Airbnb is another one of my portfolio companies. I will break down my investment thesis on them as to why they are one of my portfolio companies and what I like or dislike about the company.
EBITDA margins are inflated currently due to (1) elevated ADRs from temporary mix shift and (2) elevated take rates due to temporary booking window dynamics. 3Q is also the seasonal high for margins. The 50%+ you continued to mention is a bit misleading, and BKNG is actually far more profitable. LT margin targets are 30%+.
I don't think the mix shift is temporary (partly maybe), as the work from anywhere trend will be something that will stay, and because of it, the mix won't go back to pre-pandemic levels. Airbnb IMO can also sustain a 50% EBITDA margin as they spend a lot of marketing on brand awareness right now, while 90% of the traffic is unpaid. If they lower the marketing brand awareness spend or it becomes a lower % of revenue (which it will in time), the profitability will be much higher. BKNG can't do that as it has to spend a lot to drive traffic to the site, so they have to keep marketing spending high to keep the revenue.
EBITDA margins are inflated currently due to (1) elevated ADRs from temporary mix shift and (2) elevated take rates due to temporary booking window dynamics. 3Q is also the seasonal high for margins. The 50%+ you continued to mention is a bit misleading, and BKNG is actually far more profitable. LT margin targets are 30%+.
I don't think the mix shift is temporary (partly maybe), as the work from anywhere trend will be something that will stay, and because of it, the mix won't go back to pre-pandemic levels. Airbnb IMO can also sustain a 50% EBITDA margin as they spend a lot of marketing on brand awareness right now, while 90% of the traffic is unpaid. If they lower the marketing brand awareness spend or it becomes a lower % of revenue (which it will in time), the profitability will be much higher. BKNG can't do that as it has to spend a lot to drive traffic to the site, so they have to keep marketing spending high to keep the revenue.