And thank you for joining Airbnb's Earnings Conference Call for the Q1 of 2021. As a reminder, this conference call is being recorded and will be available for replay from the Investor Relations section of Airbnb's website following this call. I will now hand the call over to Ian Lee, Airbnb's Head of Investor Relations. Please go ahead.
Good afternoon, and welcome to Airbnb's Q1 of 2021 Earnings Call. Thank you for joining us today. On this call today, we have Airbnb's Co Founder and CEO, Brian Chesky And our Chief Financial Officer, Dave Stevenson. Earlier today, we issued a shareholder letter with our financial results and commentary for our Q1 of 2021. These items are also posted on the Investor Relations section of Airbnb's website.
During the call, we'll make brief opening remarks and then spend the remainder of the time on Q and A. Before I turn it over to Brian, I'd like to remind everyone that we'll be making forward looking statements on this call that involve a number of risks and uncertainties. Actual results may differ materially from those expressed or implied in the forward looking statements due to a variety of factors. These factors are described under forward looking statements in our shareholder letter and in our Form 10 ks filed with the SEC on February 26, 2021. We urge you to consider these factors and remind you that we Take no obligation to update the information contained on this call to reflect subsequent events or circumstances.
You should be aware that these statements and should be considered estimates only and are not a guarantee of future performance. Also during this call, we will discuss some non GAAP financial measures. We provided reconciliations to the most directly comparable GAAP financial measures in the shareholder letter posted to our Investor Relations website. These non GAAP measures are not intended to be a substitute for our GAAP results. And with that, I'll pass the call to Brian.
All right. Thank you very much, Ian, and thank you everyone for joining us today. I want to start by acknowledging the state of the pandemic. COVID-nineteen cases continue to surge in parts of the world such as India and our thoughts go out to our hosts, guests and employees in India during this difficult time. There is much more work to do to limit the spread of the pandemic and many people are still hurting.
And we know how lucky we are to be in the position we're in today. 2020 was a year that none of us will ever forget. It was also a year when travel fundamentally changed forever. Airbnb We sharpened our focus on our core business of hosting, and we got back to our roots, back to what is truly special about Airbnb, The everyday people who host their homes and offer experiences. And we emerged as a stronger and more efficient company.
Our business rebounded faster than anyone expected, and it showed that as the world changes, we are able to adapt. Now turning to our Q1 results. Our business dramatically improved with the rollout of vaccines and the easing of some travel restrictions. While conditions aren't yet normal, they are improving. People's desire to travel, combined with our tightly managed expenses, drove a return to our positive top line growth and materially improved adjusted EBITDA.
In Q1, our revenue Was $887,000,000 This was an increase of 5% year over year And it exceeded Q1 twenty nineteen levels as well. But here is the most important fact. Our business improved without the recovery of 2 of our strongest historical segments, urban travel and cross border travel. We expect the return of urban and cross border travel to be significant tailwind over the coming quarters. Now as our top line recovers, We are maintaining our focus and our financial discipline to improve our profitability.
Our adjusted EBITDA loss Was $59,000,000 This was approximately $190,000,000 better than the same period in 2019, And it was $275,000,000 better than a year ago on essentially the same revenue. Now these results show that we are improving our variable cost. We're being disciplined with our marketing and our fixed costs. Our strong performance also indicates the beginning of the travel rebound. Just a few hours ago, the Director of the Centers For Disease Control said, If you are fully vaccinated, You can start doing the things that you have stopped doing because of the pandemic.
What we think this means is that more people will be comfortable traveling, and it further strengthens our view that we are going to see a significant travel rebound. In fact, we expect this rebound to be unlike anything that we have ever seen before, And we expect travel to be very different than before. People are discovering that they don't have to be tethered to one location to live and work. And what this means is that people are more flexible about where and when they travel. People can now travel anytime.
People are also traveling everywhere. They're not just going to the same 20 or 30 cities. They're visiting smaller cities, towns and rural communities. And when people do travel, they're staying longer. 24% of our nice booked in Q1 We're first phase of 28 nights or longer.
People are not just traveling on Airbnb, They're now living on Airbnb, and these trends are not going away. The world is never going back to the way it was, And that means that travel is never going back to the way it was either. So let me tell you about what we're doing to prepare for what's ahead. Our single priority in 2021 is to prepare for the coming travel rebound. To do this, We're perfecting the end to end experience of our core service.
This includes educating the world about hosting, Recruiting more hosts, simplifying the guest experience and delivering a world class service. Now I'm going to briefly share how we're executing against in each of these areas. First, we are educating the world about what makes Airbnb different, hosting. In late February, We launched our 1st large scale marketing campaign in 5 years, made possible by host. We're educating guests about the benefits of being hosted And we're expiring more people to become hosts.
Now while it's still early, the campaign is being well received. In markets we're running the campaign, Overall traffic is up, 1st time bookers are up, traffic from prospective hosts is up and our brand favorability is up. 2nd, we are recruiting more hosts and we are setting them up for success. To build on the momentum of our marketing campaign, we launched an accompanying digital campaign that's focused on recruiting new hosts. And we've completely redesigned The end to end experience of being a host on Airbnb.
We're making it easier for anyone to start hosting. 3rd, we are simplifying every part in the guest experience. In February, We launched a flexible dates feature. It allows guests to browse options while being flexible on the exact dates of their trip. Now since the feature launched, there have been more than 90,000,000 flexible date searches on Airbnb, 90,000,000 searches since just February with flexible dates, And finally, whenever our guests or hosts need us, we must deliver world class service.
So to prepare for the travel rebound, we're improving our community support product, enhancing our safety protocols, and we're scaling our operations by ramping our 3rd party Now I want to wrap by highlighting a major announcement that we have coming up in less than 2 weeks. On May 24, we will announce the most comprehensive update to the Airbnb service in 12 years. As part of this special announcement, we're going to share insights on how We're going to unveil a simpler And more inspiring guest experience. And we are going to show you upgrades that make it even easier to be a host on Airbnb. So to watch the announcement, visit airbeam.com on Monday, May 24.
So to summarize, We're pleased with the strong Q1 results. We are encouraged by the trends that we're seeing driving these results, and we are executing against our 2021 plan Prepare for the travel rebound, and we think this travel rebound will be like unlike anything we've seen before. We think this is a travel rebound of the century. So Travel is coming back and Airbnb is ready. And with that, Dave and I look forward to answer your questions.
And your first question comes from Justin Post with Bank of America.
Great. Thanks so much for taking my question. I guess I really want to focus on behavior change, which could benefit the company, first host and also guests. I think in the letter, it Host listings were stable with Q4, but it seems like you're really encouraged by what you're seeing. So maybe you could dive in there and tell us What is encouraging about what you're seeing with Host and whether you see expect a lot of new listings to hit the market over the next year?
And then similarly on the guest side, how do you think this pandemic is going to increase willingness to use alternative accommodations? Are you seeing some
Thank you very much, Justin. So why don't I start and Dave feel free to add in after I go. So let's start with host and then we'll go to guest. So Justin, let's just start with we have 4,000,000 hosts on Airbnb. And I think if you ask people a year ago, would we have had Such a stable host community, they probably wouldn't have expected that.
But what we have today are hosts that offer 5,600,000 listings. And these 5,600,000 listings are about A million more than we had this time in 2019. And what we've actually seen is a large growth in non urban listings. So we actually have a 30% growth in non Now it's important to note that 90% of our hosts are everyday people, they're individuals. And the reason why is as we've made hosting on Airbnb easier, more and more hosts are coming to Airbnb as well.
Now specific to what we're doing, We launched our first global campaign in 5 years made possible by host.
As I said, we also
have an accompanying host campaign. Both of these campaigns, We are seeing significantly larger traffic of prospective hosts to the platform. The next thing we're doing is we're making it even easier to become a host by reducing the number of steps to become a host. And as you reduce the number of steps, conversion rate for hosts gets even easier. We now are allowing Host to be paired with other super hosts to help them get started and we have webinars as well.
And then finally, we have new tools and services that are going to make it even easier for hosts to list and be successful. I'll just end this first thing by saying On May 24, we will unveil a number of new tools and services I think that are going to make it much easier for hosts to get started. And I want to point out that new hosts that join Airbnb, 50% of them get a booking within 4 days of activation. And I think hosting is coming at the perfect time for many people in the world because Airbnb, we started actually after the Great Recession in 2,008. And at that time, There were many hosts, many people that were looking at Airbnb as a financial lifeline.
I think if you think about the number of hosts on Airbnb, the top occupations of our hosts Our healthcare workers, educators and people in food and hospitality, these are industries that have been hit really, really hard. So our job is to tell the story of The fact on Airbnb, you can make $8,000 United States on average if you have one listing, which is 5 times you can make an average American gotten a stimulus So these are some of the things we're getting going and we are just getting started ramping and I expect us to get millions of more hosts in the coming years on Airbnb. Now as far as trends for guests, Justin, I'll also cover this as well. As I said before, I think 2 things are true. Number 1, this is a travel rebound that is starting that is unlike anything we've ever seen before.
I think the Q1 results kind of demonstrate this. But the other thing that we're seeing is that travel is going to be very different than before. Probably the biggest changes are the following. Number 1, I don't think business travel is ever coming back the way it was before the pandemic. It's at least not going to look like it did.
I do think a new kind of business travel may emerge. Many employees are working remotely. They're going to need to go back to headquarters occasionally. You're See longer stays going in cities. And so we're seeing elevated bookings in urban markets for stays of longer than 28 days.
But the bigger trend It's going to be flexibility. I think that all of us working around the world, most of us, if we're privileged enough to say this, are more flexible than we were before the pandemic. Because of the world of Zoom means the world where we can work anywhere is a world where many people are also choosing to live anywhere. And this has created 3 travel trends. Number 1, People can travel anytime.
This is why in our we have a flexible days feature where instead of saying I want to travel from July 5th to July 10, You can say I want to go somewhere for a weekend, a week or a month, anytime this summer. We have over 90,000,000 people use this feature. And as more people use this feature, Conversion rate goes up. The second thing we're seeing is length of stay is increasing. In 2019, at this period of time, 14% of our nights were longer than 28 days.
Now, 24% of our nights are longer than 28 days. What that basically means A quarter of our business isn't travel. It's living. After 28 days, you're probably not traveling. And I think what this is a trend of Is that traveling and living are going to begin to blur together.
So this is the second trend we're seeing. And the third is People are now traveling everywhere. If you look at the concentration of our revenue, it is much more distributed than it was a couple of years ago. And this is because people aren't just going to the same 20 or 30 cities. They are getting in cars and they're traveling to small towns, rural communities, many of which don't even have So again, the big trend is flexibility.
People are traveling anytime, anywhere, they're staying longer. We think all these trends are here to stay. And I'll just end by giving one more thought. I think there is a mass shift from mass travel to meaningful travel because people miss traveling. In fact, in many surveys, people say the thing they miss the most that was taken away from the pandemic, at least from out of door activities, is travel.
They don't miss business travel. They don't miss standing in line in front of a museum or a selfie land marketing a selfie stick, getting a photo with a selfie stick. What they really miss It's spending time with the people they care about. And we call this meaningful travel. We, your friends and family, think Airbnb is really a great way to do that.
So those are the trends that we're seeing. The two trends I do think are going to inverse are we are going to see recovery of urban travel and the recovery of cross border. This has been our bread and butter before the pandemic,
And your next question comes from Mario Lu with Barclays.
Great. Thanks for taking the questions. The first one is on listings counts. So you said you have similar levels to last quarter around 5,600,000. But with this hosting campaign that you guys are running, is there like a timeline that we should expect to drive that number up?
Or You mentioned in the past that a quarter of guests eventually become hosts. When should we expect that number to increase? Yes. Dave, why don't I give you this question and it's a great question, Mario. And I'll also say that in Q1, 28% of our hosts We're now prior guests as well.
So that number is increasing. But Dave, I'll hand it over to you.
Yes. To be clear on the stat, it's that of guests, 25 24% were former new hosts were former guests. So just to be clear with the percentage. It's early. We're seeing strong listing count, 5,600,000.
It's been very stable. I think actually one of the things that's been really impressive during this time Is that our host churn in Q1 2021 is actually lower than our host churn in the same period in 2019. And actually our churn in 2020 was even lower than what Was in 2019. So I just think it all just shows kind of the resiliency and the stability of our supply. And we're just optimistic that as Things continue to rebound as we continue to educate people about the benefits of hosting and all of the tailwinds that Brian just outlined.
We'll continue to see a strong host growth going forward.
Great. And just one follow-up on domestic versus international. So I'm not sure if you can see this in your data yet, but just curious to hear if you've seen some substitution in terms of domestic bookings versus international as the vaccine rates increase. And do you think the domestic rates will remain above 2019 levels even after Quarter is open up. Thanks.
Yes, Dave, do you
want to take this one as well?
Yes, I mean, it's unclear exactly where everything will settle out for domestic versus international. Clearly, right now, 80 And our nights in Q1 were domestic. So we've seen domestic travel being consistent, the strength all around the world. Historically, our strength has obviously been in urban areas across border. So prior to kind of the pandemic, I think about 50% of our nights were actually Cross border nights.
And obviously, with that not occurring, clearly, there's going to be some substitution where people are going to stay domestically where they might have taken a cross border trip. Again, our urban cross borders and our strength, we know that many of these trips will be are incremental and such that When travel rebounds to more typical state, we'll have growth in overall travel just due to the hesitancy, right? People are hesitant to travel right now if they Aren't vaccinated or maybe even can't travel due to some of the lockdowns on borders. So we know that many of the trips will Coming back and will be incremental to what we're seeing today.
Great.
Thank you.
And your next question comes from Colin Sebastian with Baird.
Thanks. Good afternoon. I have a couple of questions on investments and I guess, first off, what gives you the confidence that you can moderate sales and marketing spend in the second half without impacting Bookings or listing levels, is that still the plan? And then in terms of product development, obviously, Brian will be making some announcements soon. But how are you thinking about the pace of R and D or product development spend now that business appears to be returning to normal or whatever normal means now?
Is it perhaps Time to look at reaccelerating hiring or what are your thoughts on that? Thank you.
Yes. Thank you very much, Colin. Dave, why don't I take this at a high level and You can obviously go into more detailed analysis. So, Colin, a couple of things. Let me just first start And talk about our marketing strategy and then I'll answer your very specific question about H2 Marketing.
First of all, we take a very different approach to sales and marketing, I think, than our competition. What we have is a full funnel integrated approach to marketing and what we integrate is PR, brand marketing and performance marketing. And really PR, in addition to word-of-mouth, is a thing that really built our brand over the last 10 years. And because of that, Airbnb is a noun and a verb used all over the world, and this has led to 90% of our traffic being unpaid or direct even as recently as Q1. And even in this past quarter, with elevated marketing, we have similar traffic levels in 2019, but we spent 50% less On marketing.
So we think that if you have a product that is unique and different, that the role of marketing isn't to buy customers And the role of marketing is not sizzle. The role of marketing is education. And so what we have done is we're doing our first brand we did our first brand marketing campaign at a global level in 5 years. It was a campaign called Made Possible by Hosts and it's really just taking real photos from real guests on real trips to highlight what makes Airbnb different, which is host. We want our host to be as mainstream as the homes and spaces on Airbnb.
Now, while the results are still early, as we said, we have seen elevated traffic levels. And to answer your question on H1 versus H2, we decided to frontload spending. We were prepared for a travel rebound unlike any other, so we didn't want to spread the money over the course of the year. So we disproportionately put the Spending in H1 to really capture as much of this demand as possible. And I think what we're seeing is that timing is going to bear out to be the right timing.
And then as far as, when I also answer product development at a high level and then Dave, you can also go in. So at a high level for product development, Here's what we've learned. Before the pandemic, we were a divisional structure. We had our core business of homes. We also had a business travel.
We had we were working on a number of other divisions. We had many divisions. And because we had many divisions, we had multiple product development groups. And what we did is when we became a functional organization and we got much more focused on hosting, we realized that we could be much, much more efficient. It's one of the reasons our product development group is much smaller than it was 2 years ago.
And that's allowed us to move really, really fast. And I hope that you see on May 24, Even despite the team being smaller and more nimble, we've been able to increase the pace of development. I think people are going to be really impressed by what we're able to deliver. So that's at a high level. But Dave, I don't know if you want to jump in and talk more specifically about some numbers.
Yes. I mean, our product development spend will increase at a lower rate than revenue. We're Going to have to add back significant number of fixed resources in order to accommodate the business that's back to the size of 2019 and beyond. So we're just going to be very disciplined And then as Brian said, we're just seeing great success with our marketing strategy, which we actually started modifying prior to COVID, Solidified during COVID and are continuing to see strength here in Q1. So marketing as a percentage of revenue will be higher in early this 1st half of the year, that will be in the second half of the year, but we're very encouraged by the results.
Great. Thank you.
And your next question comes from Naved Khan with Stifel Securities.
Yes. Thanks a lot. Brian, maybe give us your thoughts about the reopening of urban travel. In terms Timing, how are you thinking about it?
Is that something that you think might tap into the back half
of this year? Or you think that's further out? Yes.
Thank you very much, Naveed, for the question. Well, let me preface my answer with 2 comments. Number 1, I'll be I'll try to be careful with predictions because anyone that was making predictions last year were crumbled. The third thing I'll say is no matter what I think one of the things we showed last year is that our model is inherently adaptable. And so we are adaptable to any travel changes.
But that being said, I do think we have quite a bit of data. And so with the data we have and we're seeing, I think I can give you some indications, although it's going to be a little hard to We are seeing that as restrictions lift and cross border begins, more people travel to cities. We're also seeing That the nature of travel to cities is changing. For example, more and more people are booking longer term So the length of stay is going up. And one of the things we know is that the longer you stay somewhere, the more you're inclined to stay in a home.
So I think that as Restrictions lift in countries. As vaccinations rise, we think this is a significant tailwind to both urban travel and cross border travel. So we're very, very bullish. It's a little hard to pinpoint, but I think the comments from the Head of CDC today, The lifting of restrictions across Europe, these are all really, really good signs. There's no reason this wouldn't be a huge tailwind to urban travel and cross border.
Yes. Our urban travel growth rate has increased every month this year and continues to do so through April early May. So We're just seeing continued positive momentum.
Thanks. That's very helpful. And maybe a quick Follow-up, if I may. So Brian, you talked about business travel maybe becoming a little different, where people might just Travel to headquarters and maybe
rent. Yes, maybe on Airbnb. Is there a do you
see a good opportunity to maybe take share This segment versus previously, just targeting business travelers going into cities.
Yes. I mean, In New York City, in Los Angeles, a number of these cities, we almost have as many nights booked for stays longer than 28 days As we do stays under 28 days. In New York City, actually, the majority is over 28 days now. So I think that there's a huge opportunity. If you think about where business travel In the future, it seems completely intuitive to me that as companies offer more flexibility, more people are going to live around the world, but they're not to live remote.
They're going to have to come back to visit. And so I think you're going to start to see longer stays. I think in addition to longer stays, you may also see Traveler and business travelers traveling together. So let's say, 3 different employees work in 3 different cities and they have to come back to headquarters. They may not all get 3 different hotel rooms at Airbnbs.
They might get 1 house. They can split the costs. They can eat around the dinner the breakfast table in the morning. So I think the things that benefit Air Media Business Travel is group travel and longer stay travel. Those two things I think are disproportionately Beneficial to do in home and these are general tailwinds for business travel.
Now I want to be clear, I mean, people will, of course, travel for business again. I just think the bar
And your next question comes from James Lee with Mizuho.
Great. Thanks for taking my question here. A couple of questions regarding the supply side. And can you guys talk about maybe in supply and demand balance By reaching a little bit here, where do you see surpluses? Where do you see deficits?
And are you also looking to increase your supply by tapping into professional host, I know 90% are individual or even hotel supply. And also secondly, and what is What are the key frictions that you're seeing right now for your host signing up and that you're looking to address with these new tools you're about to introduce? Thanks.
Yes. Dave, do you want to take supply and demand? I can probably take the increase in ProHose and key friction.
Sounds good. Yes, I mean, on supply and demand, really what we're seeing because cross border and urban travel has not Fully rebounded with places that we're seeing in the surpluses or deficits in demand where a surplus of supply would be more urban markets And where we can see some tightening of it, especially U. S. Non urban for the peak of the summer is clearly going to be Some of the most constrained of our markets. So we're actively working against each of those areas, both on each side.
On the Supply side, making sure that we are doing our best to recruit hosts and bring on as much supply as possible for peak periods and constrained markets. And then we're also using go back to our marketing expenses before where we use search engine marketing is in targeted approach, Especially in markets where we have maybe surplus supply and not maybe enough demand. And so being kind of pointed at that. So we look at Every individual market is different and we will use different levers to try to manage that balance over time.
Yes. And James, why don't I jump in and say this. One of the things that Dave just said, I want to put an underline under highlight. Before the pandemic, most people came to Airbnb and they knew exactly where they were going and they knew when they were going. So we asked a question in the search bar, where are you going?
And we ask, when are you going? You put in dates. The Holy Grail for matching supply and demand is to be able to also control where you can point demand. But we can't point demand to where we have supply if guests aren't flexible, if they're predisposed to where they want to travel. Now that guests are telling us that they're much more flexible about where they travel, We can point demand to where we have supply.
This is probably one of the most important things we have and it explains why when 90,000,000 searches were used with The base feature conversion rate went up. So that is just another thing I want to underline. Now regarding your next two questions, let's talk about Provost and Hotel. Obviously, Airbnb created a new category in travel because we created tools that allowed everyday people And yes, out of 4,000,000 hosts, 3,500,000 are individuals. That being said, we welcome All hospitality providers on Airbnb and we have hundreds of thousands of professional hosts and professional hospitality providers.
The way we think about it is when a guest comes to Airbnb, they're looking for a place to stay. And so we don't want them to leave without having found something they want. Typically, they come to look for individual host that's what we're known for, but we want to make sure that we have professional hosts and hotels to serve those customers and to fill in our network gaps. So we're continuing to develop new tools and services over the coming years to continue to welcome these providers onto our platform. And I think they're going to obviously Benefit from all the demand that we have.
Now as far as key friction to becoming a host, One of the things we've seen, probably the main learning we've had is as you make it easier, more people do it. That's the name of the game, make it easier and more people do it. Before Airbnb, it was really hard to rent your home on the Internet. People did it, which is hard and we made it easier. And on May 24, we're going to show a number of tools, A number of offerings and innovations that we have that are going to make hosting even easier.
We're reducing number of steps to become host. We're making it even By providing more tools and support and we're going to offer some better tools and services for hosts once they become hosts. And so I think all these things We'll reduce the number of frictions as well.
If I can answer follow-up questions, also on the whole size 2, are you seeing increased competition for acquiring Host and maybe potentially pressure on your takeaway? Thanks.
Dave, do you want to take the time?
Sure. Right now, what we're seeing is remember, kind of step back to what our hosts are. We have 4,000,000 hosts around the world. The vast majority of those are individual ops. So 3,500,000 of those are individual ops.
And I think that's very different than what We see kind of competitive platforms are doing. And so what we end up seeing with the 4,000,000 hosts that we have Give me the last part of the question. Sorry, I lost my train of thought.
Yes. Increased competition for those and maybe potentially pressure on take rates?
Yes. No, the Of course, on the take rate. Right now, we're not seeing the pressure on take rate. We think that we have a really great value to the take rate that we give. We Charge rates that give good value to both our guests and our hosts.
And what we see on the tick rate side is making sure that when we give value back to Our hosts, but then we are able to take kind of appropriate revenue from that. So we're not really seeing any pressure at that driving for Increasing or decreasing the number of hosts that we have on Airbnb.
Okay. Thank you.
As a reminder, please ask only one question, so that we can accommodate as many analysts as possible. And your next question comes from Brian Nowak with Morgan Stanley.
Thanks for taking my questions. I have 2. The first one on the is on the 2020 new users that you added. It was a great year to sort of add a lot of new users to I'm curious to hear about what you're seeing from those new users from a retention or booking perspective now as you're into 20 21 and how that compares to what you've seen in the user cohorts in the past? And the second one, to go a little bit more into the monetization of the take rate, Can you talk to us about any of the tests or experiments you've been doing around insurance or ancillary service sales or tiered take rates or sponsored listings and
Yes. Thank you very much, Brian, Dave, why don't I take the second question monetization rate, but why don't you take the question on new users? What are we seeing from new users from retention to booking?
Yes. So what we're seeing for new users, it's early, but all the early data for the new users that we've acquired here during 2020 Is that the retention is very consistent with what we had for users in 2019 and before. So I think one of the benefits that we've seen in 2020 is We actually did lower the barrier for entry for new guests to kind of come to Airbnb and try us out for the first time. You don't have to hop on a plane. You You don't have to go across the border.
As we said, over 50% of our nights historically have been cross border. You don't have to do that to try Airbnb. Now you can kind of drive just a couple of hours down the road and go check us out. And what we're seeing from the early results is that the retention rates are very consistent with what we've seen in the past.
And then on, Brian, to your question about monetization and take rate, we absolutely see lots of opportunities to increase our monetization and Take rate for both guests and hosts. For example, one of the things we've said is that many of the tools and services we've offered in the last 5 years, The incremental, we haven't charged for. For example, unlike our competitors, we offer free protection of $1,000,000 against theft, property damage and personal liability in countries all over the world. And as we added these services, we do not charge incrementally for these. Our general principles, we always want to give away more value than we're taking, But we do think there's opportunities for us to do to offer some more tools and services to increase Take Rate.
Now that being said, Focus is critical and we are focused on the most perishable opportunity. The most perishable opportunity right now is to capture as much travel demand as And be ready before anyone else is for this travel rebound. So we are making sure that we have enough hosts for this travel season. We simplified the gas experience and we're providing world class support. So that's where we're focused on this year.
But make no mistake, we have many opportunities in the years ahead.
Great. Thank you both.
And your next question comes from Mark Mahaney with ISI.
Okay. I'll stick with one question. Just on the supply side, will you address the issue of whether increasing local restrictions is a factor that's limiting your supply, especially in some of the larger I realize that travel hasn't really recovered there fully, but just address the issue whether how much of a constraint new local regulations On rentals, etcetera, is on your ability to expand supply. Thanks a lot. Yes, I can take this at a high level.
Dave, you can feel free to jump in as well. Mark, thanks for the question. What we saw with COVID was actually a positive reset and our relationship with cities all over the world. Now first, let me just start by saying we now collect and remit taxes in 30,000 jurisdictions. We've quite extended to date $2,600,000,000 of transient occupancy taxes.
What happened with COVID is 2 things. Number 1, Travel went from being concentrated in very few top cities to distributing everywhere, 1,000 cities around the world. Though we do see an urban We don't see that trend completely reversing because I think in a sense you
could say the genes out of
the bottle. Another of people have realized that there's all these really cool small towns, rural And small cities, many of which don't even have hotels. And so they're really important destinations. The other thing that we've noticed though is that a lot of Cities have been hit really hard by the devastating economic effects of the pandemic. So you will see major cities have had major tourism shortfalls, Major tax shortfalls.
And because of this, what we've actually seen is a lot of cities reaching out to us. In fact, we struck over 100 partnerships over the course of The pandemic with destination marketing organizations, which as you know are basically tourism bureaus and tourism arms. From Scotland to Portland, we've been doing partnerships With cities all over the world and to scale our partnerships to thousands of cities, we launched last year the Citi portal as well. So this is what we're saying. I don't think you want to add anything to that.
I think that's key. We also have added this new capability last year, The city portal, which is another tool to enable cities to understand what goes on with our business in each of their communities. And I think that's been another positive tool for cities to feel like they can work with Airbnb to help their economies rebound.
Okay. Thanks, Brian. Thanks, David. Thanks, Mark.
And your next question comes from Jed Kelly with Oppenheimer.
Hey, great. Thanks for taking my questions. I guess, Brian, going back to business travel,
I guess it's kind of like
a 2 part question. I guess number 1 would be, where are you in terms of talking to companies, talking to businesses, sort of Making the ability to work from anywhere through Airbnb a benefit. And then as like a follow-up, you mentioned work from anywhere. You are your company is, of course, based in San Cisco, so how
do you see basically potentially using the work from anywhere trends
to sort of save cost to make your business more efficient If you can have more employees working outside the Bay Area. Thank you.
Yes, these are 2 really good questions. Let me start with the first one. So as you point out and as I said, one of the trends that has been Pretty remarkable over the last year is as more people have more flexibility, they can work from home and that means they can work from any home, Often on Airbnb. And so one of the things we're doing is we're continually trying to make it even easier for guests to be able to search Anywhere around the world. And on May 24th, we're going to show you some new tools and new ways to make the experience of searching on Airbnb, Actually allowing you to search with more flexibility even easier.
Again, the type of flexibility we're looking at is people staying longer, booking any time and be able to go anywhere, not just to the same stock top destination. So we are going to continue to look at innovation in this area. And I think the other thing I'll just point out is, again, in 2019, only 14% of our nights booked were longer than 28 days. That's now 24%. And so we think this is a huge growth area for us.
We think basically a quarter of our business is not even travel anymore. There is a lot of innovation opportunities for us. We're a design led Company at our heart, and I think they're going to offer a lot of really interesting opportunities. Now specific to our San Francisco employee base, Let me talk a little bit about what I told our employees a couple of weeks ago. I told them there's 2 guiding principles.
Number 1, we want to model the Live Anywhere lifestyle. So by modeling Live Our Anywhere lifestyle, we're going to allow more flexibility for our employees. So I told our employees, they don't Have to come back to the office until next September. We're going to allow a lot of flexibility. And even when we do ask people to come back, they're going to have a lot more flexibility before.
People aren't going to be expecting to come back to 5 days a week, every week. We think that is really not how most workplaces in 21st Century are going to operate. That being said, as As a creativity led company, we also do think that in person collaboration is important. So we want to find some balance between modeling the Live Anywhere lifestyle And allowing for in person creative collaboration, and that's what we're designing. We want to get it right.
We don't want to rush into this. So that's where we're going to be working on over the course of next year.
Thank you.
And your next question comes from Justin Patterson with KeyBanc.
Great. Thank you
very much.
Ryan, just extending
on the prior question, it does sound like this It's really designed around inspiration and discovery. Without spoiling your announcement on the 24th, I'm curious about how you think The opportunity to broaden the funnel on Airbnb, provide inspiration for travelers as they think about places they And things to do such that Airbnb really starts to drive that initial Thank you, Jeff. It was a little bit Inspiring where you can go and what you can do, correct? I just want to make sure I didn't I couldn't hear the end of that last question. Okay.
I'll answer that. So, yes, so inspiration is something that we're really focused on. Actually, if you go to airfinity.com right now, If you type in airbnb.com, you're going to notice on our top of our homepage, there's a big piece of art and it says the greatest outdoors. So we just launched wish lists that are Curated by Airbnb. And if you click on get inspired, you're going to see a number of wish lists.
So this is just the beginning of a number of things we're doing To try to inspire more travel. On the homepage below that, you're going to see that we're now merchandising places you can go nearby. So So between Wishlist, Nearby Travel and then some of the updates we have on May 24th, I think that's going to continue to drive more and more inspiration. On May 24, though, we are going to showcase some new exciting features that I think are going to inspire people around flexibility. Because one of the things we've seen If you are more flexible about where you travel and when you travel, then what that kind of means for some people is the home becomes the destination.
Suddenly, where you go is less important than the type of home you stay in. And so, we're this is how we're thinking about it. And hopefully, if you can tune in, we can show you some of the things we're working on.
And your next question comes from Voigt Wamsley with Deutsche Bank.
Thanks. Two questions if I can. First,
can you talk about how you think about occupancy rates or Kind of
room nights per active listing over the medium term. It seems like it's been pretty stable over the past few years, but wondering if this notion of like blending of Travel and living is kind of increasing shoulder season demand in a way where you can grow room nights in excess of Listings are getting more out of your existing listings. And then the second one, the average booking value Night looked really high in 1Q. If you peel back the onion and look within the same region, the same property Are you seeing pricing up or is most of this just mix shift? And how do you think about this as maybe as travel normalizes a bit?
How would that impact ADRs going forward?
Great, Lloyd. So I'll take the first question on occupancy rates. Dave, you can take the second one. The answer to your question is yes. Occupancy rates, we think average on a global level will go up As we get better at matching supply and demand.
The basic name of the game is in classic travel, a lot of people Try to go to the same place on the same date. That's why kind of when you show up to Paris in the summer and there's a whole bunch of people In line at a landmark, it's because we're all going to the same place at the same time. So to increase occupancy rates, there's 1 of 2 things we can do. We can add more hosts To the same places that everyone's going to or we can point demand to other places. And as length of stay increases, as People shift from going to 20 or 30 cities to thousands of communities.
And as people become more flexible when they travel, we can then show them deals. We could show them, for example, I know you want to go to we'll make up the place France in July, but if you went in September, You could save a lot of money because there's fewer people there. Or if you can point you instead of in Paris, we can point you to Britney or some other community. So there's a lot of opportunities for us, I think, to point demand to where we have available supply, which will allow us to steadily increase occupancy. So what it means is we don't need to increase supply linearly with increasing revenue.
We can get more productivity out of supply that we have. And Dave, I don't know if you want to take ADR.
Yes. And our ADRs in Q1 were up 35% year over year. That was after being up 13% year over year in Q4. The significant majority The EBITDA increase is driven by mix. The rebound has been earlier in the U.
S, which has a higher average daily rate. It's been in non urban, whole home and even larger homes and each one of those is just on average a higher ADR. So The majority of the ADR that we're seeing is from mix. When we actually look at some highly constrained markets In a highly constrained time period, we're seeing some pricing pressure within there that will drive the AR rates up, but the vast majority of it is just driven by mix.
And the other thing
I want
to say again is, yes, another thing I would just say is, as demand increases on Airbnb, That can also correspondingly increase supply. So again, one
of the things
we published in our S-one was 23% of our new available hosts in 2019 were guests.
That increase of
28% in our new available host that started out as guest interviewing me in 2020. So we also think there's a really interesting flywheel where we can point demand where we have supply. We have a muscle to continue to add hosts, but we can also convert Guest 2 hosts. And as that number keeps increasing, that's another big lever for us.
Got it. Thank you.
And your next question comes from Brent Thill with Jefferies.
Dave, I don't know any color you can add around the final unlock that comes over
the next week of close to 500,000,000 shares. I know not All those are eligible, but is there any way you could just frame that there's been sincere of this unlock and what it means? Can you just any color on that
you could give would be helpful?
Yes, David, do you want to take that? Sure.
So we clearly our unlock comes on Monday. And there's and the key thing that we're doing to try to make sure that we're ready for the unlock is to do what we've been doing, which is deliver outstanding results, deliver outsized kind of Gross booking value, revenue and driving for profitability. So there's not a lot more color I can give you on the unlock on Monday beyond that.
Okay. Thank you.
And your next question comes from Brian Fitzgerald with Wells Fargo.
Thank you, guys. We wanted to ask If you could tell us what you're seeing with respect to experiences, supply dynamics there, online versus offline, Linkages to travel, conversion rates there and anything with experiences.
Yes. Thank you very much for the So here's what I'd say about experiences. When we came back in the beginning of 2020, I really thought Experiences would be a breakout year and last year. It turns out a pandemic was a very difficult year for Experiences. We had the product on the hold.
We remain very, very bullish about experience over the long term. One of the reasons we remain bullish is because the percent of guests that leave a 5 star review with experiences Is higher and remains higher than percent of guests to leave a 5 star review for home. But the pandemic was a difficult time for experiences, so we launched online experiences, which And I am thinking that in the coming years, experiences will be successful because there's fewer Alternative, there's fewer mass tour operators, bars, lounges and restaurants are going to be operating at full capacity. So we do think there's a window, but we're playing the long game on this one.
Thanks, Brian.
And your next question comes from Stephen Ju with Credit Suisse.
Okay. Thanks. So Brian, I asked the same question to one of your competitors last week. So I'd be interested in your opinion on What is probably more of a macro consideration? So, the consumer savings rate, at least the United States, is Probably at the highest level it's been since World War II.
And it will take some time for all of this to wind down to, I guess, normalized levels, which Brings up the scenario of consumer spend probably accelerating for the next several years. And hopefully, one of the likely destinations for all of these dollars It's going to be in travel. So I know it's early days of the recovery, but what are you seeing in terms of, I guess, greater willingness
to maybe, say, upgrade to
the more expensive Airbnb or Great to the more expensive Airbnb or just in general stepping up in the frequency as we recover here?
Thanks. Very good question, Steven. Let me tell you what we're seeing so far. One of the things is we did travel surveys in the beginning of the year, And we surveyed people in the United States. We also surveyed people around the world.
And in our surveys, what we found is that the out of home activity People miss the most more than restaurants, more than bars, more than sporting events, more than concerts, was travel. The kind of travel people missed was not business travel. It was not mass travel going to crowded destinations. It was really just spending time with people that they've not been able to see during the pandemic. I think that we generally just yearn for what was taken away from us and travel and spending time with people is something that was taken away from us.
Now With regards to your question about RBC people upgrading, we have seen, as we mentioned, a material increase And the average daily rate in the United States. And this does give us a sense of consumer willingness to spend. Maybe another way of saying it is maybe before the pandemic, People were booking studio apartments in cities. Now we're seeing a pretty big expansion of people booking entire homes, typically even more bedrooms. The number of guests per reservation is increased considerably.
And so correspondingly, people are spending more money. I think That trend, of course, will get normalized over some period of time when other geographies recover and urban recovers. But I do think that we are going to see
And your next question comes from Deepak Mathivan with Wolfe Research.
Hey, guys. Thanks for taking the Just a couple of quick ones. So first, can you talk about the implications of booking window trends on our second quarter and second half? It feels like there is a lot of summer bookings happening right now already in markets like Europe and even in North America. Is that earlier than usual or does that mean that the recovery is being pulled forward by some capacity?
Just wondering if you can provide some insights on that. And then second question, not sure if this was asked already. How are you thinking about the ROI on the targeted digital marketing programs aimed at hosts? Avi, on performance channels, any color that you can add there would
be great. Yes, Dave, why don't you take these two questions?
Sure. So regarding the booking window, we're seeing the booking window, obviously, in 2020 shrank dramatically, right? People were hesitant to travel. They only started booking when they had high confidence that they were going to travel. What we've seen here early in Q1 of 2021 is the booking windows have expanded.
And in March, We actually saw booking windows consistent with those from March of 2019. So the windows are expanding. I think that what you're seeing is still even more Confidence in the U. S. So that the willingness of travel and the booking window in U.
S. Has expanded further than it has in Europe. We're starting to see some greater acceleration of our European business. We're seeing European nights increasing the rate of year over year growth every month of the year since the beginning of the year, including through April May. And we're seeing that as things like the lockdowns in France are removed and after the UK Prime Minister announced plans to exit lockdown in February.
We started seeing more acceleration in Europe. So the booking window trends Are positive and give us encouragement for what we're going to see in the back half of the year, but we'll just have to see what the lockdowns and And then regarding the ROI and targeted digital marketing This is one of the levers that we have. When we do targeted digital marketing for Hosts, it would be in specific areas that we know are more supply constrained and where we want to focus on it. We establish a return on that investment for the value of the host that we acquire through that channel. And it is one channel, but it's not the only one, it's not the primary one.
Again, the most important thing is to kind of step back And educate people about the benefits of hosting and then make it easier for them to host once they start considering it.
Got it. Okay. Thanks, Dave.
And your next question comes from Kevin Kopelman with Cowen.
Great, thanks. Just a quick one. Could you give us an update on cancellation rate trends this year Compared to 2019 with, with I think the average listing being a little
bit more flexible than it was in the past. Thanks.
You're welcome. Dave, you want to take this one for Kevin?
Sure. So the cancellation rates, obviously were substantially elevated in 2020 versus 2019. They've begun to moderate, so that they are substantially below where they were at in 2020, but they're still moderately elevated versus the 2019 rates. So We're seeing a bit more return to normal, but it's not quite historical normal rates.
Perfect. Thanks, Dave. Thanks, Brian.
Thank you.
And your next question comes from Tom White with D. A. Davidson.
Great. Thanks for taking my question.
Just one for me. A follow-up on ADRs and specifically your expectations for the second half. I know there's some color in the letter, but Can you maybe unpack your thoughts on kind of all the different moving pieces there between the recovery and some of the kind of structurally lower ADR markets, Recovery in Urban and Cross Border, just curious to
hear your thoughts on how
it all kind of nets out you think in the back half?
Thanks, Tom. Dave, I'll give you this one. Sure.
Yes. I think that the best thing to do is actually kind of look at some of the guidance Figures that we gave in the earnings call itself, where we're basically expecting because it's harder to have visibility in the We're highly confident in the rebound that it's going to be coming. All the early indications are that it's there, but I think it's hard to Precisely pinned down what Q3 and Q4 are going to do. So what we did do is give some perspective on what we expect out of Q2 And that is that our gross booking value in Q2 of this year will be higher than in Q2 of 2019 and that our revenue Late in Q2 will be similar to that of 2019 and that our EBITDA will be our adjusted EBITDA will be breakeven to slightly positive in Q2 of this year. So I think those are kind of the key things, because as you said, as rebound comes back, the pace at which it comes back And the geographies that come back will all affect the mix of those ADRs.
And we do expect the ADRs to moderate, but it's hard to perfectly pinpoint and the specifics of that mix.
Okay. Thanks, guys.
I will now turn the call back over to the management team for closing remarks.
All right. Well, thank you everyone for joining us today. I just wanted to recap. We are really proud of our strong Q1 results. We believe they're a testament to our focus and the adaptability of our model.
And we've shown over the past year that as the world changes Airbnb can adapt. I think we're now well positioned for the travel rebound ahead.