Airbnb expects moderating demand amid supply growth

Airbnb (ABNB) shares move lower in Wednesday's pre-market trading after indicating moderation in demand in its mixed fourth-quarter earnings results. Yahoo Finance Live discusses the lodging service's most important figures, including bookings and active listings for the quarter.

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Editor's note: This article was written by Luke Carberry Mogan.

Video transcript

BRAD SMITH: Airbnb shares slipping in pre-market trading after reporting mixed fourth quarter results, and suggesting there could be some moderation in the number of nights and experiences booked.

Let's get to our top takeaways from the report here. As we're taking a look at shares pre-market, they are down by about 3.7%. I think, for me, one of the huge things that jumped out was, ultimately, on the side of the ADR, this average daily rate-- one of the things that Akiko, who is going to be covering this as well during the 11 AM hour, I believe-- one of the huge things that jumped out to both of us, as we were slacking yesterday was just about where this continues to moderate.

And so if this stalls, is that more indication of us to the amount of supply that's entered into this market for Airbnb listings in more urban, more city centers that had actually brought down a lot of that average daily rate? Or does this mean that now you have more of the non-urban, or suburban, or even of countryside, and rent and stay here, and you get your golf cart or something like that type of places that bring up that average? And are we going to see more of those continue to list as well?

So that's one thing that it's really going to be interesting to track from this point forward. But that was one area that investors were keeping tabs on, and some of the slippage that we had seen late last year as well.

RACHELLE AKUFFO: It's true because they did talk about that need of having the right product in the right place at the right time for big events and things like that. And, obviously, there was a lot of backlash, when people complained about the fees, especially, the cleaning fees. Talked about walking back a lot of that and seeing a lot more inventory coming to the market.

And so with that in mind, the thing I'm focusing on is Q4 supply growth growing 18% year-over-year. We saw in the earnings call, they called that a real highlight adding nearly 1.2 million active listings over the last year.

And it was that thing, again, about timing. They saw the highest growth in regions with the highest demand. And they also talked about the majority of these new listings being exclusive to Airbnb. And I know there's been a lot of pushback about people having perhaps second houses using them as Airbnbs, what that's doing for house prices, and really constraining the supply of, perhaps, first time home buyers.

But, at least, for now, Airbnb is seeming to have that network effect. And it's really feeding into itself.

BRAD SMITH: Indeed. We're going to continue to track shares of ABNB, as we get closer to the start of today's trading activity.