airbnb had this year was that their locations were mostly open while the hotels were closed. This led to a dip in the revenue for hotels while Airbnb continued its operations. Further, travelers are going to choose private properties over hotels for safety and comfort.
The pandemic is not completely over yet and it may not be safe to walk into a hotel lobby where you will have to share space with others. This is where Airbnb will make a lot of difference and generate revenue through 2021.
The Future is About Family Travel to Rural Destinations
As normalcy returns and people resume travel, Airbnb will continue to be a top choice for many. According to the travel report by the company, summer travel this year will be about families heading to remote destinations and the company has already seen a spike in family travel in the last two years.
Airbnb had 42% night bookings for rural destinations in 2021 as compared to 32% in 2019. This will work as an advantage for the company because hotels are not present across every rural area and this is where Airbnb makes accommodation possible.
With a shift in work culture and online schooling, the company has noticed that people are staying for longer and are planning holidays that allow complete flexibility. In the first quarter, the long-term stay bookings were 24% as compared to 14% two years back. Since the company offers an entire property including a kitchen and workspace, it will be a preferred choice for travelers.
The Bottom Line on ABNB Stock
In short, Airbnb is one of the few travel companies that can benefit from the pandemic and the fundamentals of the company are proof of the same. Its unique business model has disrupted industries but the future looks even better.
In 2021 and a few years down the line, Airbnb could take a larger share of the market and replace hotels. No hotel can provide privacy, flexibility, and safety like Airbnb.
Airbnb is a great company to invest in. With strong fundamentals and a unique business model, it is ready to soar as travel reopens. Invest in ABNB stock before complete travel recovery to make the most of the growth.
On the date of publication, Vandita Jadeja did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
